Capital Requirements: Can You Afford it?

Nobody likes to think they are unable to do something or that they cannot afford their dream project.

I am myself a real fan of a fair part of what I read in personal development where statements like “Everything is possible” or “You can become whoever You really want to be” are more than common: they are the very essence of this field and the moto of a booming and very profitable industry. selling methods, ways, roadmaps to Success, mainly in the financial aspect of it.

However, that reasoning does not work in financing and if anyone shows perseverance in it, they will lose a lot of money and time, success method or not!   

Fundraising costs money and time.

Nowadays, it takes significant money and time to raise funds or to obtain a financing.

Elaboration of Private Equity Disclosure 

For a private equity offering it takes around USD 250,000.- to conceive the support documents pertaining to a private equity securities offering from USD 500,000.- to USD 50,000,000.-, which are the following:

 

  1. the business plan including the business and revenue models;
  2. the disclosure documentation generally a private equity offering memorandum.
  3. the short summary, a two pager.
  4. the executive summary
  5. the Investor Slide Presentation or ideally
    the investorVideo
  6. the Corporate Video
  7. the Financial Model including assumptions, budget
  8. the Audited Financial Statements and
    the Auditor’s notes  
  9. the website
  10. the Data Room
 
This indicative budget does not include the price of any intellectual property, expertise or independent opinion needed to convince investors.
  

More importantly it does not include the costs of distribution of the securties offering.  

Distribution of Private Equity Offering

the costs of distribution of the Private Equity offering comprise:

1.  Investors Database Fees
2. Financial Public Relations Firm
3. Travel
4. Accommodation
5. Representation, in other words, wining and dining
6. Conference rooms
7. Trade shows attendance or
    
exhibition prices.

On an ultra-minimal budget count USD 1,000.- of out-of-pocket expenses per offering distributor only for representation without any of the rest. 

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