Capital Raising
Capital Raising for unlisted Australian companies via small-scale offers
Investor Ready Services
Acquisition | Property Development | Global Expansion | Leveraged Buyout | Investor Ready Program
Raising capital through equity or debt finance is a strategy many business owners consider to fund growth or acquire another business. In an equity investment, you buy into a company and your profit is related to the performance of the company.
Management may invite additional skills to the executive team when raising capital in exchange for selling equity in the company. In a debt investment, you loan money to a business, or a government institution and your profit is not directly related to the performance of the borrower.
Capital raising and Investor ready services for unlisted companies is a cost effective way to raise $1 to $10 million.
Get Investor Ready
8 Steps to be Investor Ready
- Have a solid and proven business model that is scalable
- Be investor ready before you solicit or invite investment into your offer
- Understand the key components of your offer to attract right investment
- Offer a realistic and attainable exit strategy to investors
- Structure your management team to create confidence
- Present your proposal through a professional and compliant process
- Seek external legal and accounting advice before promoting your offer
- Engage a capital raising specialist that helps to achieve your goals
Capital Raising Services
Vital to getting Investor Ready, we will discuss your successful business model to determine your company value and growth potential. Prior to commencing the capital raising program, we will work with you to build the business plan around your unique business model. To ensure the company attracts the right private investors to help you realize its full potential.
The investor is not that interested in your business, your product, market or what customers think of the product or service. Importantly, investors want proof of a ‘compelling investment opportunity’. Private investors must be convinced that their investment funds will enable a successful exit event. Therefore achieving the expected return on their investment. A successful capital raising starts and ends with how the company is going to make investors money. The Investor Ready program will prepare business owners for the investor due diligence process to establish key assumptions. Important to demonstrate ‘how’ the company is prepared to scale and when the anticipated exit will be achieved.
Capital raising alternative financing tool
- Implement a strategy after careful analysis of the use of trading debt versus an equity investment.
- Consider the benefits and costs of raising capital as debt is often cheaper than equity.
- The cost of the debt, i.e. the interest rate, is tax deductible.
- The ‘cost’ of equity is the earnings required to cover the non-deductible dividend payment.
- Consider an Investor Ready program to determine if debt or equity is your best financing tool, then
- Analyse small business trends to understand the market for unlisted small-scale offers
- Business Innovation and Investment accessing foreign investors via VISA 188 Subclass
Capital Raising create a ‘compelling offer’
For your capital raising to be successful, resulting in an IPO or financial trade sale, we must demonstrate the potential to sustain the revenue and current profit levels to provide a good return on the investment. Your investor ready program must satisfy some capital raising basics showing high growth potential criteria, such as;
Identifiable CustomerGlobal OpportunityGrowth StrategyExecution StrategyBarriers to EntryManagement TeamPurpose of FundsRealistic ValuationExit strategy
- Raising capital programs
- Disclosure Offer Documents & Pitch Deck
- Issuance of SME Bonds debt securities
- Business exit strategies
- Full & partial investment campaigns
- Australian acquisition opportunities
- International investors network
Capital Raising Process
- Evaluation of the business opportunity
- Getting the business model investor ready
- Key components of a successful Offer or Exit
- Professional presentation of your opportunity
- Reasonable valuation versus risk and reward
- Targeting the right investment channels
- Negotiating terms, shareholdings and exits
- Fulfilling your obligation to investors
- More capital raising details visit our FAQ page
Quality of Management
Size of the Opportunity
Rate of Market Growth
Competitive Landscape
Barriers to Entry
Stage of Development
Current Capital Structure
Equity and Valuation
Capital Raising Essentials
- Proven business model & solid execution plan
- Unique IP and a clear competitive advantage
- Disrupt an existing market or create new one
- Dynamic and amenable management team
- Return on Investment of 25% of higher
- Exit strategy as trade sale or IPO in 3 to 5 year
- Essential that your business opportunity is investor ready
Raise money for your proven innovation, first to market strategy via an unlisted small-scale offer.
Investor Ready programs that suit your stage of growth to attract the right funding.
Raise capital to
- acquire another business to grow market share, or franchise the successful business model for scale
- strategically execute the new business model, or launch new products or services
- fund research and development around innovative products or disruption existing markets
- retiring of debt by issuing new capital via rights issues, bonds and placements
- management buyouts or business owners who want to liquidate their shareholding
- fund property development projects from private investment
- secure alternative finance, however, understand the 5 best ways to raise capital
Capital raising for unlisted companies
Over time, equity based investments will provide higher rates of return than debt based investments. Capital raising should include a alternative finance mix of debt and equity to manage risk and return.
Raising capital risk versus return
The aim of private investors is to secure the highest rate of return appropriate to the risk, due to the high level of risk if a company goes into liquidation. Equity investors expect a high return between 25% to 50% within a 3-7 year time-frame or longer. Debt investors typically look for a return of 8% to 20% per annum over the short to medium term as debt ranks higher than equity.
Capital Raising participants are;
- Institutional investors
- Corporate finance within the Banks
- Private or Individual investors which represent the following;
- the passive long-term investor
- the active hands-on Angel Investors
- the irregular trader
- individual venture capitalist or small fund
- family members of the business owners
- investment & business introduction agents
- crowdfunding trading platforms
- peer-to-peer or B2B private funding
Capital Raising considerations
Different funding options impact on a number of important areas, which needs to be considered carefully before making a final decision on the best capital raising structure for your company while offering an attractive return on investment to potential investors, such as;
Capital gains tax implications
Dividends vs. capital growth policy
Exit strategy 3-7 years
Independent valuations
Board representation
Existing staff agreements
Management or employee options
Performance options and bonuses
Capital Raising Stages
Produce Prototype
Proof of Concept
Shows initial revenue
Break-even or negative
Maybe profitable
Expand market
Significant revenue
Trade Sale or Exit
Capital Raising success through valuations
Successful capital raising is about alignment with your potential investors starting with the management team and growth strategy to scale the business. The most common reason for unsuccessful capital raising negotiations is the valuation and agreed method used to determine the value. A thorough investor ready analysis before going to the market to raise capital is important to determine “How much is your company worth?”
Comparable Company Analysis
Discounted Cash Flow Analysis
Precedent Transaction Analysis
Leveraged Buyout Analysis
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When raising capital the 3 most common “valuation concepts” used are:
Enterprise Value – the total value of the company’s net operating assets
Market Value – the value of the company’s issued shares of common equity
Book Value – expected value of a company’s assets after paying off all existing liabilities
