Comeby! said:

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What kind of return would an investor expect? Have you thought about private equity or hiring an advisor that has those certs to raise capital? I know many (including myself) hate to take on PE money, but it can be quick and lucrative vs a long capital raise where you can miss opportunities due to timing.

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Buck Compton said:

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Comeby! is right - You're going to need an experienced partner/advisor for a quick capital raise to raise those types of numbers,. You're not likely to have the time, patience, or connections to piece it together from 20 different funds and family offices if you want this to happen now.

It's likely going to come from one source (even if they choose to syndicate it) because they're going to want some significant control and oversight over operations.

If you go the PE route, it's definitely going to be one firm, and you're not going to recognize your balance sheet when you come out of the other side of this. Your debt load is going to be huge and any assets you invest in are going to have to start producing cash almost immediately. Most of them are brutal to work with and think they are God's gift to the world. They'll act like they own you. But the business model works if you know how to operated efficiently and deliver at scale.

Distribution is likely going to be the most capital intensive to stand up, which is going to be heavily debt-based, but at least it is ABL (asset-based lending) and typically some of the cheaper money out there. They won't lend against contracts, they'll lend against physical assets. A PE firm would likely just go out and target distributors to buy.

Is there any way to accomplish some of this vertical integration without distribution? Maybe development first? Without knowing industry it is hard to give more guidance.

Source: I'm CFO of a $450 million distributor that's fought off multiple PE proposals that wanted our business and I've dealt with a few of them in previous roles. We've scaled, but not that quickly.

Happy to have a quick chat about your situation if that would help (email is buckcomptontexags at gmail)

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bmks270 said:

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Do you have good revenue and profits already? You have to show there will be a market and buyers for your product and for your expanded production. Given the large amount of money and runway, financiers have to believe the demand exists and all you need to do is fill it. If not 150 MM will be a tall order.

I'd also be curious how you have time for 3 companies and a 4th? And fund raising is a full time job. Are you going to redirect all of your attention to this new venture?

I've worked at a few VC funded companies and the CEO has no time for anything else during fundraising time. And it's all about networking and getting introductions to potential investors. Networking and Pitch pitch pitch non-stop.

There's lots of money out there, but the current fund raising environment is tight. The number of deals happening is way down and the deal sizes are way down compared to a year ago. Investors are now being more picky, and have higher standards and more due diligence than they did 1-2 years ago. Some companies recently have also had down rounds where their valuation is decreased or flat rounds where there is no change.

The large fund raises occurring currently seem to have the following:
- later funding rounds after the company has proven their technology works
- already have a backlog of committed buyers or large purchase agreements in place
- just need money to fill the orders.

If there are any doubts about product market fit or demand, product viability, or the team's ability to execute, then raising 150 MM may be impossible. If there is already competition in the space you'll have to have a compelling pitch as to how you'll take new market share.

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