The Danish Startup Ecosystem Guide - Magasin - Side 60
SEED & VENTURE CAPITAL
Sponsored: This article is published in collaboration with Deloitte
Deloitte: Raising capital
is smart. Doing it without
thinking is not
Rash decisions can end up haunting companies later on in the growth journey.
H
ow should we raise capital? Should we go to venture
funds or business angels? And
should we seek equity or debt
financing? A lot of questions usually
arise when a fast-growing company
needs to raise capital.
This is why it is important to get the
right independent advice. Especially in
the critical scaling phase, where poor
preparation and hasty decisions can
leave their mark on the organisation
several years later. This is the view of
Deloitte, which since 2017 has specialized in advising growth companies on
their growth journeys.
“Advising Maersk is not the same as
advising a small IT company. Startups
and scaleups have a much greater need
to take a pragmatic approach. As an
advisor, you have to be able to navigate this and get the company to ask
themselves: What do we need to have
in place as a minimum and how should
we prioritise all the good ideas?” Says
Mads Fauerskov, Partner at Deloitte Fast
Growing Companies.
Over the years, Deloitte has built up
and specialised through a dedicated department for growth companies. Here,
Deloitte Fast Growing Companies has
60
a total of 66 experts advising on both
accounting tax, and starting up in new
markets. However, it is just as much
when companies need to raise capital
that Deloitte adds value.
‘We help our clients to build the finance
function to support growth. This can be
anything from the startup of markets and
warrant programmes, for advice in raising capital. Clients today are looking for
much more than just an accountant and
an annual report once a year. They want
an adviser who is close by and has been
there and done it before. We try to have
all the necessary services to support the
client throughout the growth journey,”
explains Mads Fauerskov.
Investor confidence
Raising capital is not something you
should do with your eyes closed. If the
valuation becomes unrealistic or misses
the expected turnover, it can ultimately
damage the credibility of the company.
“Many clients come with the idea of
raising, for example ten million, and
when they leave here, they may only need
to collect eight million. Or, conversely,
they need to collect more than originally
intended. It is very important to get a sober overview of how to structure the level
of capital,” says Mads Fauerskov.
That is why Deloitte often builds the
company’s business model in Excel. A
good excel model simulates balance sheet,
liquidity, bank debt, the most important
KPIs, such as ARR, MRR, CaC, LtV. Even
shifts in VAT payments are taken into
account. All in all, to ensure that everyone
has a realistic picture of what the growth
entails in terms of capital requirements.
“A financial model is very important
when raising capital so that the exact
capital needs are known. Almost every
time we advise, we deliver an eye-opener. If the owners give up too many
shares in the beginning, it can become
a shackle that they carry with them far
into the future,” says Fauerskov.
Impartial counselling
Regardless of who you turn to when
fundraising, be it the venture fund, the
bank or current investors, most actors
have a vested interest or hope for a particular outcome. So who do you listen to?
“Our first task is to consider: What is
best for the company? The fact that we
are neither founders, the bank or the investors is the most important argument
in favour of our impartiality. We advise
with the general rule that what is best
The Guide
