The Handbook of Financing Growth: Strategies, Capital Structure, and M&A Transactions, Second Edition

CHAPTER 1

Introduction

For emphasis, we want to point out that there is no silver bullet in funding a company. As much as we would like you to believe that every fund-raising follows the same consistent process, it is just not true. However, what we will do is provide a view that is fairly representative of the key steps that need to be considered and how to navigate the process. In practice you will find that some steps are conducted concurrently with others, and some steps are conducted rather informally. What we have attempted to do is explicitly show the key steps and provide guidance for each.

With that said, Figure 1.1 provides an overview of the financing process (we call it the Growth Capital Navigator^TMc; more information available at www.GrowthCapitalNavigator.com) from the perspective of the issuer and is comprehensive in that it indicates the steps for raising equity; debt placement will be a subset of this process depending on the transaction type. In many instances you will see the word investor used interchangeably for either an actual investor or a lender; the line of distinction blurs depending on the characteristics of the deal. We have chosen to segment the process into the following categories for discussion. You’ll note that this is also the organization of Part One of this handbook.

• Planning and alignment—this includes valuation.

• Acquisitions, recapitalizations, and exits acquisitions.

• Capital structure.

• Sources of capital.

• Equity and debt financings. ...