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Growing businesses often requires significant investment to cover all requirements before expanded operations will return growing profits. There are number of ways to bring capital to business:

  • Friends and family – leveraging on your personal relationships, this is the easiest way to raise capital, but may be limited in its capacity. To avoid misunderstandings, it’s best to give them the same information as to other groups, with complex explanation of risks and what will they get for their investment. Selling shares to friends and family is dealing with a financial product.
  • Business loans – banks are the most common way to obtain finance. Banks want to see that you’ll have the capacity to repay the loan, so security and strong application increase your chance of success. Usually, equipment / vehicles finance is easier to obtain than unsecured overdraft or investment loan.
  • Private equity and private placements – selling shares in your business will attract investors willing to participate in the risk and profits from your business going forward. You can aim at passive capital only, or active investors who will get involved and help you grow. As shares in your business are regarded as a financial product, you must be aware of restrictions. Costs may be higher than loans, and would usually include preparation of the offer, valuation, business plan and audits. Usually, this form can only be addressed to wholesale investors.
  • Crowd Funding – selling your stock to public through a broker, up to certain limits. May attract keen small investors that will not be attempting to influence your business decisions.
  • Public Offerings, including Initial Public Offering (IPO) – this is a process where your business is sold to the public and shares become listed on a stock exchange, such as Australian Stock Exchange, Sydney Stock Exchange, or National Stock Exchange. This is a lengthy process that usually involves legal team, corporate advisors, auditors, and brokers in preparation of prospectus, advertising the shares and finalising the float.

Bank lending can be a burden on company’s financial prosperity, while selling stake in your business too early means you sell at a cheap price. There is not a single path to success and BTMH can help you design your path that will include mix of these methods that will lead to best possible outcome and help you on your journey to success.

BTMH also partners with Pulse Markets Pty Ltd (AFSL 220383) to assist with raising private equity.

Contact us to discuss your capital raising needs.