Growth capital for founders

Vesparum is an independent capital raising advisor to growth-stage founder-led Australian businesses.

For founders

Our services are tailored to minimise dilution for founders with significant equity ownership.

Specific expertise

As founders ourselves, we specialise in crafting equity stories that resonate with investors.

Capital raising specialists

Unlike other advisors that prioritise M&A, we work exclusively as capital raising advisors.

Track record of success

10+ year track record supporting Australian businesses

$500M⁺

Capital raised for Australian companies

50⁺

Successful capital raisings completed

$10M⁺

Average capital raised per transaction

90^%

Clients from referrals

FOR FOUNDERS

The capital raising process

01 Decide to raise capital

The decision to raise capital is one of the most difficult decisions a founder will make. Raising too early could result in excessive dilution, whereas raising too late could result in missed opportunities. Getting the timing right is essential to maximising the value of your equity over the long term. We work with you to think through this decision prior to any formal engagement.

02 Appoint an advisor

You have done the hard work in building a successful business, and have generated millions of dollars in equity value. Hiring the right advisor can help to de-risk your capital raising and minimise dilution. Advisors can help you to articulate a more compelling equity narrative, distinguish genuine inbound investor interest, expand your investor network and enhance your valuation by creating competitive tension amongst investors. Working with an advisor can also give you leverage to focus on growing your business during the capital raising process, a time when investors are looking closely at your monthly performance as an indicator of whether you will achieve your forecasts.

03 Position your business

You only get one chance to make the best first impression with investors so it is essential to invest significant time in preparing for a capital raising. We work with you to prepare an investor presentation and financial model to position your business, growth plans, financial metrics and financial forecasts in a coherent and compelling narrative to maximise interest from investors. A properly articulated equity story can make a significant difference to the valuation of your capital raising.

04 Create competitive tension

Valuation is highly subjective and is often influenced by competitive tension between investors. Competition is not a result of comparing inbound interest from a few calls or emails, but considering the whole market and proactively approaching the most relevant investors. We identify and target the most relevant investors for your company, leveraging our extensive network of investors seeking exposure to private Australian growth-stage companies. We manage communications and negotiations with all investors to ensure they feel the competitive nature of the process to support the best possible transaction outcome. By acting as an intermediary, we protect you from difficult discussions during term sheet negotiations, helping you to maintain strong relationships with your shareholders post-raise.

05 Navigate due diligence

Due diligence can be time consuming and risky if not managed well. Preparing early and thoroughly for due diligence is important to minimise the risk of any surprises which could disrupt the deal. We help you stay out of trouble during due diligence, providing counsel on when to give certain information and how best to frame difficult issues. We perform the heavy lifting by cleaning raw data files, managing a data room, communicating with third parties and preparing responses to questions from investors. Knowing when and how to share key information at each stage of the process is crucial to ensuring a smooth, successful transaction.

OUR CLIENTS

Growth-stage, Australian companies

Series A

Series A companies show strong early revenue traction and are establishing product-market fit.

‍Series A capital provides these companies with additional runway to prove out their business model.

Scale: Annual revenue > A$3 million
Profitable: Uncommon
Investment size: A$3-15 million
Founder sell-down: Uncommon

Series B

Series B companies have strong product-market fit, a proven business model and are focused on scaling up their operations.

Series B capital allows these companies to significantly increase their headcount in preparation for their next phase of growth.

Scale: Annual revenue > A$10 million
Profitable: Sometimes
Investment size: A$10-50 million
Founder sell-down: Sometimes

Growth equity

Growth equity companies are profitable with predictable revenue streams.

Access to external capital allows these companies to accelerate growth through specific initiatives, such as developing new products, expanding into new markets or acquiring other businesses.

Scale: Annual revenue > A$10 million
Profitable: Yes
Investment size: A$15+ million
Founder sell-down: Optional

Frequently asked questions

Why do I need an advisor to raise capital?

