FC and its predecessor firms have had years of experience of raising finance to help our clients fund business development, acquisitions, buyouts and shareholder reorganisations. We have a particular specialisation in private equity (ie institutional venture capital) and structured bank finance, and are well known to major corporate banks and venture capitalists both regionally and in London.

Raising finance for your business can be a complex and frustrating process. The UK now has a highly-developed venture capital industry and there is a large number of institutions, each of which has its own preferred size and type of deal and its own target sectors. Funders look at lots of proposals in the knowledge that they will only pursue a very small percentage of them. Despite its association with entrepreneurialism, the venture capital market is in reality highly cautious. Institutions will reject a proposal outright if they have any doubts at all that it will generate attractive returns. Once an institution declines a proposal there is almost always no way back. You need to get it right first time.

In recent years, venture capital funds have focussed increasingly on pursuing larger deals, and the process by which they invest has become more and more complex. At FC we have responded to this by developing a specialisation in funding deals where possible without institutional equity. We are highly skilled at analysing the cash generation potential of businesses and designing (where appropriate and prudent) funding structures incorporating enhanced levels of debt, vendor equity or capital introduced by private individuals. We know where to look to find funders who understand how to do these deals.

Preparation is key to successful fundraising. Before we approach any funders we:

• Consider the proposed transaction in detail, review the client’s objectives in undertaking the transaction and the possible alternative ways of achieving these objectives.
• Work with our client to develop and refine a detailed financial projection and business plan.
• Design an outline funding structure that will be sufficiently robust to meet the financing requirement and provide an acceptable margin of comfort while minimising cost in terms of debt servicing and equity dilution.
• Anticipate the funders’ due diligence questions and ensure that these have been adequately addressed in the business plan and the supporting documentation.
• Help our client to address any “grooming” issues, eg gaps in the management team or weak accounting and administration.
• Prepare a marketing document which summarises the opportunity and which contains all the information prospective funders will require to establish interest in principle without going into excessive detail. Information is presented positively and logically using a methodology we have developed and refined through constant dialogue with venture capitalists, banks and private investors.

Institutional funders and banks often portray themselves as business partners who have a community of interest with their investees. In reality, like any other commercial organisations, they will usually seek to maximise pricing and profit margins. The investee will be required to enter into highly detailed legal documentation which creates a complex structure that is difficult to understand without specialist knowledge. The result can often be one-sided and onerous.

FC project-manages the fundraising process and leads the negotiations with funders.

We market the proposal to a target list of funders prepared using our knowledge of their investment preferences, current deal appetite and credibility.

• Ideally, we will elicit several offers of funding.
• We always work to improve the offers, if we can. We maintain an up-to-date knowledge of deal pricing, and our access to regular deal flow gives us an enhanced negotiating position with funders.
• We help our client evaluate competing offers and select the best one. This is not necessarily the cheapest.
• Every word and number in every document is negotiated with our involvement.
• We drive the timetable.
• We co-ordinate the due diligence process, help to ensure that questions are dealt with quickly and that any problems arising do not escalate out of proportion. This includes detailed sensitivity analysis and modelling of complex working capital covenants.

Our key objective in a fundraising assignment is to add value by negotiating a significantly better deal than the client could on its own.