Capital Raising can be a lengthy, expensive and inefficient process, for both the companies seeking money, and for investors seeking investment. For companies in their growth phase, it can lead to frustration, and divert attention from the business and operational necessities. On the other hand, investors face their own challenges in finding attractive investments.
Our objective is to help our clients to achieve their Capital Raising goals in the most time and cost-effective manner, and to present investors with the most rewarding opportunities.
Why Crypstone Capital?
At Crypstone Capital we constantly engage with already successful, growing companies through our Capital Advisory Services, either directly, or through our global network of partners. This places us in a unique position to analyze, evaluate and subsequently shortlist only the best quality opportunities for our selected network of investment partners.
At the same time, our large pool of investment partners allows us to match each funding requirement with the appropriate investor, according to their preference of industry, the required investment size and geographic focus, which results in a much higher chance of achieving a successful investment.
The principals of Crypstone Capital provide effective “hands on” facilitation of the entire investment process to facilitate open and effective information exchange between the parties, and to ensure that both sides are able to achieve a mutually satisfactory investment arrangement. The objective is always to achieve a situation where the Investors and Investee Companies are able to become business partners that complement each other in a way that will allow them to take their combined business interests through to a successful exit or liquidity event.
Investee Companies face the challenge of competing with many other investment opportunities for the attention of suitable Investors, who have specific interest in their type of business. Our objective is to place investment opportunities with selected investors that are the most likely to be receptive, based on their investment preferences. We are able to offer access to a constantly growing network of active Investors (primarily in Asia-Pacific, increasingly also in Europe, US and the Middle East). Investors include High Net Worth and Ultra High Net Worth Private Equity Investors, Private Banking clients, Investor Groups, Private Equity firms, Venture Capitalists, Fund Managers, as well as Institutional and Strategic Investors.
Unlike most financial intermediary firms, the team at Crypstone Capital consists of true entrepreneurs, who have successfully built and sold their businesses and have extensive experience of Capital Raising from the entrepreneurs’ perspective. This experience allows us to genuinely understand the needs and requirements of Investee Company, and to speak the entrepreneur’s language in a way that focuses on the practical issues of achieving successful business funding, rather than confusing the situation with financial jargon.
We are your entrepreneurial partners for finding the right investors, and to look after your interests in all aspects of the deal process. Our specialty is our focus on Capital Raising for growth companies from our investor network, leveraging our wide network of partnering intermediaries, and effective investment deal facilitation!
Benefits of Using Crypstone for your Capital Raising Exercise:
Our private placement approach to Capital Raising provides a number of benefits, which are ideal for highly customized solutions that can be extremely flexible to meet your financing objectives. The private placement market is a very large, sophisticated market with a wide range of Investors, who are willing to structure unique funding arrangements that fit your specific business needs.
- High degree of flexibility in the quantum of Capital Raising (from smaller amounts up to >$100M), with equity and/or debt arrangements.
- Private Investors are typically more patient than Venture Capitalists, often seeking a 10 to 20% return on investments over a longer term of 5 to 10 years
- Much lower costs than approaching Venture Capitalists, or going public via the IPO process.
- Far more expedient process for raising money than with Venture Capital markets.
- Access to a broader spectrum of investors improves both the diversity of funding sources and the suitability of funding arrangements.
- Direct negotiation between Founder and Investor (facilitated by Crypstone Capital) permits highly tailored and flexible solutions that are mutually beneficial to both sides.
- Pre-agreed success fees for Capital Raising (typically cash, or a combination of cash and equity, or retainer plus success fee).
- Extensive Investor database and relationships through our network of business associates, alliances with other intermediary firms, as well as through previous transactions.
- Investment Facilitation – introducing businesses requiring funding to potential investors and assisting in all aspects of the investment process.
- Ability to raise capital at all levels
- Reasonable fee structure – Our Capital Raising services are carefully tailored to meet your exact requirements, and are typically based on a success fee approach.
Investors face real challenges in finding attractive and rewarding investment opportunities with companies that have strong potential for future growth and profitable exits.
