The world of mergers, acquisitions and takeovers is populated by businesses, both large and small, looking to grow, downsize or simply move in a new direction. The investment banker is a key player in helping governments and businesses to raise the money needed to turn strategic goals into financial realities.
Investment bankers provide the know-how and expertise companies need to choose the best options for raising capital. Should funds come from increasing a company’s debt or by offering an equity interest in exchange for a capital investment? These are complex issues that deserve the guidance of professional venture capitalists.
Companies like KIT Capital work with businesses to identify investment opportunities for growth or diversification. The financial advice offered by experts can be the key to helping a business grow and succeed.
Development of a Financing Plan and Exit Strategy
Businesses in the market for an infusion of capital must first realize that investment bankers or venture capitalists do not operate in the same manner as a commercial bank approving a business loan that is repaid through a series of monthly payments. Venture capital comes bundled with the experience and expertise of the venture capital firm that uses its money as an investment rather than as a loan.
A venture capital firm such as KIT Capital has a stake in the success of the company it is supporting with an infusion of capital. Venture capitalists are stakeholders who usually assume a more active role in a business than would a lender receiving monthly repayments.
A company that does business with an investment banker or venture capital firm will frequently be guided in the preparation of a business plan. The plan will be tweaked and modified with the assistance of the investor to provide for how the invested funds will be used and the anticipated benefit to the business receiving the capital infusion. The business plan will also detail how the investor will ultimately exit the relationship with its contribution repaid.
Staking Their Fortunes on a Company’s Success
Venture capital firms make money on their investment if the company they back is successful. Most venture capital transactions include an equity stake in return for the funds that are invested. The ownership of a company continues to operate it, but a venture capitalist like KIT Capital provides the money and an array of services and expertise to help the business to prosper.
Common services offered to businesses by investment bankers or venture capitalists include advice on equity and debt management and utilization; organizational restructuring; merger and acquisition advice and assistance; and asset recovery or disposal guidance. The extent of the role played by the investor is determined by the terms of the agreement negotiated by the business and the investor in advance of the commitment of funds.
Venture Capital Outlook
The economic recovery in the United States, coupled with the emergence of developing economies in South America, Europe and the Middle East, forecast a bright outlook for investment opportunities for investment bankers and venture capitalists. Venture capital and financial advisory services from companies like KIT Capital and its founder, Kaleil Isaza Tuzman, offer new and emerging industries the ability to raise the funds needed to expand and grow.