"Business opportunities are like buses, there's always another one coming."
Seedcap capital advisory work closely with growth companies to raise capital to fund their growth strategies.
Since raising capital is often a long and complicated process typically lasting anywhere between 4 to 8 months, including us in the process allows management to free up time for product development and sales while avoiding the worst pitfalls and at the same time expanding business opportunities.
A typical fundraising process can be split into four phases:
Brief overview of the company. Initial meeting with the company leadership to establish if the company is scalable and is addressing a large enough market. Often we turn down entrepreneurs who have unrealistic expectations and show an unwillingness to expand their teams.
The competition for capital is relentless and it is our view that only a select few companies with groundbreaking business concepts, and that are led by great teams, stand a chance to raise capital.
2. PREPARING (1-3 months)
If the company is a great prospect for raising capital we do our due diligence to assess risks and what may be further improved and strengthened. Following the DD we set an action plan and help management to prepare the relevant investor documentation, e.g. financial reports, intellectual property rights, insurance, legal permissions, and contracts with suppliers, partners and clients.
With the documentation in place, we create a curated investor road map with highly relevant potential investors.
3. PITCHING (2-3 months)
We drill management in investor pitching making sure that they can back up their claims with facts and support their assumptions in a logical and convincing manner. We go through term sheet terminology and negotiation techniques.
We also discuss company valuation, option pools, dilution and ownership structure. Pitching ensues with the goal of attaining more than one term-sheet giving the startup a stronger position in negotiations.
4. CLOSING (1-2 months)
Having secured one or more term-sheets we advice the startup to enlist the help of a lawyer specialised in investor negotiation and agreements. The aim is to obtain a fair valuation and great match between our client and the investors in terms of overall strategy, goals, industry knowledge, competence, resources and network.
This last part of the process is of course followed by the investors own due diligence process and (if all is well) proposed investor agreement.
Copyright © All Rights Reserved