Mathematics has a precision and clarity that enhances understanding and nowhere is it more apparent than in the financial model for a company, strategy or product line. The detailed assumptions in every financial model highlight the key risks in the business, identify the factors that most influence cash flow and highlight future management KPIs. Properly designed models allow for alternative scenarios to be evaluated in terms of profitability, ROI and capital required. Staffing plans, working capital requirements and marketing plans can also all be developed in a well-designed financial model.
Client Engagement For a robotics company GH Growth Advisors developed a five-year financial model to evaluate the effect of different staffing plans on the amount of venture capital to raise. The company realized that it needed to restrict the increase in administrative staff and invest more in sales people in order to reach certain milestones.
Many entrepreneurs feel constrained by capital availability. While a financial model will quantify future capital requirements, in financial planning alternative capital structures and types of capital are evaluated in terms of cash cost, flexibility and covenants, ownership dilution, out-of-pocket closing costs and probability of funding.
Client Engagement For a Mexican company GH Growth Advisors helped the client fund their growth through advanced commission payments rather than pursue the more traditional sale of equity.
Most companies do not routinely make acquisitions and consequently typically lack in-house expertise. We serve clients on the buy side by providing three services:
- Due diligence
The greatest risk in an acquisition is in the due diligence, where important operational, contractual and technical issues can have negative consequences far greater than over paying.
Client Engagement For one of the largest privately held companies in the Caribbean, GH Growth Advisors has worked on over 15 acquisitions.
Most companies raise capital periodically and therefore lack current knowledge of market conditions, new instruments and current costs. Capital raising my require:
- Determination of the capital requirement and type of capital required
- Preparation of investor pitches and presentations
- Negotiation of definitive agreements
- Arrangement of senior debt
- Arrangement of mezzanine debt
- Arrangement of equity and venture capital
The cost of capital is never as important as the availability of the funding. Cash on hand allows for a company to pursue a strategy without concern for current economic conditions, execute unplanned events and demonstrate greater confidence toward stakeholders.
Client Engagement The Managing Director of GH Growth Advisors has raised over $1.2 billion during his career.