Key documents in capital raising

Capital raising or raising business finance, which is part of corporate finance, is central to every business. Such finances can be raised through various methods which include:

Own savings,

Funding by shareholders, also known as equity funding and may involve subscription for shares by high net worth individuals and institutional investors such as other companies, private equity firms, pension funds and others,

Supplies on credit or terms,

Customer deposits,

Borrowings from financial institutions, family or friends, or high net worth individuals,

Profit sharing arrangements or joint ventures,

Sale and leaseback of assets, etc.

Key documents in capital raising

Various documents are used in capital raising and it is important to understand them especially their business or financial implications and also their legal implications. Some of the key documents are explained below.

Mandate

Where a business engages a consultant to help it raise business finance its advisable to sign a mandate document or agreement appointing the consultant, clearly spelling out for example the terms of reference and fees for the consultant.-herald.czw