Whether you’re a growing technology startup, a mid-size manufacturing firm, or a mature business reinvesting capital from an earlier exit, investment banking can help you fund your growth. These services are designed for businesses that need capital for everything from initial start-ups to secondary equity offerings.
After all, these companies want to keep their businesses profitable and growing, so they turn to financial services firms to help them manage their money efficiently. However, not all investment banks are the same when it comes to the services they offer. This article will give you an introduction to the world of investment banking and discuss why it could be a good fit for your company’s needs.
Equity Financing for Growth
Equity is the most common way of financing growth. Equity financing is generally provided by venture capital firms and/or private equity firms. In return for their investment, these firms will receive a portion of your company’s ownership. To determine the right amount of equity financing for your business, you’ll need to list out the cost of your expansion, including any new hires, equipment, or new locations.
You should also list out all expected revenue, including both new and existing customers. Using this information, you can determine how much financing will be necessary to meet your goals. When you decide on percentage ownership for the firm, you’ll need to decide if it’s enough to make the business profitable.
Debt Financing for Growth
Debt financing is generally provided by financial institutions such as commercial banks and venture debt funds. In return for loaning you money, these firms will receive regular payments over a set period with interest. The amount you should borrow depends on the nature of your expansion and the revenue you expect to generate from new projects.
Debt financing is often used to fund purchases of fixed assets, including computers and office buildings. Unlike equity financing, debt financing is not a percentage of ownership. Instead, debt financing is a fixed amount that may need to be repaid in a short time. The amount you borrow will depend on your cash flow and ability to repay the amount over a set time. Be sure to consider all possible scenarios before borrowing money from a financial institution.
M& Services for Growth
M& services are typically provided by M& advisory firms. These firms help you decide when to buy another company and how to do so. You’ll need to decide if the acquisition is the right path for your business. If you decide to pursue an acquisition, you’ll need to find a company that both meets your needs and is willing to be acquired.
At that point, you’ll need to hire an M& advisory firm to help you find the right company. These firms will help you negotiate with potential sellers and even assist with financing your acquisition. If you decide to sell your business, you may be able to hire the same firm for an M& advisory. Before hiring an M& advisory firm, be sure to read through company reviews and references to find the best firm for your needs.
Summary
As your company grows, you may need outside financing to meet your goals. Equity financing is generally provided by venture capital firms and/or private equity firms. Debt financing is often provided by commercial banks and venture debt funds. M& services are typically provided by M& advisory firms.