In an ideal world, the company that you put so much energy into building would be making enough money through the sales of goods and services to be able to expand and grow naturally. However, sometimes you have to spend money to make money, and just about every company has to raise funds at some point in order to grow and scale. The number one question we get asked by founder teams is, "How do we raise funding or investment for our company?". Every successful business reaches a stage where it has to choose its growth path. Either grow organically, using operational capital as and when it's available, or raise growth capital in order to scale up faster. There are a number of ways in which to solve the problem of raising funds for business growth. Five types of fundraising for your business It is a truism that you need money to make money, and entrepreneurs need to find ways of either freeing up capital within their operations or reaching out to potential outside investors for a cash injection. The five major sources of corporate funding for a business are retained earnings, debt capital, equity capital, angel investors and venture capital investment. Keep in mind that all these avenues have their own sets of advantages and disadvantages, and it pays to get in expert business fundraising services in order to choose the right course of action for your unique business goals and restrictions. Retained earnings Retained earnings are the amount of profit a company has left over after paying all its direct costs, indirect costs, income taxes, and dividends to shareholders. This represents the portion of the company's equity that can be used for expansion and development. Debt capital Debt capital refers to borrowed funds that must be repaid later. This is any form of growth capital a company raises by taking out loans. These loans may be long-term or short-term, and debt capital does not dilute the company owner's interest in the firm. 3. Equity …
OCFO’s FundRaise Con is a must for entrepreneurs
OutsourcedCFO’s FundRaise Con, part of their Founders Events focusing on supporting and educating entrepreneurs on various aspects of business and finance, has become a must-attend in the SME entrepreneurial ecosystem in South Africa. One of the biggest challenges founders face is raising capital for business growth. Even the most brilliant business ideas can only progress so far without adequate funding. But raising capital is a highly technical process that often requires a corporate-finance background to complete the valuations, financial modelling, due diligence, and other aspects investors require before they will even consider meeting with you and your team. It is this challenge that OutsourcedCFO’s FundRaise Con aims to address, by putting rising entrepreneurs in touch with investors and experts who will share their wealth of experience and knowledge around the fundraising journey. Hosted by OCFO, this conference brings together dynamic speakers, motivated attendees, industry-leading sponsors, and allows meaningful networking and learning opportunities for all attendees seeking expert advice on their fundraising journey. Insight from investors themselves Imagine being able to hear exactly what investors are looking for - from the investors themselves. FundRaise Con speakers include investors who share insight into what potential backers are looking for in companies, as well as founders who have successfully raised finance themselves. Panel discussions and Q&A sessions will allow attendees to ask pertinent questions and learn from expert insiders. About Outsourced CFO Founded in 2013, Outsourced CFO is an award-winning CFO Services, Cloud Accounting and Automation company, serving rapidly growing organisations and assisting them with the technical aspects of their funding process. Drawing from deep technical and professional wells of expertise, OCFO’s mission is to empower founder and management teams to build world-class finance …
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Four Reasons Why You Should Audit Your Company
The end of the financial year looms, and this is usually the time that shareholders and directors work with their accounts department to draw up their annual financial statements. You may blanch at the word “audit” as it has developed a number of negative connotations, more to do with forensic investigations, rather than the helpful tool it can be to plan and position your business for future growth. What is a company audit and why is it required? The term audit refers to the process of examining and evaluating your business’s financial statements. During an audit, an auditor checks if the business’s financial statements are complete, up-to-date and correct. An auditor’s job is to ensure that your bookkeeping activities are above board and that your financial statements are a reflection of the real financial position of the business. A well-audited, up-to-date business grabs the attention of potential funders who want to invest in your company. Why you should seriously consider auditing your company: Firstly, in most legal jurisdictions it is a legal requirement for your company to be audited. Tax Compliance is taken seriously, no matter where you are in the world. Auditing your company also gives your annual financial statements credibility. This is very useful in improving investor and shareholder confidence in the company, especially if your business is looking to expand through growth funding. Audited annual financial statements will also help your business when working with banks in applying for loans for capital expansion. Another key advantage to auditing your company is to make sure there’s no irregular expenditure, fraud, or embezzlement. As a business owner and director you are responsible for making sure your business can account for all its transactions. As companies grow it becomes more difficult to keep an eye on everything. An independent auditor will scour all the relevant documents to make sure that nothing untoward is …
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4 Steps to Move Your Business in the Right Financial Direction
Understanding your business's current financial situation The financial position of your company is important not only for the day-to-day running of your business but also of crucial importance if you ever decide to shop around for investment capital. Your financial strength can be a clear indicator of the potential of your company and a selling point for investors. Analyzing your current financial situation means a complete evaluation of categories such as assets, liabilities, equity, expenses, revenue, and more. These elements are measured through various business-related financial formulas that allow you or your finance team to get an exact overview of your financial outlook. Are there any ways to improve the financial position of my company? Here are four basic starting points: 1. Financial planning is essential If you want a clear understanding of how your business is doing financially in order to plan and strategise, a fairly thorough understanding of your financial statements is essential. Keep in mind that your financial statements are only a starting point for analysis and that you will need the assistance of a CFO to consult and help you identify any red flags and really dig in for useful trends. For instance, if your accounts receivable is lower than in the previous budget year – it might mean that you are invoicing less – or actually collecting your money faster. So the numbers are really only the beginning. The key is to use your statements to spot trends and anomalies, and then follow these up with further investigation in order to draw a useful conclusion that can be turned into an action plan. Really knowing the numbers can help drive the strategic direction of your company. How to think about financing expansion. How to approach global structuring for long term wealth protection. A fractional CFO like Outsourced CFO in your corner can help you navigate these important crossroads and set you on the path to financial …
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Need Growth Funding? Applications open for Founders Foundation Finance Readiness Programme.
