For Those Looking to Raise Capital
Raising Finance
Why Raise Capital?
Companies raise venture capital for a wide range of reasons including to:
Hire human capital
Grow the company (sales and marketing) and acquire market share
Have a competitive advantage (more nimble in the market place)
Provide funding for working capital and to build cash reserves
Enhance credit and borrowing status (use equity to get debt)
Launch new products and provide investment for new initiatives
To provide development funding and project funding (eg. for mining tenements)
Fund acquisitions and joint venture partners
Fund capital investment and expansion (project finance)
Retire debt / reduce balance sheet gearing
Increase profit by reducing interest costs
Match grants funding
Exit the business gradually by selling down shares
Negotiate with stakeholders (ie. bring money to the table)
Replace shareholders
In this section we will explore your capital raising options and provide options on how and where to start.
Raising Venture Debt
Funding Strategies partners with companies to provide financing solutions for a range of business activities including re-financing operations, equipment / debtor funding, growth opportunities and acquisitions. We offer a range of debt solutions and funders.
We have an extensive network of counterparties / funders to deliver bank and non-bank funding including:
Senior Debt
ATO Financing
Mezzanine Finance
Trade Facilities
Working Capital
Acquisition Finance
Invoice Finance
Refinancing Debt Facilities
Equipment Finance
Insurance Finance
Stock Lending
Convertible Notes
R&D loans
Venture Debt
Secured (with property, assets and or invoices) Facilities
Unsecured Finance
Our confidential counterparties include:
Banks for senior debt, equipment and trade invoice finance
Non-banks for senior debt, equipment and trade invoice finance, and including venture debt and mezzanine debt; and,
Family offices, private debt and debt funds
Offshore funds and investors
Raising Equity Capital
Equity capital is raised via the issuing of shares for cash.
In Australia, raising equity capital is governed by the Corporations Act and generally involves two options – one via Disclosure and the other via Non-Disclosure. The diagram below generally illustrates the capital raising options available.
Raising via Disclosure
Raising equity capital via Disclosure requires the company to issue an Offer Information Statement (OIS) or a Prospectus. These documents need to be submitted to and approved by ASIC (Australian Securities & Investments Commission). The cost of producing a Disclosure document is generally higher than via non-disclosure due to the legal and compliance obligations. Generally a company can raise as much equity capital as they wish (subject to shareholder approvals etc.) via this route and the company can advertise to the public in order to raise the funds. Most companies raise via Disclosure if they are going to list on the stock exchange, for example.
Raising via Non-Disclosure
If raising equity via Non-Disclosure, funds can be raised under an Excluded Offer. Under this option, the company cannot advertise to the public and there are strict restrictions and penalties regarding share hawking, advertising and cold calling. Generally raising under Non-Disclosure is cheaper than raising equity under Disclosure due to the lower compliance costs.
Excluded Offer
Under an Excluded Offer, a Company cannot approach "retail investors", and can only approach sophisticated and professional investors. Under an Excluded offer the company can generally raise up to $10m but are restricted on who they can approach.
Knowing how to raise capital is complicated and there are criminal penalties for not getting it right. If you have any questions about how to interpret fundraising laws, please contact your lawyer.
If you are interested in the raising of capital, equity finance or debt for a particular matter or have any queries please contact us or fill out the Capital Raising Form which can be downloaded here.
Click below to access our list of products we have available for those seeking to raise capital.