This guide outlines how consulting advice can lead to a better result when you are raising capital for your business ideas.
One of the qualities of an entrepreneur is that of dreaming up innovative business ideas. Funding is, typically. the least favorite of the thought processes of an entrepreneur. Fortunately, there are companies who can strategically come alongside to guide and direct the entire process of raising capital…while the entrepreneur moves on to the next innovative idea.
The strengths of an organization are found within the essential elements that make it a whole: operations, management, marketing, financial, and more. In order to fully explore the subject of raising capital via the services of a capital raising consulting company, the consideration needs to include each of these elements. Why? Because as much as an exciting new direction or innovative solution needs capital to grow; the internal support of these elements require capital, as well. Excluding one of the internal elements could deflate the entire process, resulting in a flat performance or worse. Nobody is interested in that outcome. As such, our conversation will highlight the intersections of capital raising consulting services and every functional part of an organization. Sounds like fun, doesn’t it?
Capital raising is, in fact, a lot of fun. Isn’t it exhilarating to consider how much growth could be achieved by opening a new division in housewares or creating a new product line? What about starting a medical spa or creating a to-be-patented software solution? The visionary threads in many of us lean in with alacrity to note the scope of possibilities while the analytical threads of our brains sit back to assess and analyze.
Tactics for raising capital
Let’s take a look at the opportunities that can be opened using the services of a capital raising consulting firm. Fire up those neural pathways and take a look at the process of securing and succeeding with a capital raising consulting firm.
The Hard Question
This is a thorny question with a straightforward answer: Does anyone in your business thoroughly understand how capital raising works and, just as critically, have the ability to guide your company through the process while the business continues running smoothly and successfully? If not, you’ll want to start seeking the services of a capital raising consulting company.
What Services Do You Need?
First, you’ll want to consider a capital raising consulting company that has financial wizards close at hand. These folks will be able to calculate anything and everything for a small to mid-sized company in preparation for some heavy-duty capital raising. In addition, these same wizards will want to offer counsel regarding the integrated process of obtaining capital, funding processes, and assigning capital to various needs within the organization.
Look for Realists
It is time to cast a realistic eye across the horizon of your business and, it’s time to position some flinty-eyed realists standing there beside you. Most consultants in capital raising companies are realists because their experience is built on a successful record of guiding companies to a secure growth position via raising capital. You’ll want to align your efforts with a company composed of such realists. In short, look for consultants who have a great breadth and depth of capital-raising experience.
The First Steps Set the Stage
A capital raising consulting company will come in to create a draft of a plan for your company. After the draft is reviewed and approved by your company, the strategic plan will be completed. Within the strategic plan, you’ll find a preparation process, a pursuit process, and a proposed completion process. Strategically, this is everything you’ll need from start to finish; conversations with the consultants will guide the process your business will take to achieve the funding needed.
Place the Backdrop on the Stage
Funding won’t be considered by prospective investors unless the structure of the proposal is properly created. This is the time to bring the financial wizards, aka capital raising consultants, back onto the stage. A complete picture of your company’s financial performance must be prepared. Following that, a full set of financial projections need to be created. Finally, a completed prospectus of the financials must be crafted for your company to hand off to prospective investors.
Take a Break Before the Big Show
Most capital raising consultants will suggest that there is a pause or slowdown of progress forward to ensure due diligence has been done during the preparation of the materials. Investors are known to be very inquisitive, so you’ll want to have all documents handy; such as financial, legal, intellectual property, licensing agreements, customer lists, contracts, and any other documents that investors could ask to review. And, make sure each is correct and recorded appropriately.
Rehearsal for the Big Show
At this point, the capital raising consultant company will assist in evaluating potential capital structures and determine which balance of debt and equity is right for your company. They will also help create an offer that will appeal to potential investors. This is, in large part, why these folks come to help guide your company: capital raising consultants are well-versed on the role they play and how to get the outcomes desired.
In addition to considering structures, the consultants will help build a set of marketing materials that investors will want to see; including business plans, pitch decks, press packages, due diligence items, financial models, term sheets and legal documentation.
The Curtain Goes Up…
After a bit of rehearsal and confirmation of package materials, the presentation of your company will go live. You will be prepared for any “hard” questions, as well as become confident in the answers you offer. This, in short, constitutes a very successful “show” and one in which open opportunities will appear. There could even be applause at the end of your pitch, a sure sign of buy-in.
In case you need the shortcut version of this article: Here’s a partial list of the services a capital raising consulting company brings to your door:
- Management of the capital raising process
- Strategic guidance and report of current financial condition and financial projections
- Identify and remedy any issues within your business that could concern investors
- Coach your company pitch for the Big Show
- Provide financial wizards to oversee the projects and help craft the direction for funding
- Guide the messages your executive team shares with potential investors
- Create all materials, detail the strategies for presentation and make your team look really good along the way
Conclusion
There is little doubt that a capital raising consultant company will open opportunities by guiding your business toward a successful outcome and new capital. And, we can’t wait to see what develops next for your company. We wish you every success!
