Raising equity looks different from the inside than it does on paper.
Having raised equity for both a venture-capital–backed startup and a public company, I’ve seen firsthand what it really takes to secure funding for growth, finish product development, and support scaling.
This article shares my top CFO insights and key lessons learned along the way.
Crafting a Pitch Deck That Tells the Right Story
To start, a strong pitch deck is essential.
It needs to tell the story of the company clearly, who the market is, which major customers you serve, what gives you a competitive advantage, and how the funds will be used. The experience and accomplishments of the management team matter greatly, as many investors view equity investments as a bet on the team itself.
Investors also expect a comprehensive, multi-year financial projection. A well-organized data room with supporting documents for commonly asked questions helps prospective investors assess their interest quickly. Advisors guiding the raise, including investment bankers, law firms, and commercial bankers, can provide a thorough checklist of what to include.
Understanding Ownership, Valuation, and Investor Expectations
Equity investors also need a clear understanding of how much ownership their investment represents. This is determined by the pre-money valuation. Company owners should have reasonable expectations about the equity they will give up in exchange for capital. When ownership stakes are significant, new investors often expect a board seat or at least the right to observe board meetings.
Ensuring the Right Fit With New Investors
It’s equally important for company owners to evaluate how well new investors will work with the existing team. Investors who understand the industry and bring relevant contacts can add tremendous value, sometimes equal to the capital itself.
At the same time, owners should feel confident that the personal chemistry will work. A valuable due diligence practice is to speak with other companies that have received capital from those same investors.
The Value of Continued Support From Existing Investors
Continued investment from existing equity holders is another powerful signal. It reassures new investors that the business story, projections, and strategy are credible. It also helps offset dilution for early investors when new capital comes in.
Lessons From Completing an IPO
One of the equity raises I completed was an Initial Public Offering, or IPO, on the New York Stock Exchange. Beyond the pitch deck, completing the S1 filing with the SEC was a major milestone. The SEC review triggered several rounds of questions, and once the responses were deemed satisfactory, the filing was approved.
Ensuring that three years of audited financial statements were ready at the time of the offering was critical. We also conducted a road show with key potential investors and investor groups ahead of the raise, organized by the investment bankers.
How Much Capital Should Be Raised?
The amount of equity raised should support 12 to 24 months of operations and allow the company to reach a meaningful milestone, whether that’s product launch, revenue targets, or new customer acquisitions. Raising too much capital too early can create pressure to deliver faster than is realistic.
Building Ongoing Relationships With Investors
Once new investors come on board, ongoing communication becomes essential. This means providing timely financial statements, holding regular meetings with the board and management, and maintaining strong relationships. Sharing material changes early helps prevent unwanted surprises.
Key Takeaway
Raising equity capital can be a powerful way to grow the business if you approach it correctly.
For additional support, get in touch with one of our CFOs.
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About the Author
Deane Baron brings proven success working with small- and medium-sized businesses across the U.S., Canada, and Mexico. With a track record spanning technology, software, and manufacturing, he is known for driving measurable results and cultivating accountability around business goals and financial performance. Deane collaborates closely with teams to fuel profitable growth, strengthen operations, and accelerate cash flow, consistently helping organizations advance with clarity and confidence.
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