Raising Capital Efficiently

Once a fund decides to give you cash you need to do what they say, when they say to do it and how they say to do it.

Read on for some short tips to get the cash you need as soon as possible. Institutional investors like me have made the procedures straightforward for you to get your money efficiently and rapidly.

However, the process can only be as fast as you are in completing your documents.

You should be aware that any delay in completing and returning the necessary documentation will delay the completion process, by the same period as the delay.

Institutional investors find it very irksome when you cause a delay in the documentation procedures and then you expect them to move heaven and earth because you are short of cash.

Like my friend Inspector (rtd) Bill Majcher who used to be the head of the criminal enforcement division of the stock exchange and now is the head of the Baron Group always says "a lack of preparation or planning on your part does not a constitute an emergency on mine"!

Most institutional investment procedures are similar so read closely and learn how to raise capital rapidly:

1. You submit your written application for funding to their investment committee. Do it in great detail and don't be late.

2. They send you an outlook meeting request for a videoconference with their investment committee. They review your capital funding requirements with you to find the best possible solution for your needs.

3. Next you get a letter to discuss in general what they are willing to do for you.

4. You need to initial and return the draft term sheet to them as soon as possible

5. Next they send you formal due diligence documents for you to sign. Sign them and return them.

6. They then forward your signed term sheet and formal due diligence documentation to their lawyers who can complete the full legal documentation in 5 business days and forward for execution.

7. One thing to make the process go smoothly is to make sure you have an excellent securities attorney review your documentation. Sometimes the subscription agreements are over 100 pages long and full of very arcane legal securities jargon. Make sure your lawyer is a specialist in this area.

Otherwise you end up paying them to learn from their mistakes. Sometimes a fixed price is the way to go here. Sometimes when people get paid the hour to do stuff they try to think up things to find to justify their fees.

8. Even better, if you want it to go very smooth sometimes the institutional investor can recommend to you a panel of lawyers who have represented investee companies in the past who already know the drill.

9. Next step is you make an announcement and get your cash and start to get about the business of making money for your shareholders.

10. It is possible that all these steps can complete in 30 days, provided there is no delay in execution and delivery of the paperwork on your end.