Our objective is to present our investor network with pre- qualified, high-potential, quality investment opportunities to optimize the pre-investment due diligence process, and to increase the potential return on their investment. We work closely with our investors to fully understand their investment preferences and criteria, so that we are able to present only the opportunities that should be of specific interest to them
At Crypstone we draw on the extensive business experience of an international network of associates, most of whom have previously founded and developed their own businesses, or have managed and worked with early stage growth companies in various industries. Our entrepreneurial background enables us at an early stage to identify the potential challenges our clients might face, but at the same time to identify those businesses with strong growth potential, given the right level of funding.
The combination of extensive business experience and entrepreneurial enthusiasm for innovative companies, couple with a strong understanding of how Investors think, will bring you thoroughly pre-qualified and exciting opportunities for profitable investments.
Value Proposition to Investors
- Leveraging a wide network of international business contacts resulting in an extensive deal flow of investment opportunities
- Providing carefully screened, pre-qualified, quality investment opportunities to Investors
- Understanding of individual Investor focus, preferences and investment criteria
- Investment opportunities with early stage, as well as more developed growth businesses
- Highly attractive alternative investment opportunities other than property, stocks and mutual funds
Capital Raising Process
We help companies optimize capital structures, prepare investment proposition, building a capital raising syndicate, identifying and contacting investors and funders, organizing road show and execute transactions
Typical phases of the fund raising process are as follows:
Step 1: Studying the client’s business. In order for us to be able to help a client raise capital, we first need to analyze the client’s business. Only then can we identify how best to structure the fundraising. By understanding the client’s business, we are also in a position to take a large part of the burden from the senior management by handling the majority of the communication with potential sources of capital.
Step 2: Deciding on the Structure of Financing. The structure of the deal is a key factor in financing arrangements. The initial decision between equity or debt or mezzanine financing drives the rest of the process. An under-leveraged company will provide a lower return to its shareholders than one using proper debt levels, while over-leveraging a company puts it at risk of failing to meet its debt service payments. Our professionals are well experienced in advising clients on the best financing options.
Step 3: Identifying Financing Sources. As with the company sale process, we start by identifying possible sources of capital. However, unlike acquisitions and dispositions, where every deal has its own set of buyers, financing transactions involve dealing repeatedly with the same entities: individual investors, banks, mezzanine lenders, investment funds, and private equity investors. Finding the proper investor is the critical step in a financing transaction and it is therefore vital to know the players in the world of finance. Just as there are good and bad physicians, there are institutions with good reputations for closing transactions and others with reputations for not closing, which can be devastating in a financing. Our professionals know the landscape and steer our clients to the most appropriate capital providers.
Step 4: Preparing the Investment / Financing Memorandum. While identifying best financing sources, we prepare the investment / financing memorandum. The proposal for a financing will not be identical to the proposal that would be prepared for a sale of a company. Lenders care primarily about being repaid and minority equity investors about either the resale value or the dividend potential of the shares they will be buying. Our experience has proven that the work that goes into preparing the investment / financing memorandum pays off by helping the lending institution or equity provider get the deal through the approval process, thus greatly increasing the chances of a successful transaction.
Step 5: Due Diligence. From the client’s perspective, due diligence plays a lesser role in a financing deal; it is primarily the lender who does due diligence. As we indicated above, a professionally-prepared memorandum can significantly assist the institution in its due diligence. However, it is also crucial to be able to provide the counter party with appropriately-packaged information on a timely basis. We work with clients to prepare the bulk of due diligence materials in advance.
Step 6: Coordinating the closing. Even after an agreement on price and terms is reached, much work remains to complete a successful transaction. We maintain the momentum of the transaction as documentation is prepared by lawyer. Our experience enables us to ensure our client’s interests continue to be effectively represented in this final critical stage.
Timetable for Capital Raising
The length of the capital raising process varies greatly. It can take as little as a 3 months for the most straightforward transactions or more than 6 months for more complex deals.
> Frequently Asked Questions about Raising Investment Capital. click here