We speak with three to five CEOs per day who ask us how they should approach or revise their capital raise process and if there are additional investors they should consider. We thought we could more efficiently help the hundreds of CEOs in our GrowthCap community by sending along some quick tips below:
- Take the time to plan and to coordinate your process at the start with a defined timeframe around each segment of the process. This will help ensure that your capital raise process doesn’t run longer than it should. We’ve executed deals in as little as 30 business days, which is not the norm, but the fastest deals we’ve done have been because of very structured planning and execution.
- Create a comprehensive investor list and do some research on the key decision makers at each firm. Contacting this person makes a big difference. Many times, we have re-approached a private equity firm through a different partner than the Company initially spoke to – this has led to further interest and activity undertaken by the firm and in one instance led to a successfully completed transaction.
- Consider your alternatives between debt and equity and among various investor types from private equity to family offices to corporate investor groups to hedge funds to business development companies. Each has its own unique investing preferences. For example, recently we assisted a client in obtaining a debt investment from a specialized debt fund, which offered 2x to 3x the amount traditional investors were willing to provide.
- Be persistent. Continue to follow up with investors; some may initially respond with a lukewarm response or a straight up decline but they can be persuaded to take more interest and do a little more work. We once worked on a deal that was so far outside the mandate of a particular fund in terms of investment size and sector, but the fund ended up doing the deal as a result of persistent and persuasive follow up.
We hope the above tips are helpful and of course we are always willing to hop on the phone to get into further specifics about capital raising and investors.
Also, you can perform highly targeted searches for investors through our proprietary database, which contains detailed information on thousands of growth equity and debt investors. You can access the database here.