A software for capital raising is a tool to simplify the process of raising funds for the business. It can assist in managing the company’s cap table, make equity grants, and conduct valuations for both investors and employees. The most effective platforms also integrate legal workflows into the platform, and support ESOPs and equity-based transactions.
The process of raising capital is a major undertaking for companies and the best way to ensure that all ducks are in order is to make sure that all of your documentation is up to current and prepared prior to time. It is essential to have a good executive summary, profit-and-loss statement, balance sheets, and other financial documents to present to investors as part your capital raise due diligence.
There are many ways a business can raise capital. They include private loans and equity, crowd-funding, and Small Business Administration (SBA) loans. Most of these methods involve the same steps, though some may require more paperwork depending on where you are raising funds from.
The most common form of capital raising comes from private investors, venture capital or VC firms, and hedge funds. Before investing, most of these sources of funding want to review a company’s financial records. This includes a profit and loss statement, balance sheets, tax returns and bank statements. This process is known as due diligence. It’s recommended to have a data room due diligence program such as DealRoom or an alternative in place to help make the process as efficient as it can be.