Fund-raisings | Playing a key role at a vital time

Most businesses encounter an opportunity at some stage in their development to engineer a step-change in their rate of growth.

The new opportunity may have been triggered by market, technological or management change. In other situations, there may be an opportunity to turn a business around following a period of difficulties, or the opportunity for growth may be the product of far-sighted decisions that have positioned a business in a new, expanding market.

Extra cash will often be the key to unlocking the future potential and making the most of the opportunity. Corbett Keeling understands the issues involved and the timescales to which management is often operating in such circumstances.

Whatever the reason for a fund-raising, Corbett Keeling has the ability and experience to help growing companies with attractive prospects raise the funds they need to satisfy their objectives. Corbett Keeling’s expertise and contacts: • improve its client’s prospects of raising finance; • increase the speed with which funds are raised and minimise the disruption to the client’s business; and • result in finance being raised on better terms

The steps in a fund-raising are generally as follows:

Preparation

Preparation is key. The first step in fund-raisings is generally to analyse and evaluate the opportunity that is to be presented to investors. In this way, a decision can be made as to whether funds can be raised and, if so, how much should be raised, the funding structure and the best source for the funds. The investment proposition, including the business plan and all associated documentation and presentations, can then be adjusted so that they are put forward to the chosen investor group in the best possible light.

Finding the right type of investor

A crucial aspect of any financing is the proportion, if any, of the business that its owner(s) will have to cede to the new source of funds. Different investors will require owners to give up different amounts – the actual amount depending on how attractive they find the business proposition and the return they are seeking. Certain investors have preferences as to the sector and stage of development of prospective investee businesses and most have upper and lower limits on the amounts they may invest. Some prefer to invest alongside other parties while others prefer to invest alone. Finding the right type of investors – be they providers of equity or debt – is vital.

Making introductions to investors

An important feature of the service provided by Corbett Keeling is to direct its clients towards those sources of funds that are most likely to find their proposals attractive – and then to raise funds from them on the best possible terms.

Relevant sources of funds range from equity to debt and from those interested in backing unquoted businesses to those solely interested in the quoted markets. The best investor(s) in any given situation may be:
•	a single private equity or venture capital institution;
•	a syndicate of equity providers;
•	mezzanine funds – where the risk/return sought is pitched between equity and debt;
•	debt providers, whether the debt is to be secured primarily on the cash flow of the business or on its property and current assets; or
•	institutional funds that require the company’s shares to be traded on one of the London markets.

Keeping in contact with providers of equity and debt finance is a key priority for Corbett Keeling. The firm devotes considerable resources to building and maintaining relationships with investors and has developed a proprietary database for keeping track of their investing preferences. Corbett Keeling also has a partnering relationship with ...unquote”, a leading trade journal in the private equity and venture capital market, which publishes statistics on investments made in the United Kingdom. As a result, Corbett Keeling can readily identify and secure appropriate funds for its clients.

Negotiating, managing and closing the deal

Having prepared the case, decided on the investor type and made introductions to selected investors, Corbett Keeling helps its client choose and negotiate with one or more preferred sources of funds. It has an in-depth understanding of funding structures and advises its clients on the most appropriate split of debt and equity and the returns that each source of funds will expect. It also co-ordinates the other professional advisers – tax, legal, due diligence – required for the transaction. Corbett Keeling is its client’s key sounding board and source of advice right up to completion of the transaction and transfer of funds.