CAPITAL HIGHWAYS

A Trusted Advisor to Early Stage Companies in Capital-Raising Mode

 

 

THE PROBLEM. A high percentage of early-stage companies have difficulty in raising their seed and follow-on growth capital rounds. Most large institutional sources of capital have strictly defined parameters for financing companies, and small companies don't qualify for funds from the majority of those sources. This leaves a fragmented group of capital sources that cater to the smaller companies. Many smaller companies have difficulty in navigating their early capital raises, and the consequences of wrong decisions can be exceedingly costly.

 

THE CAPITAL HIGHWAYS SOLUTION. Capital Highways' mission is to provide our clients with a high-quality interface between them and potential funding sources. A client's first step in its fundraising effort should be to bring on qualified legal counsel and accounting talent. We then educate our clients as to the broad range of financing alternatives and provide details on how to initiate connections. As a final step, Capital Highways is building an extensive marketing network to boost awareness of our clients' funding needs.

 

FEES. Capital Highways strives to save our clients time, effort, and costs that they would incur by going it alone. Payment for our services, typically for a nine-month term, is negotiable and is generally in the form of cash, warrants, a royalty interest, or some combination thereof.

 

Third-Party Service Providers Important to a Successful Capital Raise

 

Securities Counsel - Fundraising is a legally complex endeavor requiring competent securities counsel with experience in the specific type of raise your company envisions. [Based on our experience in this arena, we have highlighted a number of specialists in the small-company space.]

 

Accounting Firms - CEOs are well advised to bring on professional accountants at an early date. This will facilitate early-stage fundraising and minimize problems further down the road as your company's capital requirements expand. [This link displays information on selection of an accounting firm.]

 

 

Financing Options

 

Many capital sources will request that your first communication to them include a Pitch Deck. Competition for investor funds is intensely competitive, so make sure that your deck is compelling. [This link will take you to a how-to page that contains a number of suggestions for creating a first-rate deck.]

 

 

Friends & Family - A majority of startups raise their earliest capital from friends and family. Amounts vary considerably, depending upon a company's needs and the resources available from friends and family. A typical such round might be $25k or so, although some friends and family rounds are far larger. [We present an overview of some of the state and federal regulations governing a friends and family round and discuss various financial instruments that might be used in a friends and family financing.]

 

Incubators & Accelerators - These rapidly proliferating models generally fund a small amount of money into a great number of startups and provide advice on how best to move the companies forward. A high percentage of companies graduating from the top incubators have been able to raise significant funding from angel groups, family offices, and VCs. [We highlight more than a dozen of these programs.]

 

Equity Crowdfunding - Equity crowdfunding by smaller companies has flourished following the approval in 2015 of Regulation Crowdfunding (Reg CF) and the adoption of final rules for Regulation A+ (Reg A+) financings. [This link takes our subscribers to pages of detailed information regarding equity crowdfunding.]

 

Crowdfunding Platforms - The crowdfunding platforms highlighted herein are dedicated to raising funds to purchase equity, debt, and revenue-based securities. We have purged our database of platforms dedicated to fundraising for personal projects and charitible campaigns. [Here we link to highlights on more than a dozen of the crowdfunding platforms.]

 

Angel Investor Groups - There are thousands of angel investors, but they are difficult to identify and initiate contacts. But many such investors have joined angel networks, and those groups generally have well-defined procedures for submission of company funding proposals. [This link presents commentary on angel investor networks.]

 

Family Offices - Family offices manage funds for wealthy families, and there are thousands of such offices in the U.S. and probably an equal number abroad. They control a vast pool of investment capital. A high percentage of family offices have joined various family office associations. These associations often bring investment opportunities to the attention of their members, and small companies might find these associations to be an efficient way of getting their funding proposals in front of a wide audience. [Here we provide details and commentary on several of the large family office associations.]

 

Venture Capital Firms - These profiles are designed to help young companies understand the venture firms' investment criteria and navigate what is a large but highly complex space. [This link highlights more than 20 venture capital firms.]

 

Investment Banking Firms - There are hundreds of investment banking firms raising capital for smaller companies, and your selection process should take into consideration the size of your capital requirement, the type of security you wish to market, the bank's expertise in your industry, the success ratio of the bank's past securities offerings, and the bank's reputation in the securities industry. [Here we present more than a dozen investment banking firms focused on offerings in the $10-100 million range.]

 

Commercial Finance - There are firms that specialize in arranging a wide variety of commercial financing options, including accounts receivable financing, asset-based lines, bridge and hard money loans, merchant cash advances, project financing, line of credit, and working capital solutions. Rather than pursuing these and other commercial financing options on your own, we recommend that you work with an expert in the field to assist you in achieving an optimal result. [This link displays information on the commercial finance business.]

 

 

Investor Awareness Channels

 

Capital Highways' Investor Database - Face-to Face-to-face meetings with investors, either individually or as a group, can be a valuable tool in gaining exposure for one's company. These meetings can also be quite cost effective vis-a-vis a full-blown investor relations program, provided that one avoids the pitfall of filling the meetings with parties attending primarily for a free meal. [This link provides details on several firms that coordinate meetings with potential investors in your company.]

 

Investor Meeting Coordinators - Face-to-face meetings with investors, either individually or as a group, can be a valuable tool in gaining exposure for one's company. These meetings can also be quite cost effective vis-a-vis a full-blown investor relations program, provided that one avoids the pitfall of filling the meetings with parties attending primarily for a free meal. [This link provides details on several firms that coordinate meetings with potential investors in your company.]

 

Investor Relations Firms - This is an area where many companies spend significant dollars without seeing a measurable impact. A key to getting value for one's spending is to request hard data from prospective providers regarding results from their efforts for other clients. One or two examples of success should not suffice, because most firms have such stories. It would be far better to get a much longer client list and actually speak with the decision makers at some of those firms. [Our Managing Director has had extensive dealings with investor relations firms over the years, and he has highlighted some of them.]

 

 

Capital Highways, LLC

 

Capital Highways, LLC is a Florida-based LLC formed in April 2017 to assist CEOs of small companies in navigating the complexities of raising growth capital. Our founder and Managing Director is William J. Ritger, who has more than 30 years of capital markets experience. He is also a co-founder and Managing Director of Bridges 1, LLC, which provides bridge financing to publicly traded companies in the process of a larger capital raise through a registered broker-dealer. Mr. Ritger and affiliated entities have participated over the years in hundreds of private placements for smaller companies, and he also has more than 20 years of experience working as an equity research analyst for broker-dealers and other financial services companies in NYC.

 

 

 

 

Capital Highways, LLC

William J. Ritger, Managing Director

Juno Beach, Florida

caphighways@gmail.com

561.891.1903

 

 

Capital Highways, LLC. All rights reserved.