I’ve seen many growth companies setting a target amount for a capital raise, and being satisfied when they get close.
Meanwhile, Roshan Gummattira, Managing Director at investment banking firm GulfStar Group, and Mark Loeffler, Managing Director at VRA Partners, both mentioned seeing more capital available for good deals than there are good deals. It’s the old law of supply and demand. There is a lack of supply of good companies for all the demand from VC’s, PEG’s and FO’s (family offices).
Therefore, I suggest creating excess demand for your company by connecting to a multiple of your capital raise and let the capital compete for the limited supply of your company.
The following are ways to create excess demand. The list is not exhaustive, and obviously not detailed, but are areas to keep in mind as you connect with experts who can go more in-depth.
- How you build your company. Entrepreneurs with successful exits in Dallas have said that the right company built the right way will not have difficulty finding capital. Capital will find the company.
- How you build your pitch deck. It’s not about what you want to show; it’s about what the investor wants to see. Mentors, advisors and consultants experienced in raising capital and pitching companies can be helpful here. You get one chance to make a good first impression.
- How you tell your story. Here again, it’s not about what you want to say; it’s about what the investor wants to hear. And, here again, mentors, advisors and consultants can be valuable.
- How you connect to capital sources. Are you doing it on your own? Is someone representing you? Do you have a variety of contacts spreading the word? Are you just connecting in north Texas or nationwide?
The above items are for north Texas companies, and do not necessarily apply to other areas of the country. My team gets involved with the fourth item, so my preceding blog post here explained that in more detail.
In the meantime, feel free to share this information with entrepreneurs you know, or have them email me.
The complaint I hear most often from the north Texas startup community is the lack of capital, so The Davis/Yost Group at Morgan Stanley Private Wealth Management would like to fix it. If you have a real company with a proven, scalable model, you have no excuse.
By David A. Cary, Financial Advisor First Vice President Morgan Stanley Wealth Management 200 Crescent Court, Ste. 900 Dallas, TX 75201 (T) 214-661-7042 firstname.lastname@example.org.