At Elaxtra Advisors, we connect with companies at varied maturity levels, from young organizations to mature corporations. As companies evolve, they need different capital solutions to scale and continue to grow.
We want to share an oversimplified approach to private capital raising for small companies to provide a framework of how a founder can think of their capital needs based on the maturity stage of their business. Not all cases will fit this super simple viewpoint, but let's examine it.
When founders start a business, they do not have revenue streams in place and are looking for product-market fit. They typically have an unproven business to start. It is common at this stage to raise capital from friends and family members or from angel investors. This initial category of investors backs an unproven idea with potential. Angel investors are not typically organized into firms but invest independently. These would be the smallest checks a founder gets early on.
As the business proves itself and the company finds some product-market fit, customers start to pay for its products or services, and the business starts to have revenue. Founders may burn cash, but unit economics is potentially good enough to scale the business. Regardless of the stage (seed, series A, etc), venture capital firms are stepping in to back strong founders and high-potential ideas that show traction to take the company to the next level. Depending on multiple factors, venture capital checks can range from a single million to low double digits.
Lastly, as the business continues to scale, generate revenue, and derive profitable activities, private equity steps in to help the company continue to scale. Alten Capital fits into this "profitable growth" stage by investing in profitable high-growth technology services companies. Valuations and investments are higher at this stage than in the two previous stages mentioned.
We hope this uncomplicated view can help founders decide when to reach out to us to build a partnership. At Elaxtra Advisors, we want to support founders and management teams in scaling technology services businesses.
Are you interested in exploring how we can support your business growth? Please contact us at Elaxtra Advisors to start the conversation.