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Should I hire an outside firm to raise capital?

The company I founded, QuickLoadz (located in the booming metropolitan area of Nelsonville, OH) has invented, patented and started manufacture of a brand new way to move sea shipping containers that is entirely novel, and is finally ready to be moving into production. Now we need $$ to hire a full time CEO, CFO, marketing, sales staff, etc... All the money eating things that happen when you go from R&D to manufacture.

What I would like to ask is for advise in finding the right investors, or in finding the right company to find investors. I get wildly contradictory advise on whether to try to do it ourselves or hire in experts. I am leaning toward experts because I assume we will make a lot of amateur and expensive mistakes trying to do it ourselves. Can you recommend a path? In-house or outside? If outside, do you have a recommendation for who? We are transportation, Intermodal, high tech, heavy manufacture. It seems like software investors are everywhere, high tech heavy manufacture? Not so much.

Answers

Joseph Ori
Title: CEO
Company: Paramount Capital Corporation
(CEO, Paramount Capital Corporation) |

I would first ask your law firm and banker for recommendations on a small or regional investment bank or broker dealer to advise on your capital raise. Also, your Board of Directors should have some contacts here.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Make sure your attorney is in the capital raise/PE/VC/investor market place.

These guys are a little pricey, but work deals that are equitable and have contacts.

Contact me if you need a recommendation or two (via the msg function).

Stephen Ambler
Title: Director of Service & Delivery
Company: RoseRyan
(Director of Service & Delivery, RoseRyan) |

I agree with Joseph - engage an expert. His recommendation of finding one by talking to a law firm or banker is spot on. All major law firms have people that keep track of investment firms (VC's etc). If you decide to not go down this route and go on your own, look at who is investing in similar companies to you - those investors may be interested in investing in more than one company in the space.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

I am NOT privy to the details of your product/business plan but what you said raised some points in my brain......particularly the "from R&D to manufacture" part. These are just my comments absent other details...

My overall suggestion is to make your firm a no-brainer for investors. What does this entail? It MAY (emphasis) include the following as examples...
1. A few signed orders/customers.
2. A few first-adopters.

To illustrate, if you are familiar with Shark Tank, a "novel" concept or even a made-product (however well R&D'd) is no guarantee of an investment.. What investors look for is traction. Finding investors in your company life cycle is REALLY HARD! Yes, you will and eventually can get investors even without the aforementioned examples.....but you will be doing yourself (and company) a favor (making it easier to raise capital) if you have them.

That being said, I always advice to explore other possible sources of $$ first (Self or customer financed if possible). You can maybe get an SBA loan, a bank
loan. At least as a starting point. When you see the ball starts rolling, then you can explore the CAPITAL side......the benefit of it is that you have a HIGHER VALUATION than what you have now.

D R
Title: Audit
Company: CPA Firm
(Audit, CPA Firm) |

Do you have a substantial Board of Directors that can help you? A well functioning and experienced Board can help you avoid most of the big mistakes, i.e. not having a clean cap table, uncorrectable equity deals, having silly valuation expectations and the like. Paying a real Board with fiduciary responsibility in equity and a little bit of cash could be invaluable. Outside capital can be expensive, but valuable if the PE firm knows the space and can raise the valuation. But, don't think only about this round, you'll need to raise more round later. In conclusion, it depends. There's no single correct answer. But you're not a typical VC target, you're more attractive to a strategic investor I think. (an experienced attorney will help you protect IP etc in dealing with strategics - but not protect to the point of self destruction. Too many NDAs etc are anathema to VC and PE investors and strategics.)

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

As a P.S., I just found this you tube video and LinkedIn post. Let it be a reality check.....

https://youtu.be/uOvryUPR6dA
https://www.linkedin.com/pulse/what-your-probability-raising-funding-sramana-mitra?trk=hp-feed-article-title-channel-add

Bottom line, and as I said in my initial response ("a no brainer"), make your company FUNDABLE and a VALIDATED business!

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