Equity Funding
What is it?
- A type of funding that gives acquirers shares of stock in exchange for cash. This type of funding would provide lenders a minority stake in the company (49% or less).
- Equity funding can be in the form of preferred equity, common equity, or structured equity.
- This type of funding is typically used for growth capital.
What to expect?
- Companies seeking an equity financing should be able to provide the necessary documents that the acquirers would need to assess the value of the company.
- Depending on the type of equity agreed upon, acquirers may have equity participation provisions and they may have voting rights especially during extraordinary events.
- The sale process would approximately last between 6-8 months on most cases and would include an extensive due diligence (financial, legal, technical, commercial, and tax) by the buyer.
Who should consider
- Companies who seek to benefit from having a relationship or affiliation with a strategic or financial investor who may be a larger player in the same industry and willing to give a minority stake to them.
- Companies who seek to obtain a strategic/financial advantage through a collaborative agreement, with an investor, for growth capital.
- Companies who are looking to offload some of their existing debt obligations.
How Can Bayfront Help
Strategy Review
Detailed analysis of the Client and advise on value-adding corporate strategies.
Competitive Benchmarking
Detailed analysis of the Client and benchmark them against Industry standards.
Structuring
Detailed analysis of the Client’s capital structure and advise on the optimal proportion of equity and debt.
Deal Execution Management
Assisting in execution of deal processes, most commonly in the form of capital raising.
Valuation
Helping to navigate through the complexities of transaction, improve transaction execution, and increase the chance of success.
Information Memorandum
For presenting to different target audience such as lenders, new sales relationships, new client relationships.
Governance Review
To determine the specific governance needs of a company and assist in areas which would minimize risks and help achieve business goals.