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Stage 2

TAKING THE MID-MARKETS TO THE NEXT STAGE

CAPITAL RAISE | M&A | TRANSACTIONS

WHAT SHOULD I KNOW ABOUT RAISING CAPITAL AND M&A THE 2ND STAGE?

In the growth and expansion stage of the business, revenue is increasing as well as the customer base. Many new opportunities will arise, but with opportunities come challenges such as facing the competitors in your market and industry. 

This stage will require better business practices along with automation and outsourcing to improve productivity. The company will evolve into manageable but not explosive growth, strong profits, and a more routine business life.

Where Do I Fit in This Stage?

A period of growth into new markets and distribution channels will evolve into manageable but not explosive growth, strong profits, and a more routine business life. 

High-Growth Enterprise  
Small Enterprise (SME) 


Annual Revenue:
$1M – $5M
Company Valuation:
$10M – $30M
Funding Stage:
Series A
Funding Amount:
$2M – $10M

2- GROWTH

Mid-Market

Mid-Market Enterprise  
Medium Enterprise (SME) 


Annual Revenue:
$5M – $10M
Company Valuation:
$30M – $60M
Funding Stage:
Series B, C, D & Beyond
Funding Amount:
$10M – $100M

HOW DO I RAISE CAPITAL?

A business owner might look at different fundraising methods to service different capital needs, based on which stage they are and how much is available to them in that stage. We have listed the sources of capital and the primary types or methods of raising capital below.

Funding Sources


 

Mid-Stage VC
Late-Stage VC
Investment Bank
PE Firm
Blind Pool
Larger Competitor

Funding Types


 

Series Investment
SBA Loan
Working Capital
Short Term Business Loan
Bridge Loan
Debt Financing
Growth Equity
Down Round

HOW CAN WE HELP YOU RAISE CAPITAL?

We suggest working with an experienced outsourced finance & accounting firm, like NOW CFO, well before your company is in the due diligence phase of an important transaction. We have broken down the steps to raising capital, and the financial document checklists you will need along the way. We would be happy to help you you.

1. DISCOVERY

Tell us all about your business

2. ROADMAP

Develop your capital raise roadmap from Series A to IPO

Capital Raise Roadmap (next 2-5 yr.)

3. INVESTOR LIST

We build an investor list of financial sponsors who you will match with
Investor List (30-40)

4. FINANCIALS

We help you prepare the documents you will need to pitch to investors
  • Pitch deck (10-12 slides) 
  • Product Development Roadmap (next 5 yrs.) (if applicable) 
  • Business Valuation 
  • Financial Projections (next 5 yrs.)
    • Income Statement 
    • Cash Balance 
  • Financial Statements (last 3 yrs.)
    • Balance Sheet  
    • Income Statement  
    • Cash Flow Statement  
    • Signed/dated by independent auditor 
  • Financial Models (current/previous yr)
    • Cost To Acquire Customer (CAC)  
    • Customer Lifetime Value (LTV)  
    • Customer Churn Rate  

5. PITCH

We will have your back with everything the investors will be looking for
  • Virtual Data Room (VDR): 
    • A data room is a cloud based storage service (i.e. DropBox, GoogleDrive, Box) providing an easy, secure way to store, share, and control access to your materials and is expected by most investors as due diligence. We recommend organizing your virtual data room into the following folders: 
  • Business & Operational 
    • Pitch deck  / Transaction Proposal 
    • Product Development Roadmap (next 5 yrs.)   
    • Marketing Roadmap/Strategy (next 3 yrs.) 
    • Demos  
    • Operational Dashboards  
    • Customer pipeline (current period)  
    • Bookings History / Projections (last 3 yrs. / next 3 yrs.) 
  • Legal 
    • Articles of Incorporation  
    • Corporate Bylaws  
    • Past Investment docs  
    • Operating Agreement / Statements of Operations  
    • Stock Purchase Agreements (with current investors)  
    • Statements of Stockholders’ Equity 
  • Capitalization   
    • Cap table (fully converted/diluted basis)  
    • Term sheets (current/past rounds) 
  • Financial  
    • Financial Statements (last 3 yrs.)  
    • Financial Projections (next 3 yrs.)  
    • Financial Models (current/previous yr.)  
    • Financial Liabilities, Loans or Encumbrances (current period)  
    • Statements of Comprehensive Loss (last 3 yrs.) 
  • Agreements & Contracts  
    • Buy-sell agreements between founders  
    • Intellectual Property documents (Trademark License, Proof of Patent, Copyright Ownership)  
    • Leases – purchase, lease or sublease of real property (current period)  
    • Subscription Agreements (current period)  
    • Contracts &Invoices for Top 10 Clients (current period)   
    • Contracts & Invoices for any Churned (material only) Clients (last 6 months)  
    • Material Contracts in excess of $20,000 (current period) 
  • Organization & Hiring  
    • Org Chart  
    • Team Bios  
    • Hiring Roadmap (next 3 yrs.)  

6. DUE DILIGENCE

We will make sure you are prepared and look like a million bucks, literally
  • Term Sheet 
    • Investment Amount 
    • Post-money Equity Allocation 
    • Valuation 
    • Liquidation Preference 
    • Anti-dilution 
  • Investors Rights Agreement  
    • Investor Rights Agreement 
    • Right of First Refusal 
    • Participation Rights 
    • Corporate Governance 
    • Information Rights 
  • Stock Purchase Agreement  
    • Share price   
    • Number of shares 
    • Dispute resolution provisions   
    • Agreement on compensation for unforeseen costs related to fundraising 
    • Regulations & Outcomes regarding transfer of shares 
    • Representation & Warranties  

7. FUNDING

Success! We are with you all the way to the end, and are already looking ahead to post-funding & investor reports
  • Use of Proceeds  (6 month/12 month/24 month) 
  • Burn Rate Analysis (6 month/12 month/24 month) 
  • Waterfall Chart / Waterfall Analysis 
  • Investor Reports

Why should I work with NOW CFO?

Our biggest value proposition looking at a company from the bottom up, not the top down. We show reporting on the entire lifecycle of your customers journey, starting from where your users are coming from to becoming a lifelong customer. 

What is different about NOW CFO?

Our consultant’s transaction services provide a unique, seamless follow-through from strategy to execution of your deal. Their tailored approach begins with listening and understanding your needs to provide you with the right balance of functional, regional and industry expertise and resources on each of your deals to ensure the quality and scope of deliverables are appropriate for your needs.

Gain Financial Visibility Into Your Business

Start Your Journey Today

Funding Stages
1 - Launch
3 - Maturity
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