If your business is in a launch, expansion, or transformation mode, you are no doubt considering and anticipating the role of a capital raising firm in the process of seeking funding. Offering seamless support, research, financial forecasting and a wide host of additional services, capital raising firms are a strong, temporary extension for businesses in transition. How will your business choose the best capital raising firm for its position and needs? In this article, we will provide answers and information that will assist in your decision-making process.
Let’s get started with Choosing the Right Capital Raising Firm For Your Business ;
1. Why does our business need a capital raising firm in the first place? Can’t our business prepare and present to venture capitalists without a capital raising firm or investment bank?
There are several answers to this question, the first one being a simple “Yes, your business may choose to handle the process in-house.” However, beyond the simple answer, this is a good time to examine the reasons why a capital raising firm is invaluable in the process of raising funds:
First, the process of preparation for the presentation to venture capitalists may take weeks or even months. If the owner of the business has the full-time ability and energy to devote to the process, this can be completed internally. In almost all cases, however, the reason behind capital raising drives the need for a capital raising : The business is in a very fluid state of change and, as a result, the daily attention of the owner is not only necessary, but vital to the ongoing success of the business. A capital raising firm that takes on the complete project frees the owner or stakeholders to attend to the present needs of the business.
Second, a capital raising firm, typically an investment bank, has access to the best potential venture capitalist investors for your type of business. If your business does not have such contacts, the price of the advisory services is worth every penny right here: a capital raising firm can get the right investors into the right presentation for your business, thereby exponentially increasing your chances of acquiring much-needed funds.
Third, your consultant in the capital raising firm will unearth every value your business holds and will forecast the financial future, as well. The capital raising firm will devise numerous scenarios for venture capitalists to profitably recapture investments. Such capabilities may not be held within your business.
For these three reasons alone, a capital raising is considered a vital part of the process and presentation to venture capitalists.
2. What is the complete role of a capital raising firm?
Starting with the basics, the role of a raising firm, most often an investment bank, is to act as a support and advisory counsel for the business undergoing the equity or debt insurance process. This role is not an easy or a brief one; the capital raising firm assigns one or more consultants to examine every aspect of your business to extract the full amount of value and future potential value within.
3. How does a capital raising firm assist in the process of raising funds?
A capital raising firm will act on behalf of the business by completing a full complement of tasks related to fundraising. This will include research, material preparation, document assessment, and a variety of necessary actions to build the business through to the presentation. The consultants with whom the business works will not attend presentations or take part in active recruiting; but will, however, invite appropriate venture capitalists.
4. How does a capital in raising firm school the owners or stakeholders for the venture capitalist presentation?
Preparing for the presentation is akin to studying for a difficult final university exam. Your consultant will have all prepared materials at hand for you before and during the presentation, but owners or stakeholders must be thoroughly coached and prepared to give the most advantageous responses. This part of the process takes study and practice.
5. How can I be reassured that I’m choosing the right capital raising firm for my business?
First, look for the following attributes in a capital raising firm: a history of successful capital raising services within your industry sector, coupled with stellar consulting, preparation, and presentation materials.
Second, select a capital raising firm that is committed to your success in raising funding. This will be seen in the assignment of at least one consultant within the investment bank who is dedicated to finding the materials, researching the documents, offering advice, and preparing the presentation to achieve the positive outcome desired by your business.
Finding the right capital raising firm for your business means simply that you will have a supportive and highly-effective collaborator, dedicated to your success, during this transitional time of funding.