Raising Growth Capital
Need not be Stressful
Most startups need to raise growth capital as they start servicing more customers and enter new markets. But the process of raising capital is often an onerous journey involving multiple discussions, presentations, and meetings with investors and capital providers. Fund raising thus always consumes lot of band width of the founding team.
But founders who are busy with product development and customer meetings, are not able to devote the time and energy required to research investors, and plan for fund raising discussions. In these scenarios, Flument’s consultants can help founders and finance teams with necessary guidance regarding growth capital (as per the product & industry), the prevailing valuations in the market, and prepare the groundwork for fast closure of investment deals.
What's your Growth Story for fund-raise?
We are our choices. Build yourself a great story.
- By Jeff Bezos
We help founders craft that investment story, pitch deck, valuation analysis and due diligence; to make the best impression in front of capital providers. Our services go beyond Growth Capital Research & Advisory, and extends to helping founders meet patient investors to support your long-term vision for the start-up. But before you plan raising funds from external investors, let’s look at all the types of Growth Capital available for founders today.
Types of Growth Capital
A founder today has variety of options to raise capital. Lets look at the popular options in the diagram below.
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Many founders bootstrap or tap into friends and family in the initial stages of the enterprise. However as the business prospect improves, equity dilution (via seed capital, venture funds etc) are other popular ways to raise capital. At this stage, the founders negotiating strength with investors will often depend on the strength of the concept or any positive customer traction that can be showcased. ​
Raising funds from investors would often result in the dilution of founders equity in the enterprise. If the founder is not interested in diluting equity, he/ she can also explore alternative options, such as debt and bank loans. However in the initial stages of an enterprise, availing these bank financing options require pledging of collaterals (i.e. personal assets like gold & property), can create a liability and repayment obligations that are often difficult to manage.
This makes equity dilution the preferred way forward for most founders for raising growth capital to fund business expansion. The table below gives a broad idea of the scale of the capital raise that is usually possible at various growth stages. Please note that the amounts mentioned for each stage are indicative and may change as per the operation experience & background of the founder, the value proposition of the business, the overall customer traction, and lastly the financial performance of the start-up.
Flument Growth Capital Advisory and Research Services
After understanding the overall requirements to support ongoing and future growth plans, Flument team can help in selecting the type of capital most beneficial for your business. We also undertake custom market research services to give you more insights about the industry structure, pricing dynamics, and the comparative value proposition of other companies operating in the same space.
Flument Team provides the following value-add resources and activities, as part of its Growth Capital Advisory Services.
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A Growth Capital document comparing the Equity, Debt and Government Grant options that are available to founders across markets.
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Assistance in fine-tuning your start-up's investment thesis, by looking into the Product Value Proposition, Customer Segments and Industry Dynamics. We also undertake primary & secondary research to capture authentic statistics & quotable trends that support the investment proposal.
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Calculate anticipated valuation for your start-up using DCF, and other valuation methods. We also do a comparative analysis of the valuation of your present competitors in India and other markets.
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A customised Valuation Calculator (with changeable assumptions / scenarios) that helps you understand the likely impact of business performance on your start-up's valuation. This tool also provides you with a Fair Valuation Indicator, to assess the fairness of any proposed Deal Price, in ongoing and future fund-raising discussions.
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Flument Investor Marketing Services
This is a specialized service, where Flument team plays a more active role in the fund raising activities for a start-up. The value-add resources and activities, that are part of the Investor Marketing Service includes the following,
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​​​​Preparation of Investment Deck, Valuation Model, Market & Sector Research (as mentioned in the previous section).
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Assist founders with ongoing pitch discussions / meetings. Customize Investment deck as per the Profile of Investor.
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Provide ongoing assistance in securing meetings with top investors through customized proposals / emails / personal discussions.
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Co-ordination with VC’s and external professionals for Deal Documentation and Due-Diligence.
Talk to us for more details!
Whether you are looking to quickly value your start-up, or adopting a self-use Fair Valuation Model, or understanding comparable valuation through primary & secondary research; we have solutions for all your needs.
Please contact us with the nature of your requirement, and our valuations team will set up an exploratory online meeting as per your convenience.