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How VCA Can Help You Raise Growth Capital

Posted by VCA on Jul 18, 2017 2:32:07 PM

Need money to grow your company? At VCA, when engaging our clients in a capital raising process we consider the company’s business model and financial metrics in determining the strategy. We also factor in the financial goals of the management team.

  1. Business Model: Product companies and service companies.  

Product Companies

Service Companies

VCA’s media & technology clients with “products” have usually created:

  • A media platform that scales with traffic, viewers, and engagement; and/or
  • A software product that once built sells many seat licenses, or through a “software as a service” model.

Our clients with “service” models usually provide:

  • Marketing, advertising and business services; and/or
  • Information Technology (“IT”) services such as strategy, design and the development of software applications.

 

 

  1. Financial Metrics: Levels and trajectory of revenue.

 

$0 - $10 million

$10 million - $25 million

$25 million - $50 million

Most founding teams can get to $10 million in revenue by force of will, talent and relationships. Growth capital usually comes from family, or cash flow from operations

The path from $10 million to $25 million in revenue requires adding key skill sets, creating strategic partnerships, and potentially a capital infusion.

The path from $25 million to $50 million in revenue, will most often require growth capital to add professional resources & penetrate new markets.

 

  1. The Plan: After steps 1 & 2, we tailor your capital raising strategy around a few simple questions:

 

  1. What are the strengths and weaknesses of your current business model?
  2. What are the three key areas that will drive growth and profitability for the company?
  3. What are the strengths of the current management team, and what new strengths are needed?
  4. What sales channels must you access to scale revenue? What product/service attributes must you add?
  5. What personnel & platform resources are needed to scale?
  6. Buy or Build: What is the most efficient way to access the needed resources?
  7. Does management want liquidity in the capital raise (i.e. “to take money off the table”)?

To learn more about how VCA can help your company raise growth capital, please schedule a consultation with one of our transaction specialists. 

We look forward to hearing from you!

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Topics: Mergers and Acquisitions, Company Valuation, VCA