Raising
Capital

Understanding Your Funding Needs

The first step in your capital raising journey is to clearly define your funding requirements. Assess your current financial situation, identify your short-term and long-term goals, and determine the specific amount of capital needed to achieve those goals. This exercise will help you tailor your capital-raising strategy to the most suitable financing options.

Exploring the Capital Markets Landscape

The Nigerian capital markets offer a diverse range of financing solutions to cater to the varying needs of businesses and governments. Familiarize yourself with the different types of securities available, such as equity, debt, and hybrid securities, and understand the advantages and limitations of each.

Navigating the Regulatory Framework

The SEC plays a crucial role in ensuring a fair and transparent capital market environment. As you explore various financing options, it is essential to adhere to the SEC's regulations and guidelines to safeguard your interests and protect investors' rights.

Engaging with Capital Market Intermediaries

Capital market intermediaries, such as investment banks, stockbrokers, and solicitors, can provide valuable expertise and guidance throughout your capital-raising process. These intermediaries can assist you in structuring your offerings, conducting due diligence, and connecting you with potential investors.

Exploring Alternative Funding Options

In addition to traditional capital market instruments, consider alternative funding sources such as venture capitalists, and crowdfunding platforms. These alternative options may be particularly attractive for early-stage businesses or those with innovative business models.

Capital Raising Process: A Step-by-Step Guide

1. Develop a Compelling Business Plan: Create a comprehensive business plan that clearly outlines your business strategy, financial projections, and target market. This plan will serve as your roadmap for attracting investors' interest.
2. Conduct Thorough Market Research: Analyze your industry, competitors, and target market to understand the prevailing market conditions, investor preferences, and potential risks. This research will inform your capital raising strategy and positioning.
3. Structure Your Offering: Choose the most suitable type of security for your capital raising needs, whether it's equity, debt, or a hybrid instrument. Consider factors such as ownership dilution, interest payments, and dilution of voting rights.
   You can have a look at our repository of executed transactions to serve as templates for this step
4. Prepare Offering Documents: Compile the necessary documentation, including a prospectus, financial statements, and risk factors disclosure, to provide investors with a comprehensive understanding of your business and the investment opportunity.
   You can look at our requirements for registration of securities to serve as a requirements checklist for this step.
5. Engage with Capital Market Intermediaries: Select investment banks, stockbrokers, solicitors and other relevant market intermediaries with a good regulatory standing with the Commission to assist you in structuring your offering, conducting due diligence, and marketing your investment opportunity to potential investors.
   You can search for a registered operator here to get you started on this step.
6. Comply with SEC Regulations: Adhere strictly to the SEC's regulations governing securities offerings, ensuring that all disclosures are fully made, accurate and transparent to protect investors' interests.
7. Engage in Investor Roadshows: Present your business plan and investment opportunity to potential investors through roadshows, meetings, and conferences. Effectively communicate your value proposition and address investors' concerns.
8. Negotiate Terms and Conditions: Negotiate the terms and conditions of the investment deal with potential investors, balancing your capital needs with the desired equity dilution or interest rates.
9. Close the Deal: Once you have reached an agreement with investors, complete the necessary documentation and finalize the transaction.
10. Maintain Transparency and Compliance: Continuously disclose material information to investors and comply with ongoing SEC reporting requirements to maintain investor confidence and trust.

Obtain the relevant returns form for you to carry out this step from this link

PLEASE NOTE:

The steps outlined above are a general guide and may not apply in all cases. The specific capital raising process for your business will vary depending on several factors, including:

• Type of business: Startups, established businesses, and non-profit organizations have different funding needs and options.
• Size of offering: The process for raising small amounts of capital through angel investors or crowdfunding differs significantly from raising large sums through venture capital or debt offerings.
• Regulatory environment: Securities regulations vary depending on the jurisdiction and type of offering.
• Investor type: Different types of investors have different interests and require different levels of due diligence.

Therefore, it's crucial to consult with experienced professionals such as financial advisors, lawyers, and accountants to tailor the capital raising process to your specific circumstances.

Specifically, the following steps may not be applicable in all cases:

• Step 8: Negotiate Terms and Conditions: This step may not be relevant for funding sources with fixed terms, such as government grants or bank loans.
• Step 5: Engage with Capital Market Intermediaries: For smaller raises or businesses with established networks, using intermediaries may not be necessary.

Remember, flexibility and adaptation are key when navigating the capital raising landscape.

The SEC is committed to fostering a conducive environment for businesses to raise capital and achieve their financial goals. Our team of experts is dedicated to providing guidance and support throughout your capital raising journey, ensuring that you have the knowledge and resources necessary to navigate the capital markets effectively.