Typical Capital Raise Process In A Private Placement

Author

Ryan Chen
January 13, 2025

Hey there,

Welcome to Capital Growth Partners newsletter. It is approximately a 4-minute read.

In today's newsletter, we are going to the high level fund raising process for a private placement through an investment bank. 

We are going to go over…

  1. The due diligence phase

  2. The documentation 

  3. The outreach

Actionable Tip

Most early stage ventures already prepared their documents including a pro formas and deck needed for a raise OR have established relationships with investors within a certain sector OR already prepared their PPM/offering memorandum.


You can outsource the complement of work that you don’t have in place (I.E the outreach to a marketer or the PPM creation to a lawyer) to avoid the more pricey cost of the full service.

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The due diligence phase

This initial stage is for information gathering. The investment bank gathers the documents to do a financial analysis or assets to determine a valuation before identifying the structure of the deal alongside the market research(for the investor).

The documentation 

This phase creates the CIM(Confidential information Memorandum) and outlines the terms of the investment and all legality checks out. They’ll also likely get an outside legal counsel to ensure the translation comply with regulation.

The outreach

This is the juicy part - where the rubber hits the road. Ideally you start this process before you spend 10s of thousands on creating perfect decks and pro formas to test investor interest. You can test the market by sending out a teaser of your idea before any formal changes and send a rough draft of your deck and reshape the marketing assets as you go. The fulfillment at most banks are the same - an email/call outreach to their rolodex first and then a list. The relationship makes a difference but what matters more is the synergy between the company and the investors mandates. Now most IBs outreach is limited to their network - that’s where the tech comes in. Leverage Linkedin and email mechanism to reach a larger audience while remaining granular.

How I Can Help You

If you like this newsletter and want to work with me, there are a few ways we can do so:

  1. You can book a meeting to work with my firm, Capital Growth Partners (link)

  2. You can send me referrals by sending this (link)

  3. You can invest in great prospective companies by booking here (link)

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