In a typical capital raise, a company has two options: public or private financing. Public financing mostly involves bank loans. Private financing raises the needed capital through individuals, private equity companies, angel investors, or investment bankers.
Terms you Should Know:
Investment banker – The banker that raises money for a company in return for a set return on their investment or interest payments.
Private Equity – A method of raising money in return for ownership interest in your company.
In solido – When two or more people each obligate themselves to pay the entire debt.
Personal Guarantee – When a person individually obligates himself/herself to pay the debt of a company in the event the company fails to pay.
Why You Need an Attorney
The method you choose to raise money depends on multiple factors. You should seek legal guidance to help explore your options. Contact the professional legal team at Broussard Dove to guide you.