Asking For Capital

Virtually every project that intends to scale needs to raise capital. These are some pointers around “Asking For Capital”.

The truth is capital raising is as much about people as it is about “numbers”. There is no one process that everyone uses. However overall there are some considerations that come up time and again.

The Key Questions

How much is needed?
By when are the amounts needed?
For whom – what entity / people?
What is it needed for?
What is the exit?
What is being offered in exchange for the capital?
What are the risks of the projects not succeeding?
What guarantees? (re return of funds)
What guarantees? (re use of funds)

The investor / person with capital may also consider:

Do I trust / believe the people asking for capital (credibility)
Do they share my values / beliefs / ethics (integrity)
Do they have the right feel / work ethic / tone / approach (professional)
Do I get a good feeling / enthusiasm / energy for this person / project
Other opportunities they have / or may miss
How will this deal / project impact my relationship capital
Their risk / reward tolerance / preferences
Market conditions
Their interest in legacy / impact / social good
Their other related interests / synergies / strategic benefits
Their level of domain knowledge / experience

The Key Documents

These should help cover the key questions that the investor will be considering. It’s best to be as straightforward and real as possible.

Any assumptions should be disclosed with relevant “rationalisation”.

One Page Executive Summary
Key Cashflow Summary Breakdowns
Cashflow Disbursement Schedule
Relevant Deal Memo / Transaction Agreement

Forms of Capital

There are various forms of capital.

Donation/Gifts
Charitable Donation/Gifts
Grants:
- Returnable (0% finance or etc..)
- Non-Returnable
Sponsorship
- Specific
- Strategic
Equity Investments
- Global IP
- Group
- Specific Entities
Debt Investments
- Short Term
- Convertible
- Long Term
Licenses / Options
Sales / Revenues
Royalties