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Episode 12 // Seven Insider Tips to Securing Equity Investment
Championed by our friends at Community Futures Sunrise
Equity financing is on the rise, Founders. Just a day before this writing, Canadian Venture Capital and Private Equity Association (CVCA) released its year-end report revealing VC investments for 2020 were 2nd-highest ever, second only to 2019.
Today, we’re bringing you the lowdown on equity financing, so you too can ride this wave and give your business the fuel it needs to accelerate its growth.
Sharing her insider tips on the topic, NTN Pro, Laurie Dmytryshyn, Chief of Equity Investment at PIC Investment Group, sets us up for success.
Part 1 // Equity Financing: Exchanging Ownership for Funds
The amount of capital you’re looking to raise, partnered with the stage of business you’re at, will impact your options, Laurie points out in Part 1. Love money, angel investors, venture capitalists, and private equity firms—Laurie breaks down the jargon and explains the merits and conditions that come with each form of equity capital.
In exchange for equity capital, shares (a percentage of ownership) are expected in return—which may also include decision-making control. Be forewarned, as Laurie points out, equity investors, in addition to eventually recouping the value of their shares, may be expecting regular dividends—a portion of the business’s net profits (after tax).
“Equity Financing is the process of raising capital through selling shares,” explains Laurie.
In Part 1 of this episode, Laurie shares with us the basics of equity financing and how finding the right investor(s) is critical for Founders.
Part 2 // What Equity Investors Are Looking For
Ever wonder what investors base their lending decisions on? In Part 2, you’ll find out. Get a glimpse into the investors’ perspective, and the key elements they examine when determining whether to invest.
Laurie’s quick to remind us, one of the biggest advantages of going the equity route is that investors share a purpose with the Founder—to see the business flourish. To this end, they’ll scrutinize the numbers, but they’ll also look past them, to see where the opportunity is, and what it will take to get there.
Founders are also required to look long-term. Not just from the perspective of the endgame (aka exit strategy), but in better understanding how the business will scale over time. Because unlike debt financing, equity investors are looking for their investment to pay off in both the short- and long-term.
Tune in to Part 2 to better understand what impact your business (its solution, opportunity, team, scaling potential and current debt load) may have on an equity investor’s decision to finance your vision.
Part 3 // Weighing the Pros and Cons
As Laurie reminds is, there’s much to love about equity as a source of financing:
1 // There are no principal payments due, lightning the cashflow burden and being able to use that cash to fuel growth.
2 // Equity funding won’t add leverage (aka debt) to the Balance Sheet.
But perhaps the greatest advantage, Laurie reminds us, to securing an equity investor is the invaluable experience, expertise and connections they bring to the business. Their insights and networks can help scale a business much faster, and more efficiently as they can help to smooth out any potholes a Founder may hit along the way.
There’s a long list of "upsides" when it comes to equity financing, and Laurie's taking the time to map them out in addition to some of the potential downsides, too. Tune in to do your due diligence.
About the Pro //Laurie Dmytryshyn
Chief of Equity Investment
PIC Investment Group
Laurie Dmytryshyn is the Chief of Equity Investment for PIC Investment Group Inc. (PIC), responsible for leveraging PIC's internal
resources to help their equity investment (minority interest) companies grow and succeed.
PIC is a private, family office based out of Saskatoon, Saskatchewan led by Greg Yuel, President and CEO.
PIC currently owns 8 operating companies and has 22 active minority investments.
About the Champ // Community Futures Sunrise
Community Futures (CF) Sunrise provides loans, advice and support to entrepreneurs and businesses in southeast Saskatchewan. With a mission to support the development of business in the region, CF Sunrise strives to offer innovative and customized financing and training options that encourage business growth.
The board and staff are committed to helping entrepreneurs access the capital and training needed to create and grow successful businesses. Get in touch with CF Sunrise today. They’re here to help!
CF Sunrise is part of a network of 267 Community Futures offices across Canada. They have a rich history of helping businesses succeed. Community Futures - a Canadian Success Story
Connect //
Gab Lab Champ // CFSask.ca/Sunrise 1.877.851.9997
Gab Lab Host // www.nailthenumbers.com 1.844.844.3660
NTN Pro // www.picgroup.com // 306.664.3955
Have an idea for a Gab Lab episode? Looking for help with a specific topic?
Hit us up at helpdesk@nailthenumbers.com
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