Q.1 What is the typical length of a capital raise?
A. The length of any given capital raise is driven by many variables but generally speaking, most capital raises run 90 days. The biggest determinant of how long a capital raise will take depends on the time it takes to gather all the necessary due diligence information to get a company market ready (read our blog here), prepare an investor presentation or CIM (read our blog here) &/or a financial model.
Q.2 How much will it cost to raise capital?
A. At Kaeros, we charge a monthly retainer of $7,500 per month for a standard 90-day capital raise period. In addition, we charge a structuring fee to negotiate terms with various lenders or investors. This fee can range from 3.0% to 5.0% based on the type of capital raised.
Q.3 How do I know if my company is ready to raise capital?
A. Determining whether you are market ready (read our blog here) is the first step in determining your company’s preparedness to raise capital.
A few simple questions to make this determination are: 1) does your company have all its financial statements up-to-date and are they prepared by a reputable external accountant, 2) can your company produce interim financials (both year-to-date and trailing twelve month or TTM) from its accounting software, 3) can your company articulate both how it generates revenue as well as what the key risks are of the business. And finally 4, does your company have a financial forecast or business plan that spells out where the company is going and what capital is needed to get there.
Q.4 Can I look for capital from my own sources while Kaeros runs a capital raise process?
A. Generally speaking, no. At Kaeros, we prefer to run a capital raise on an exclusive basis only. This is important to align interests, and to ensure we’re doing all we can to find your company the capital you are seeking. If there are investors or lenders you’d like us to speak with while running our capital raise process, we’re happy to do so.
Q.5 How does Kaeros differ from other larger advisory firms and investment banks that raise capital for Canadian companies?
A. Kaeros Capital is a boutique firm which means we only take on a select number of clients every year where we think we can add great value. This means we provide ongoing customer support, advice and communication throughout the capital raise process. In fact, many of our clients remain customers following a successful capital raise as we assist them with a follow-on raise &/or advise them on other parts of their business.
Q.6 What is Kaeros's process to complete a capital raise?
A. The Kaeros Process (read about it here) is a 6-step process that guides how we seek capital on our client’s behalf. We have created this process so that our client’s know what to expect during their capital raise journey and can follow the progress.
Q.7 How much time will the company have to invest in a capital raise?
A. As noted in Q.6, the Kaeros Process includes 6 steps to complete a capital raise.
Stages 1 through 3 includes meeting and signing up a new client, followed by the collection of due diligence information. These first 3 stages typically run for about 30 days. During this time, Kaeros team members will have ongoing meetings and communication with management and their finance team to gather information, ask questions and begin putting together an investor presentation.
Stages 4 through 6 involves Kaeros marketing your capital raise to various interested investors/lenders and typically runs for about 60 days. During this process, the company’s involvement is much lower as we work to provide information to interested parties, answer questions and ultimately collect offers of financing.