Posted on: May 20th, 2013
In two words – poor planning. Companies often struggle to raise capital in large part because they are ill prepared for the process. Most business owners attempt to raise capital on their own or through the connections of their accountant or lawyer.
They don’t know the various types of financing available and they lack the contacts to be able to start the process. With little knowledge of how to run the process or what the best types of capital are, companies frequently underestimate the time and resources needed to successfully raise capital.
Often the job is allocated to a controller or CFO who may be good with numbers but has no knowledge of how to successfully raise capital. Those that struggle to raise capital would be wise to consult with advisory firms that have developed processes that simplify the process of raising capital.
These firms will be able to instantly assess what type of capital is appropriate, given the size, financial status, and growth outlook of the business. Aditionally, these firms are instantly able to understand the business model strengths of the company and why a lender or investor would be interested in it.
These firms are also experts at articulating the strengths of the company to the market, through highlighting important elements of the company’s business model.
Finally, these firms have many contacts in the market that they can introduce your company to in order to accelerate the process. Through structuring, communicating and connecting, these firms offer a full turn-key solution to assist your company raise capital.
To raise capital successfully is to find the right firm, and leverage their expertise and connections.