3 February 2023, Cape Town. Founders Foundation NPC in partnership with Outsourced CFO (OCFO) and Investec Corporate Social Investments (CSI) is excited to open applications for the fifth round of their Finance Readiness Programme aimed at assisting entrepreneurs in raising critical growth funding to scale their established businesses. The launch of this new round of the programme comes just as the total amount of debt and equity financing offered to previous participants closes in on the R100 million mark after two companies in last year’s cohort closed R20 million in financing deals each. Dana Pretorius CA(SA), co-founder of OCFO, says 'OCFO is honoured to act as the catalyst for the growth of last year’s cohort of entrepreneurs and their businesses. We know the funding will unlock material opportunities for the companies to scale optimally and have a massive impact on their communities." Pretorius says the purpose of the programme is to assist businesses in accelerating their progress on their fundraising journey. “The ability to access funding is critical to enabling SMEs to grow and scale to their full potential. However, the fundraising process can be complex and not all founders have corporate finance experts in their management teams. Through this programme, OCFO empowers entrepreneurs with the expertise to enable them to unlock the growth capital they need.” Setlogane Manchidi, Head of CSI at Investec, says the programme also offers benefits that reach beyond the funds being raised. “While this is understood to be the Finance Readiness Programme, we are encouraged by its broad impact on personal and entrepreneurship development, strategic business thinking, and employment creation as reported by participating entrepreneurs. This makes the programme extremely valuable, regardless of whether one raises funding or not. I would really encourage emerging entrepreneurs to consider applying, not just for the fundraising possibility, but as an …
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The Importance of Financial Planning for your Businesses
When you’re starting out and putting in the hours to turn that business dream into a functioning reality, it can be difficult to think of next week - never mind next year. However, it always pays to plan ahead, especially when it comes to the financial future of your business. Business Financial Planning: Financial planning for your business helps you to forecast future financial results and decide how best to use your company’s current financial resources in order to realise both your short-term and long-term plans. Because planning involves looking well into the future, it is a highly creative thinking process as well as an analytical one, and you might need to call in the experts to help you juggle both these aspects of your financial roadmap. How can financial planning help me achieve my company goals? Having a strong financial plan for your business is probably the most important single thing that you can do to help yourself succeed. It’s your roadmap, your guideline, a reminder of what your goals are–what you are trying to achieve in the short term and the long term. It is so important that possible investors, bankers, and creditors won’t even set up a meeting with you if you don’t have a financial plan in place. We cannot state this clearly enough - get your business's financial function set up effectively from the start, and the rest will follow. Here are 5 benefits of financial planning for your business: Financial planning can help you: 1. Manage your cash flow properly: Good financial planning allows you to set clear expectations regarding your cash flow so that you know where you can spend and where you need to cut back. This is especially important after the initial startup expenditures. 2. Allocate your budget: Financial planning for businesses makes for clever budget allocation and allows all players within your company to understand where and how money will be spent, ensuring less friction. 3. Set …
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Chaos in US Congress – How this helps SA Investors
The chaos experienced in the US congress since the 2022 mid-term elections is proving to be a boon for investors. It took the Republicans 15 rounds of voting to elect Speaker of the House Kevin McCarthy. The last time this happened was exactly 100 years ago in 1923. While the Republicans do hold a small majority in the House, it was elements of the extreme right in the party that tried to force concessions from McCarthy to get their vote. The elections have led to a split congress, with the Democrats holding onto the Senate and the Republicans holding the house. This means that legislation can only be passed if it has support from both sides of the aisle. The first major challenge came up on 19 January 2023 when the Federal Government reached its Debt Ceiling - the point at which the government is no longer permitted to borrow money to pay its bills. Currently the US Government owes a total of $31 trillion, and 15% of the Federal Government's spending is on interest payments alone. Now that this Debt Ceiling has been reached the US treasury has to use extraordinary measures to keep government running while congress debates increasing the Debt Ceiling to allow for further spending. With a split congress, and a small majority for the Republicans in the House, this represents some challenges. The Republicans have already indicated that they want deep cuts in federal spending before they'll pass any legislation to extend the debt ceiling, and not coming to a resolution soon could result in a government shut down - the point where the Treasury is unable to pay its bills. What are the Implications for Investors? Investors should be aware that this instability could lead to further market volatility and a decline in stock prices as investors become increasingly uncertain about whether or not to invest in the US economy. The inability of Congress to reach agreements on fiscal policy will have a direct impact on economic growth in the United States. …
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Investing and Trading for 2023: Where to for South Africans?
