Raising capital is a critical step for startups and scaleups, and a fractional CFO can be an invaluable asset during the process. Businesses aiming to scale their operations and accelerate growth should consider a fractional CFO, who can provide the expertise and network necessary to navigate the complex process effectively.
Here are our top 8 key focus areas when raising capital, and remember we are available to help at any stage of your journey!
1. Determine financial needs
The exact amount of funding your business requires and the purposes it will be used for, need to be put under a microscope. A fractional CFO will develop a detailed financial model incorporating your profit and loss, cash flow and balance sheet projections to reflect your financial needs and appeal to potential investors.
2. Establish valuation
Before approaching potential investors, you must establish the valuation of your business, and decide how much equity you are prepared to offer. The understanding of worth, and how it compares to market standards is a service a fractional CFO can provide, backed up with a wealth of knowledge. Insights into valuation methods suitable for your industry and helping you set a realistic and attractive equity offer for investors also means you will achieve the valuation you need.
3. Integrate systems
A fractional CFO will ensure your business maintains updated records which accurately reflect customer orders and payments by integrating your accounting, CRM and ERP systems. They’ll also provide actionable insights about the integration, guaranteeing the reliability of your financial data.
4. Explore funding sources and build investor networks
Leverage the extensive network of a fractional CFO – which can include venture capitalists and angel investors – and identify appropriate funding sources which will align your funding needs with suitable sources. And while you’re at it, utilise our networking and relationship-building strategies to connect with potential investors. Win-win!
5. Craft a pitch deck
By creating a pitch deck that effectively communicates the value of your business to potential investors, a fractional CFO will help hone your presentation to be clear, engaging, and professional with a fresh pair of eyes.
6. Negotiate investment terms
With an abundance of experience, a fractional CFO will carefully negotiate terms of investment with interested parties, and navigate these discussions to make sure the investment terms align with your long-term business objectives.
7. Set up a data room
Prepare for the due diligence process by setting up a data room containing all critical documents related to employment, legal matters, intellectual property and proprietary technology. Potential investors can then access and review all necessary documentation, and the fractional CFO will confirm that all relevant information is comprehensive and well-presented.
8. Manage capital and maintain investor relations
Take advice on managing capital you have already secured, and keep a transparent line of communication with your investors so that funds are allocated and utilised effectively while also providing ongoing financial reporting.
What’s next?
A fractional CFO from Standard Ledger brings expert financial and strategic guidance throughout the fundraising process, and will significantly boost your prospects of securing capital and achieving sustained growth. Sound good? Don’t wait any longer, we’d love to chat!
No matter what stage you are at on the journey from startup to scaleup – we can help, and we know what you are going through. Get in touch for a consultation and start focusing on what you love to do, we can take care of the rest.
BOOK A CALL with us for a chat, and get your business ready for the next stage of growth.
