CAPITAL DEBT AND MANAGEMENT STRATEGIES

With Financial Vetting & Capital Group

Raising capital is a serious task and often requires serious dedication, determination and patience. It is a fundamental process that requires the business to be well organized and ready for new funding. Capital can be raised in the form of debt, through a financial institution, or equity, through a financial backer whether it is an angel investor, venture capitalist or private equity group. In any case, it is advisable that there is a clear understanding of the pros and cons of equity and debt prior to raising capital.

Selecting the right type of capital essentially depends on the stage of the business (early or late), industry (mature vs growing), capital required (product launching, growth, R&D, working capital) and strategic goals of management, among others:

DEBT

Traditional financing products remain the primary way small businesses fund their operations. The majority of financing for SMEs comes from business loans, credit cards, and lines of credit. Generally speaking, the small business loans with the most favorable rates and terms are going to be SBA loans and term loans from banks and other financial institutions. To get approved, you typically need to meet requirements like the following:

  • You have been in business for at least 2 years
  • The business has strong, stable annual revenues (typically at least $100,000)
  • Good credit (score of 700+)
  • hard collateral
  • personal guarantee

If you have outstanding invoices, you could opt for invoice financing to get that money faster. Or, if you need cash for machinery, tech devices, office furniture, or something similar, consider equipment financing.

EQUITY

By selling equity in your business, it means you're offering some percentage of the shares of your business in exchange for capital. It is key to understand the amount of capital needed and know that different investors come in at different stages:

Friends and Family (investment: up to $50,000) represent the initial go to capital resources for early-stage ventures as they will be willing to support you regardless of what you want to do. Family and friends are the only ones who know your potential and will be willing to take extra risk and give you money to start your business. Although it has its downside – not everyone likes having family involved in the business – it may be a feasible, short-term option to fund the business.

Angel Investors (investment: $50,000 – $500,000) are high net worth, accredited individuals who not only provide capital but also mentorship, networking and experienced guidelines. Generally, they invest up to $1 million and usually get involved early in the process. It is advisable that if you consider angel investors try to look for someone who is in the same line as you are or has had success in that line. Focus on those investors who have the expertise in your target market.

Venture Capitalists (investment: from $500,000) are institutional investors who have pooled capital together through limited partners for LPs and have a targeted investment criteria and types of businesses they're going to go out and seek. These types of opportunities are also high-risk, high-growth companies to generate a return that's significant enough for the amount of risk that these investors are taking. Venture capital funds generally will invest in C stage deals which could be half a million dollars up to a couple million dollars, or series A deals, which on the low end could be at least $10 million.

When venture capitalists are evaluating companies, they are looking at many different criteria and looking at many opportunities, so you need to make sure your business is a fit for venture capital and understand that in many cases you will have to find another financing need to grow your business.

As part of our focus, we perform the following capital raising services:

  • Assess the capital structure of the business and find an attractive mix to finance current and future needs
  • Identify and evaluate capital alternatives available that suit the business based on specific goals and requirements
  • Target appropriate financiers and capital providers
  • Advise during negotiation, structuring and closing

To understand your capital needs and help you identify the detailed capital raise requirements - We have the expertise and knowledge to get you funded.

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WE ARE THE BRIDGE...

We are the bridge between where you are and where you want to go. Providing 'responsible' and direct capital access while limiting any resulting debt is our mission. We deploy a global team of talented insider capital and funding specialists who possess relationships from traditional debt, equity investment, classic institutional finance, family offices, and high-net- worth investors.

 

Rounding out our global, diversified financial instrument portfolio includes our premiere representative relationship with a United Nations Global Market place lender, and even more, the top three (3) humanitarian capital programs for private projects that are available on a private- invitation basis only. We provide you, our private select clients, with our unique, direct-access to this sovereign and institutional level capital, financial instruments, and U.S.- based, award- level capital raise firm for all major market sectors.