Why do some companies struggle to raise funds while others don’t? Investment banker Richard Luftig explains how mid-sized companies can access the funds they need. We discuss the challenges and strategies for raising money through either equity (i.e., selling shares) or debt capital (i.e., borrowing).
“As a seller, it’s extraordinarily important to understand your counterparty. It’s not just the price – it’s the certainty.”
Richard Luftig
What You’ll Learn
Options for finding funding: Private credit funds are starting to dominate debt financing by offering more flexible terms and structures than traditional banks.
What matters to investors: Equity investors focus on the fundamentals like revenue, earnings, technology, and management teams.
What makes a quality deal? Maximizing value means finding the best financial partners and setting up the ideal deal structure.
How the landscape has changed: Using data and technology is critical for matching companies and funders.
Topics Covered
Why is it difficult to raise funds to buy a middle-market company? [3:23]
How are business purchases financed? [6:52]
What is the difference between credit funds and banks when funding a business purchase? [11:35]
What do sellers need to know about how buyers finance the purchase of a middle-market company? [14:14]
Can a seller assess the ability of a buyer to raise the funds for an acquisition? [16:33]
What terms and phrases should a seller be aware of in the lender documents? [18:54]
How much capital in the middle market comes from traditional banks? [23:19]
Who are the primary players in the lending market? [27:24]
What are the primary factors lenders consider? [29:14]
What structures are used for the equity component of a transaction? [36:07]
Richard Luftig is a Managing Partner at Castle Placement, a private equity and debt capital firm. The investment bank has raised billions in funds for companies in all industries, geographies, sizes, and stages since its start in 2009.
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