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Business Finance Tips – Getting the Most Out of Your Capital Raising Campaign

June 16, 2010 by Frank Goley, Business Consultant

The following are key things to keep in mind when structuring and obtaining Commercial Finance, and Raising Capital through Venture or Alternative Finance.

1.     Write a solid Business Plan

a.     Ensure your Strategic Plan process encompasses your Product or Service Development, Marketing Analysis and Marketing Plan in order that your Financial Plans and Statements develop a Financial Strategy which is realistic and achievable.  This will go a long way in obtaining the Funding your Company requires.

2.     We recommend you self-fund and use private investment funds for 10-20% of the total required Company funding, using this money to initially develop your Company to a point where Venture Capital Funds and Commercial Lenders are more open to the opportunity.  This will significantly shorten your Funds Acquisition time and obtain better Finance Structure and Terms.  A great Finance mix could be:

a.     Founders/ Angel Investors Cash:  20%

b.    Venture Capital Early Stage:       20%

c.     Bank Finance:                            30%

d.    Commercial Finance:                  30%

Note:  The lower the Founders/ Angel Investors Cash percentage, the more Venture Capital you will need, which in turn will require more Equity Sharing and less Control of your Company’s Board of Directors.  Positioning your Company with an initial 20% Cash Investment, minimizes the strain Finance can have on a Growing Business.  A 20% Cash Investment will develop your Company to the point which a VC Firm will be interested in your opportunity, leading the way to more Conservative Bank and Commercial Finance.

3.     Do your own Funding Source Research.

a.     Utilize networking and connectionsb.    Compare your results to what an experienced Loan Broker can do for you.  Choose the best avenue.

4.     Don’t Excessively Shop your Deal.

5.     Be flexible in your Finance Negotiations but protect yourself.

6.     Close the deal if it matches up with your Capital Financial Strategy.a.     If the proposed funding does not match up with your Strategy, utilize your back up sources or Explore Alternative Forms of Finance, using the Alternative finance on a short-term Bridge basis to buy you time and secure the funding better suited for your strategy.

Posted in Business Finance.

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