South Africa finds itself emerging from the Global Epidemic and investors have struck a triple whammy of headwinds: A cost-of-living crisis, high inflation resulting in a 350 basis point increase in the REPO rate, and an ailing electricity supply which is hindering economic growth. How the country navigates itself out of this storm will lie in strong economic policies, political will, and a modicum of global stability. This leaves us asking the question: With all this uncertainty, how do we invest our money? Inflation is sticking well above 7% and the South African Reserve Bank may find that it needs to increase rates even further. This makes where we put our money very important as we want to maximise our returns. We can of course let institutional investors handle the money for us, which gives better returns than a savings account, but it often comes at a high price with fees and charges eating into the growth. Taking Charge of your own Money A growing trend has been for investors to take matters into their own hands and manage their investments themselves. Greater control does come with greater risks, but there are many things an investor can do to educate themselves. South Africans are spoilt for choice when it comes to choosing such self-management platforms. While some are operated by local banks, others are dedicated investment sites, local and international. Choosing the right platform can either set you up for success or burn in the long run. There are a lot of fly-by-night platforms which are unregulated and their operations are often quite opaque. Introducing CAPEX.com CAPEX.com is a fairly new entrant into the market, launching in South Africa in 2021. It’s a global platform available in multiple regions across the globe and licensed in all territories in which they operate. Here in South Africa they are registered with the Financial Sector Conduct Authority (FSCA). This means they are a fully regulated platform with checks …
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FTX Collapse? You can still make money with Crypto …
The collapse of the world’s second biggest Cryptocurrency exchange has created ripples in the investment market, with many people asking if investing in Crypto is worth the risk. Cryptocurrency is notoriously volatile and many people are cautious about putting their hard-earned money into buying coins and tokens. But does that mean it’s not possible to make money with cryptocurrency? Not at all. While the volatility in cryptocurrencies can result in losses, it can actually benefit the savvy investor. Online brokerage websites, like CAPEX.com, allows investors to use contracts-for-difference (CFDs) to trade on volatile markets. How does this work? Contracts for Difference means that you don't actually buy or sell the underlying asset. Instead, you're predicting whether its price will rise or fall over a period of time—and if your prediction was correct then you will make profit. This kind of investing has some advantages over traditional trading: You don't have to pay any transaction fees when you buy and sell CFD contracts (although spreads still apply); this means that they're particularly appealing if you're just starting out and want to try out different strategies before committing to them. These contracts can be bought and sold multiple times during their lifespan (which can last up to three years), which means that you don't have to wait until the contract expires before moving on from your original investment strategy if it isn't working out for you as hoped! A key feature of trading in CFDs is that you can make money even when prices go down instead of up. This is because when prices go down, there's more chance for them to go back up again than there is for them to stay down forever—so if you buy at a low point and sell at a high point (or vice versa). Another advantage is that CFD trades are extremely liquid—they can be settled within minutes at a time when you're ready to cash out your profits or losses from your investment. As …
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Capex Opens Doors for CFD Trading in South Africa
Johannesburg - International online brokerage platform CAPEX.com is making it easier than ever for South Africans to trade in Contracts for Difference. This news was announced by Jack Edwards, Marketing Manager for CAPEX.com in South Africa. Contracts for Difference (CFD's) are a type of derivative that functions like a stock, but trades like an option. They can be bought or sold on any underlying asset, which could be an index fund or an individual stock. CFD's are priced according to their underlying value and not the price of the instrument itself. This means that prices can move separately to that of the asset being traded. CFD's also differ from normal stocks because they do not have voting rights or dividends; they only reflect price movements of the underlying asset. In addition, CFD's are leveraged instruments, meaning that a small investment can control a much larger position in terms of profit and loss. "CAPEX.com is a well-respected online brokerage firm which has been allowing investors trade in Contracts for Difference since 2016. We are excited to be able to offer this service to South Africans and we look forward to helping them trade more efficiently and effectively," says Edwards. "The company also provides a range of other services, including Forex trading and a variety of CFD's on commodities, ETFs, indices and crypto-currencies." CFD's are leveraged products which allow investors to control larger positions than their initial investment allows. This flexibility is what makes CFD's so attractive for traders, as it gives them the ability to mimic the performance of an asset without having to actually purchase it. Also, be aware that trading leveraged products involves significant risk of loss. Another great advantage of working with CAPEX.com is their free Training Academy. “Anyone can open up a free account with CAPEX.com and use our Training Academy and Demo Accounts to practise their skills before using real money in …