Capital Structures

Businesses are frequently on the hunt for outside capital for a variety of purposes, among them boosting growth, getting through a tough time, addressing certain budgetary needs, or just to relieve the pressure of the everyday grind and anxiety of worrying about meeting their obligations, particularly in the short-term. Additionally, when an investor or a lender agrees to provide a business with capital, it instills a sense of confidence in the owner or management team — a confidence that someone else agrees with their vision and sees the potential for success.

While in many ways, obtaining capital can be a savior, it is important to realize that it comes with strings, and it introduces other concerns and entities into the business — other entities with varying perspectives, experiences, goals, and interests. In a number of ways and to varying degrees, these new entities will leave their mark on a business and will shape its direction.

Therefore, it is extremely important to not only understand what type of capital to take on — equity, debt, or a combination of both — but also, who that capital comes from, and what strings are attached to it. The wrong decision can have catastrophic effects, even to very profitable businesses.

The team at Khorrami Consulting can help businesses in a number of aspects of dealing with their capital needs, from determining the appropriate structure, to raising, to negotiating, and implementing.