When should you contact new investors/lenders for your company?

The short answer is before you need it.

Conventional Wisdom

  1. “you should be fundraising or not fundraising”

Fundraising is a time consuming and distracting process. It is critical to be fully prepared, and there is nothing worse than a stale deal.

However, getting new investors/lenders comfortable takes longer than you think.

  1. “be wary of taking too much capital, too soon”

Of course, you want to limit over-dilution and/or over-leverage.

Yet, capital is a main driver of success and failure for many companies and you need to be prepared to get to market quickly.

  1. “focus your investor/lender audience on a few good targets”

By doing appropriate research you can in fact filter the number of prospective investors/lenders, and really focus your efforts.

In reality, capital raising is a numbers game. You need to go out broadly to qualified investors to increase your odds and receive best terms.

90/10 Paradox

For 10% of companies, raising capital when needed is relatively easy. For the remaining 90%, raising capital is a much slower, relationship-building exercise.

Paradoxically, 90% of companies believe they are in the 10% category.

Short Answer – “contact new investors/lenders before you need it”

By laying the foundation for investment in advance, you will be best prepared to raise capital (on your terms).

Owners/CEOs/CFOs should plan accordingly for their next capital raise. The first step is to identify and reach out to at least 30 new investors/lenders, well before your capital raise commences.

Good investors and lenders are almost always willing to take an early meeting or a call to discuss your business.

By building these relationships, you avoid a cold start and more importantly can shape your business and set milestones with an informed perspective.

How to find new investors/lenders?

Try CPGOapp.com (first 10 matches are free) – it matches investors/lenders for your early stage to middle market company using granular investment criteria and precise matching technology.

With automated emailing and contact info (email, Linkedin, website, phone, address, portfolio info, AUM, etc.) for 64,500 investors/lenders, you can connect easily and be prepared for future and current capital raises.

CPGOapp and CPGO Network are provided by Castle Placement –  the premier private capital investment bank.

#CEO #CFO #capitalraising #privateequity #venturefunding #privatelending


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Thanks, Ken

Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784