How to Raise Capital
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How to Raise Capital

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Transcript

  • 1. How to Raise Capital
    Best Practices
  • 2. Exploit a window of opportunity
    Make critical operating investments for which you lack existing resources to fund
    Decrease your financial exposure
    Why Raise Capital?
  • 3. Debt
    Short-term: working capital
    Long-term: property, plant& equipment
    Equity
    Accelerate value creation to capture an opportunity
    Long-term growth & sustainability
    Rescue un-bankable company
    Pursue the right TYPE of Capital
  • 4. Balance of “Smart” Money with Cost of Money
    Self, family & friends (inexpensive)
    Gov’t/Higher Ed Grants/services
    Banks/Receivable/Equipment financing
    Investors (smart & expensive)
    Pursue the right SOURCE of capital
  • 5. Industry & Stage Focused: pursue good matches only
    Customers & Vendors
    Private investors
    Venture Capital Funds
    Equity Sources
  • 6. You CAN succeed if you
    Have the right team with the right plan
    Pursue the right capital (source & type)
    Understand & engage your audience effectively
    Work hard & refuse to quit
    Get ready to be expertly tested:
    Compared
    Held accountable
    Rejected
    Raising Capital: MAJOR Effort
  • 7. A strong leadership team is a must
    Sales makes you credible
    Profit makes you powerful
    Operate with Excellence
  • 8. Clearly articulate:
    The important problem you are solving
    The market opportunity (and obstacles)
    How you will compete successfully
    Results you will realistically achieve
    Create a Masterful Business Plan
  • 9. Subject matter experts AND deal experts
    Consultants
    CEOs
    Attorneys
    Accountants
    Bankers
    Build the right Advisory Team
  • 10. Have experts opine & explain the value
    Be reasonable
    Dilution that gets you where you want to go is NOT “giving up” a piece of your company
    Determine the Valuation
  • 11. Appoint an expert Lead/Negotiator
    Be prepared to answer important questions
    Have diligence materials ready to go
    Create list of “best fit” investors/lenders & determine best route to contacting each
    The Sales & Marketing Process
  • 12. Follow their lead, get on their wavelength
    Be confident, never cocky
    Answer questions honestly & directly
    Don’t “try” to sell
    Evaluate their “fit” and ability to add value
    Investor Meetings
  • 13. We don’t need advice
    We have no competition
    Our Plan doesn’t need improving
    We don’t know who will buy our software because every industry should want it
    If we build it, they will come
    Deal killers
  • 14. 3-12 months
    Many “no’s”
    Investor confidence in Management means a better offer
    Process Expectations
  • 15. Critical path to building substantial wealth
    Investors & lenders have plenty of capital & reasonable terms for the best
    Be one of the best!
    Final Pointers