Show me the money! – Tips to raise capital
Raising money is tough. It takes time, energy and 100% commitment. How to focus on the day-to-day grind of managing your business yet also commit fully to the funding process is a ‘Catch-22’ that challenges even the most experienced entrepreneurs and managers.
Having enough working capital or funds to power your essential business needs is critical. In fact it is the life blood to succeed. Whether you’re looking to fund growth plans, acquisitions or changes in ownership, you’re likely to need to raise funds to achieve your goals.
Think about it – there’s got to be a reason why investors hold the purse strings and you don’t. We’re talking about some of the most risk-savvy people and best business minds around town.
Investors are a hard-nosed lot and expect a business to demonstrate it’s got what it takes to deliver the goods over a sustained period, with substantial returns.
There are credit and debt markets including corporate bonds (not widely used in Australia), sometimes a blend of funding may suit your needs. It is the cost of capital which is the key!
Initial equity capital raisings are a feature of the equity markets. In volatile markets the pricing (and cost) is tricky.
Secondary equity capital raising include:
- Rights issues
- Dividend re-investment plans
- Convertible notes
Capital raisings are governed by the Corporations Act and ASX Listing rules. So you need to get the right advice.