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BBVP offers advisory services for private fundraising.
Who needs funding?
Start-up business often requires an injection of funds. Existing businesses may have to overcome short-term cash flow issues, fund expansion, or as part of the business plan's investment cycle.
Investment cycle?
Initially it may be that the business is funded by the owner or by approaching family and friends. Then the local bank might be approached, followed by a business angel. At the point of raising say $500,000 professional venture capital firms might be brought in. Very few companies go straight out and raise $2million. Those that do are often high tech businesses.
Types of funding:
Self-funded
The individuals starting a business may have sufficient savings to enable them to provide the necessary funding.
Loans
The business's funding requirements can be met by borrowing the money.
Private equity funding
This is the generic name for sources of funding which come from a third party that is not a recognized lending institution. They can come in a variety of guises from 'silent partner' to 'business angels' to 'venture capitalists'.
Venture Capital is normally applicable when seeking to raise $1million or above, probably for an existing business. Start-up companies and below $1million often need to approach Business Angels.
These providers of funds will require a stake in the business in return for which they will provide the funds. The exact terms and conditions upon which this funding is made available will need to be governed in a detailed investment agreement.
Private equity funding can come in stages as the business grows:
Seed funding
First round
Second round
Later stage
Mezzanine
How to target the investors?
It necessary to have a crystal clear idea of the investor profile. How much money do you want? How important is control? Who can help you grow the best? Who will give you the highest valuation?
Together we prepare a list of potential marriage partners.
If the investor expresses his interest they want to meet your management team and understand your business ideas. The key issues will be about product, technology, marketplace, finance and strategic fit. We will focus on specific hot issues toward closing a deal.
Deal profile
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