Our Funding Process
An overview of our Funding Process.
Capital | Africa will assist clients to prepare the necessary documents for submission to prospective capital sources - investors. Although the investment criteria and evaluation process will differ from one investor to another, the documentation based on which such investments are considered is generally the same. The five basic steps undertaken by CA are:-
- Confidentiality,
- Preparation,
- Evaluation,
- Meeting,
- Mandate,
- Submission to Investors,
- Final Evaluation, and
- Term Sheet and Funding.
1. Confidentiality
Privacy and confidentiality in business are usually desirable and sometimes essential. Clients are often concerned at the outset about revealing sensitive or confidential information (especially in regard to new inventions or property opportunities) and CA is always prepared to execute a Confidentiality Undertaking in writing before any discussion takes place.
2. Preparation
Prior to submitting a client's proposal for funding, Capital | Africa will collaborate with the client to produce the following documents:
a. Executive Summary – This should be about 2 to 4 page. Most investors would request an Executive Summary as an initial submission, and if interested would further request more detailed documents before a decision is made to proceed.
b. Information Memorandum/Business Plan – This provides a detailed description of the business, business model, revenue model, growth strategies, competitive strengths, sales and marketing plans, and operating plan, etc.
c. Resumes – Synopsis of resumes for all key members of the executive management team responsible to execute the operating plan for which the funding is required.
d. Financial Projections – Detailed description of the assumptions supporting the financial model and realistic financial projections (generally for five years).
e. Capitalization Table – Description of the current ownership of the company, e.g. number of shares and percentage, including any share option program that the company may have or intends to initiate.
3. Evaluation
CA does not wish to waste time and confines itself to investment proposals or projects with above-average investment merit. The Client submits details of the investment opportunity or project (via email or post) and CA conducts its own free evaluation, research & analysis and reports back to the Client.
4. Meeting
If after evaluation CA determines that the proposal or project is worthy of further investigation the Principal of CA will visit the potential Client (see Travel Contribution) and if both CA and the Client agree to proceed a Fee Mandate is prepared.
5. Fee Mandate
The Fee Mandate is an Agreement between CA and the Client setting out the role to be performed by CA and the fee payable by the Client upon the successful raising of the required funds. The Client may choose to pay nothing or a relatively modest sign-on retainer to help defray immediate costs incurred by CA ( see Our Fees Structure ).
6. Submission to Investors
The funding process commences immediately on execution of the fee mandate. CA will identify and engage potential investors who may be financial or strategic or a combination thereof, depending on the nature of the proposal being submitted. The firm will submit appropriate documentation and maintain close contact with prospective investors to ensure that any follow-up requirements are immediately and effectively addressed. Investors' review-process and time taken may vary, and investors' decision taken at this stage will determine whether or not the investment proposal can proceed to the final stage of evaluation.
7. Final Evaluation
Final evaluation can vary greatly based on the nature of the opportunity submitted. A commitment to fund, subject to the normal due diligence process and execution of legal agreements, is generally given after a successful presentation to and the final evaluation process by the investor. CA will assist the client throughout the entire process and will work in close collaboration with the client in any negotiations that may take place along the way.
8. Term Sheet and Funding
On completion of the final evaluation process and the approval to invest, investors will generally offer a terms sheet detailing the terms and conditions of the investment. After acceptance of such terms sheet, preparation of legal documents, legal due diligence, and the conclusion of other legal formalities, transfer of funds will take place. Every requirement for funds is different and requires a different solution. Capital | Africa maintains a fresh and growing database of potential investors.
 Click here to learn more about our Fees Structure.
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