An experienced capital raising advisor will:

Improve your equity story such that it appeals to your target investors
Introduce you to the most relevant investors for your company
Help you to navigate which inbound investor interest to engage with and when
Ensure competitive tension during your capital raising process to optimise valuation and terms
Help you stay out of trouble during due diligence, providing counsel on when to give certain information and how best to frame difficult issues
Perform the heavy lifting during due diligence (e.g. cleaning raw data, managing a data room, communicating with third parties)
Help you to push back on onerous reporting requirements and approval thresholds from shareholders
Allow you to remain focused on your business rather than needing to pause everything to focus on raising capital

The right capital raising advisor will add significantly more value than the fees they charge. This can be observed directly in the improved valuation and terms achieved for your capital raising.

What are Vesparum's fees?

Vesparum charges a success fee based on the amount of capital raised. Depending on the extent of preparation required for your capital raising, a one-off preparation fee or monthly retainer may also be applicable.

How long does it usually take to raise capital?

The average capital raising process usually takes between 3-5 months from start to finish, including preparation time. The timeline depends on a number of factors, including what you are solving for (e.g. speed vs valuation), the complexity of your business, market conditions and investor interest.

For companies that are loss-making, it’s ideal to start raising capital with at least 9-12 months of runway left. This ensures you have sufficient time to secure funding, negotiate favourable terms and maintain control of the process without facing unnecessary pressure.

What are the main reasons a capital raising fails?

There are several common reasons why a capital raising might not be successful:

Poorly crafted pitch deck: Founders often prepare pitch decks based on what they think will resonate, rather than focusing on what investors are truly looking for. This can result in too much emphasis on the product and not enough on the business model, market opportunity and financial metrics.
Operational distraction: During a capital raise, founders can become too distracted by the fundraising process, causing operational performance to decline. Investors look closely at monthly and quarterly performance during a capital raising, and any missed forecasts can lead to a loss of confidence.
Unrealistic valuation expectations: Founders sometimes come into the process with preconceived, unrealistic valuation expectations. This can make it difficult to align with investor perspectives, ultimately stalling the capital raise.
Limited investor network: A weak or limited investor network can hinder your ability to secure adequate funding. Relying too heavily on warm intros through your personal network may lead to insufficient interest and/or misalignment with investors.

What are the key metrics that investors focus on for SaaS companies?

Investors typically focus on the following metrics for SaaS companies:

Revenue growth: Investors use year-on-year revenue growth as an important factor in determining a valuation multiple.
Gross profit margin: The percentage of every dollar earned as revenue that you get to keep after subtracting the direct costs required to deliver that revenue.
Annual recurring revenue (ARR): The annual value of all recurring revenue contracts at any point in time.
Net revenue retention (NRR): The percentage of ARR that your company retains for a cohort after a 12 month period, including the impact of churn, downgrades and upsells.
Gross revenue retention (GRR): The percentage of ARR that your company retains for a cohort after a 12 month period, including the impact of churn and downgrades, but excluding the benefit of upsells.
Logo (customer) retention rate: The percentage of your customers that remain after a 12 month period - similar to revenue retention but focused on the number of customers instead of revenue.
Customer lifetime value (LTV): The sum of gross profit expected from a new customer across their entire lifetime, calculated as the average ARR per customer, multiplied by your gross profit margin, multiplied by your average customer lifespan.
Customer acquisition costs (CAC): The amount of sales and marketing dollars beings spent to acquire each incremental customer, calculated as the total sales and marketing costs in a period, divided by the number of new customers added during a period.
LTV/CAC: A ratio for measuring how efficiently your company generates value from sales and marketing.

Every technology company should have a detailed understanding of their recurring revenue by customer by month to support the calculation of these SaaS metrics. It is important to invest significant time in cleaning the raw data to ensure the metrics are accurate and a true reflection of your customer behaviour. This will enable you to understand how best to pitch your metrics to support valuation discussions, as well as stand-up to investor scrutiny during due diligence.

Contact us

We respond to all messages within 24 hours and treat all information you share with us as strictly confidential.

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form.

Contact details:

contact@vesparum.com

+61 3 8582 4800

Our location:

Level 4, 180 Flinders St
Melbourne VIC 3000
AUSTRALIA