How very new businesses can find corporate financing. This commentary can provide the means to procure the outside capital your business concern is looking for.

Raising capital is one of the most essential -- and time consuming -- activities for a company to accomplish, either a start-up or a long-term, older business concern. Relatively new up-and-coming private companies, in particular, meet the toughest circumstances acquiring resources for capital formation.

The relatively young lifespan of the new startup company, plus its non-existent or very short performance history, conspires -- with the support of dreadful closed-loop logic -- to establish this unpalatable outcome: The young private company is constrained when it wants to develop new product lines, manage growth, and achieve market presence – to present a better track record – because it is undercapitalized and struggling for access to dependable ways to raise money, and it can’t procure access to credible sources of capitalization because of its tender age and skimpy track record!

The above paragraph leads us to ask the following question: What avenue should a company explore to wrangle free from those limitations, and acquire the capital that will allow the corporation to step into the next business level? The terrible funding quagmire previously mentioned in the first paragraph is not new to company directors and officers; all have been exposed, in one way or the other, to the capital-raising paradox and overcame its limitations to growth. Your new company can get the same results! Proceeding is a preliminary guide to help your company raise capital:

(a) Join discussion groups, become a member of industry associations pertinent to your business, business tutoring entrepreneurial chapters, retired executive workshops, business incubators, business focus groups, and business counseling gatherings.

One of the best solutions is to ask for advice and tutoring from the older, retired, and much more experienced company officers.

The above is such a golden opportunity, because these retired business executives have a wealth of experience to share with struggling entrepreneurs; "they’ve been there, done that!" Yet and still, though these experienced executives are no longer involved with the management of their companies, they still miss the business life, and in a vicarious fashion, they get to relive their salad days, and that is why they are eager to help, and like to keep a "finger in the pot."

(b) I bet you were thinking about a business plan, weren't you? You need to prepare a well-crafted business plan, since it is one of the most important tools employed to raise capital. Few things are more essential for your company’s capital formation than offering a savvy business plan. It should convey your company's strategic business vision, your corporate growth initiatives, and your general business wherewithal.

Yet and still, the most vital and significant feature of any business plan is to explain to the intended recipient – the capital funding source that may act upon it – how your corporation plan's to use the capital. What are the steps your business enterprise is going to put in place to use the newly-acquired capital? Remember to review and revise your company’s business plan as the need arises; it should reflect any new business opportunities, and pertinent information about the market outlook of your company.

Let me repeat this again:
It should come as no surprise that a competent and resourcefully produced business plan will make it so much easier for your company to raise capital.

(c) Inspect the corporate financial sources you intend to approach. The proposed targets of your drive to get investment capital, such as: venture capitalist (VC), angel investors, securities broker/dealers, investment advisor firms (IA), sophisticated investors, accredited investors, and investment banks, should receive at least a preliminary inspection. The essence of the deal is to find out if they have made a specialty of serving your particular industry. Make a point to investigate their most recent capital funding activity to see if they have extended capital to comparable businesses in your segment of the market. There is more than just a passing chance they would be amenable to help your company raise capital, as well.

(d) Further venues to investigate, while your enterprise is occupied searching for capital sourcing, is professional verification of your corporate structure, manufacturing processes, marketing and feasibility studies. Bleeding-edge technology companies, as an example, may have innovations and products that are way ahead of current systems.

Since nobody has ever seen – or conceived of the idea – there could be varying degrees of hesitation encountered from the managers at funding sources, investor groups, and investment banks. Validation of your company and product can go a long way to present your business and goods to groups and individuals that could hold your company’s future in their hands: your future capital sourcing partners!

(e) Although this is mentioned last, it will serve to give life and action to everything we've discussed so far; the magic bullet that will help your corporation to raise capital, and take the next step, is this: don’t "throw in the towel" and walk away! When a course of action proves to be a dead end, don’t dwell upon it and move on to the next one, since it could lead to this: a receptive and open mind that will be influential in assisting your company in raising capital.

(f) Each capital source should call for your earnest contemplation before you go on to the next deal. If you keep to this general guide, your corporation will hit the ground running and step up to the next level in its corporate development through the art of raising capital.

Author's Bio: 

Frank A. Roberson is a mergers and acquisition writer (M&A,) with many years of experience assisting corporations to find the investment capital they need for company growth and development. To learn more about raising capital, and to peruse more of Mr. Roberson’s writings to see how your business can take the next step in its development.