Capital raising
Raising Growth Capital for Your Business
Debt and equity for owners who want to grow, buy, or take some money off the table without selling the whole company.
When owners raise capital
Owners raise capital for a handful of reasons: to fund growth the company cannot pay for out of cash flow, to buy a competitor, to buy out a partner or a family member, or to take some money off the table while keeping control.
A raise is different from a sale. The owner usually stays in charge and keeps most or all of the equity, and gives up something else instead: interest and covenants on debt, or a share of ownership and some say in major decisions on equity. The right mix depends on what the money is for and how much the owner wants to keep.
Most owners only know their own bank. We take the company to a targeted group of lenders and investors at once, so the terms are set by competition rather than by the first offer.
The options in plain terms
Each kind of capital costs the owner something different.
| The option | How it works | What it costs | What you keep |
|---|---|---|---|
| Senior debt | A bank or credit fund loan secured by the company's assets and cash flow. | It is the least expensive capital, but it comes with covenants and a repayment schedule. | The owner keeps all the equity. |
| Mezzanine financing | Junior debt that sits behind the senior loan. | It costs more and may carry a small equity piece. | It stretches how much a company can borrow without selling ownership. |
| Minority equity | An investor buys a minority stake. | A partner with capital, usually with a board seat and a vote on major decisions. | The owner keeps control. |
| Majority recapitalization | A private equity firm buys a majority stake. | A majority stake, with a partner who plans to sell again later. | The owner takes cash out, rolls the rest into the new company, and keeps running it. |
What lenders and investors check
They ask the same questions a buyer would, in less depth.
Cash flow history
Several years of financials, adjusted for owner expenses and one-time items, and how steady the earnings have been through good years and bad.
Customer mix
How much of the revenue comes from the largest customers, how long they have stayed, and what contracts back them.
Management depth
Whether the company runs without the owner in every decision, and who would run it if the owner stepped back.
The plan for the money
What the capital pays for, what it should produce, and how the company repays debt or gives an investor a way out later.
How a raise runs
Most raises take a few months from the first meeting to funding. Debt usually moves faster than equity.
Define the need
How much, for what, and which kinds of capital fit. Sometimes the answer is a smaller raise, or a different structure.
Prepare the materials
Recast financials, a projection, and a memorandum that explains the business and the use of the money.
Go to the market
Confidential outreach to a targeted group of banks, credit funds, mezzanine lenders, or equity investors.
Compare term sheets
We lay the offers side by side: cost, covenants, control rights, and what happens if the plan runs late.
Diligence and closing
We manage the lender or investor diligence and work with your attorney through the loan or purchase documents.
Who it fits
Profitable private companies with a specific use for the money and an owner who wants to stay involved. Many are founder-owned or family-owned businesses in industrial and blue-collar fields.
If the right answer turns out to be a full sale, we will say so, and the same bankers can run that process instead.
Industries we serve
Lenders and investors read each industry differently. Each page covers what they look for.
Aggregates & Quarries
Sell-side M&A advisory for owners of crushed stone quarries, sand and gravel pits, and construction aggregates operations.
Aggregates & Quarries M&A
Steel Fabrication & Erection
Sell-side M&A advisory for owners of structural steel fabricators, miscellaneous metals shops, steel erectors, and bridge fabricators.
Steel Fabrication & Erection M&A
Paving & Asphalt
Sell-side M&A advisory for owners of asphalt paving contractors, hot mix asphalt plants, and highway and street construction companies.
Paving & Asphalt M&A
Construction
Sell-side M&A advisory for owners of general contracting, heavy civil, and specialty trade contracting companies.
Construction M&A
Oilfield Services
Sell-side M&A advisory for owners of oilfield services and energy services companies, including well services, water, rental tools, and production services.
Oilfield Services M&A
Manufacturing
Sell-side M&A advisory for owners of manufacturing companies, including machine shops, metal fabrication, machinery, and other industrial producers.
Manufacturing M&A
Reading on raising capital
- How middle market companies fund expansion
Growth capital options and when each fits.
- Debt or equity
Choosing the right funding strategy.
- What a recapitalization is
And whether it fits your company.
- Private equity recapitalization
How a majority recap works for the owner.
- Mezzanine financing explained
How junior debt works and what it costs.
- Rollover equity
What an owner keeps after a recap or a sale.
Questions owners ask about raising capital
When does raising capital make more sense than selling?
When the owner wants to stay in charge and the company has a clear use for the money, such as growth, an acquisition, or buying out a partner. Except in a majority recapitalization, a raise keeps most or all of the ownership with the owner. A sale makes more sense when the owner wants to step away or wants most of the value in cash now.
Debt or equity: how do I choose?
Debt costs less and leaves ownership alone, but it has to be repaid on a schedule and comes with covenants. Equity does not have to be repaid, but the owner gives up a share of the company and some control. Many raises use as much debt as the cash flow can comfortably carry and equity for the rest.
Will I keep control of my company?
With senior debt, mezzanine, or a minority investment, the owner usually keeps control, though lenders set covenants and minority investors typically get a board seat and a vote on major decisions. In a majority recapitalization the investor takes control, and the owner usually stays on to run the company with a remaining stake.
What is a recapitalization?
A recapitalization changes the mix of debt and equity in a company. In the common private equity version, an investor buys a majority stake, the owner takes cash out, and the owner rolls part of the proceeds into the new company. The owner keeps a stake and can share in a later sale.
How long does a capital raise take?
Most raises take a few months from the first meeting to funding. Senior debt usually moves fastest. Mezzanine and equity take longer, because the investor does more diligence and negotiates ownership terms. A company with clean, recast financials and a clear plan for the money moves faster at every stage.