Companies, no matter what kind of size they are, will always rely on some level of external funding in order to turn a profit longer-term. Whether this is from a bank, investor/s, or even from thousands of people on a stock market. This is known as Capital Raising, and it's a necessity for companies of all kinds.
On its own, it's a loaded term, so it's worthwhile to unpack it somewhat to better understand. So, what do we mean when we use the term Capital Raising? We refer to the capability of an individual or entity in securing investment or capital in order to allow the business to get started, maintain ongoing development, or even build up development.
Along with unpacking the term, any organization or startup looking to secure some level of capital raising can't simply distribute shares or go in front of a banking team and request a loan. So how do you, as the head of your own business, achieve this? First and foremost, you need to have some kind of strategy in place for hashing out what it is you have right now and what you're going to need in the future in terms of capital.
For any business, that's the name of the game when looking to obtain investment. And while it can mean the difference between the life and death of your company as it stands, it's a step that is frequently, and foolishly overlooked. This step actually goes by a broader name.
Commonly known as a Capital Raising strategy, and for any fledgeling startup, or company looking to build up its staff, operations, etc, it's one of the best things that you, as a CEO can do. Generally, it involves getting as firm an understanding as you can regarding things like your annual profit margins or turnover, including outgoing expenses for staff, various projects and spent resources.
While this is the most time-consuming part of any broader plan to obtain funding, the more you do - the better positioned your company will be in securing the funds needed. Along with understanding the company's current in and outgoings, you'll need to get as close to a 360 degree understanding of the underlying health of your company.
So, with the ins and outs of your company thoroughly understood, you'll need to look at the various ways that you can obtain investment and where would be best for you. The first question would be what kind of investment companies you can approach with your company for investment and making a list of what firms you can arrange meetings with.
It's important as well to think of if the kind of product/s you sell are for a niche audience. For example: if your company is Sales as a Service, or operates as a supplier for smart cities, blockchain or healthcare - then it's worth looking into whether there are investment firms.
We'll be delving into more of the strategy for Capital Raising, including the various kinds of capital raising you can obtain, investment types available for your company, including how startup companies can get started and successfully securing investment capital. So stay tuned to TrustIn Trading for more insight into the financial world!