USA Fundraising. Securing capital to grow your business
Exploring options for raising capital to support business growth
If you have your sights set on scaling your business, accelerating growth or making strategic acquisitions, you may need to consider some sort of fundraising.
Raising capital can be important for business growth and there are a number of different ways you can approach this. The right choice – or mix of funding – will depend on your circumstances, how you plan to use the funds and what stage of growth your business is at.
Each type of funding comes with different upsides as well as risks, and it’s essential to understand the impact of different options. You’ll also need to prepare your business to increase your chances of securing funding on the best available terms.
At Evelyn Partners we are experienced at helping businesses of every shape and size access the funding they need to grow successfully. We’re here to help you during this exciting stage.
Different fundraising options to support business growth
Raising debt
Businesses often choose to explore debt financing to help fund growth or support an acquisition.
While debt finance may typically have a lower overall cost than equity funding and helps ensure the current owners retain control of their business, it comes with conditions and a future cashflow cost.
There may be a range of debt options available to you, including:
Asset-based lending
Here, companies use their assets as collateral to secure a loan. These assets can include everything from property and inventory to your outstanding invoices (often through invoice discounting). Your collateral provides security for the lender, meaning asset-backed lending is typically less expensive than other forms of debt finance.
Cashflow financing
Rather than borrowing against your assets, cashflow financing – also known as cashflow-based lending – takes into consideration your company’s past and future cashflows. You are borrowing against the profits you expect to receive in the future. Because of this, cashflow financing is usually more expensive than asset-based lending but can be very useful if your business is not asset-rich at present or you currently lack reoccurring income streams.
Equity finance
Rather than borrowing money, equity financing allows you to access capital by giving away a slice of ownership in your business. Businesses opt for equity funding in different scenarios and there are number of options available.
Equity for growth
If rapid acceleration is your goal and your business is ready to expand into new markets, increase production, diversify or ramp up research and development, securing equity finance can help unlock opportunities. The equity financing options available depend on the stage your business is at:
- Early stage businesses often seek funding from angel investors and can take advantage of tax-efficient issues of new shares through the Enterprise Investment Scheme (EIS) or the Seed Enterprise Investment Scheme (SEIS)
- Mid-size companies may secure venture capital to help fuel growth
- Later-stage businesses may attract private equity investment
More mature businesses sometimes work with an equity partner to help fund acquisitions as part of a "buy and build" strategy. The equity partner can provide finance, in exchange for a stake in the business, as well as support in executing an acquisition strategy and integration.
Mezzanine finance
Mezzanine finance bridges the gap between debt and equity to provide a hybrid option. It usually costs more to access funding through mezzanine financing than debt financing, but you don’t dilute ownership of your business to the same extent as you may do with equity funding. It can be very useful to fast-growing businesses and it’s an innovative way of securing capital outside traditional debt.
Investor ready financial model
When preparing to fundraise, an effective, flexible and robust financial model is critical. To support a successful transaction, we combine technical skills with a pragmatic business understanding to develop a model tailored to your unique situation. By identifying the key assumptions and variables affecting your business, you can demonstrate to investors a variety of scenarios and sensitivities to help secure funding.
Exploring the right fundraising route for you
Evelyn Partners can help you navigate the fundraising landscape. Drawing on our extensive experience and market insight, our specialist teams will guide you through the process, offering expert advice on the different options available.
We’ll help you identify the right sources of financing and will work with you to design a bespoke process to find a funding partner that represents the best value for your business, both financially and culturally, to help you achieve long-term success.
We have excellent relationships with major UK private equity firms, venture capital investors and debt providers and will leverage these on your behalf.
Speak to Evelyn Partners about raising capital to grow your business
Get in touch to speak to one of our experienced advisers about your business growth goals and the best available fundraising options for you. Request a call back or call us on 020 7189 2400.