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As the CFO of an emerging company, you find that you are in need of about $20-25 million in the near future. Your company is privately owned, and you have not used outside venture capitalists or other sources of investor-supplied capital, up to this point. Your sales prospects are excellent, and you expect to be selling twice your current sales volume of $25 million in the next two to three years. The company is currently profitable, and has been, almost from the start of business, four years ago. You sell proprietary products in the hospital and nursing care field.

Discuss the strategy you would use to obtain the necessary financing to support the expected future growth. Include your reasoning for your choice of investor to supply the necessary funds.

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As the CFO of an emerging company, you find that you are in need of about $20-25 million in the near future.

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The strategy that I will pursue to obtain the necessary funding will be a mix of debt and equity. As my company has been quite profitable in the past and has good sales prospects in the near future, I can consider diluting some equity in the company by obtaining funds from private equity investors. This strategy will yield couple of benefits. First of all, I ...

Solution provided by:
Sheetal Jain, PGDM
Education
  • BComm, University of Delhi
  • Post Graduate Diploma in Management (Equivalent to MBA), All India Management Association
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