Xcelerating Minds

Journey from Good to Great
Essentials for Getting to the next level
Finance for Entrepreneurs at Emerging Corporates (SMEs)
Raising Capital from Private and Public Sources

Have you been looking to raise capital either equity or debt to grow and expand your business.
Do you feel raising debt capital from banking sector (generally being collateralized) is a significant challenge. Alternative sources of debt are exorbitantly expensive.
Do you feel equity capital from Private sources (Private Equity and Venture Capital) is emerging fast in the country. But, you don’t know how this whole stuff works.
Do you feel SME platforms of Bombay Stock Exchange and National Stock Exchange may help you raise capital from public in a much more simplified manner (some SMEs have already raised capital from these platforms) but you don’t know how does it work.

Various sources of finance for the companies – Public and Private Markets
Consideration in various financial instruments – Equity, Debt, Preference Shares, Convertibles, etc.
Structure of VCs/PEs and their mandate
Focus of VCs/PEs – Their thought process on financing companies
Perspective of VCs/PEs while providing funding
Considerations of companies while sourcing PE/VC funding
Preparation of information memorandum
Financial data – important ratios and sensitivity analysis
A typical deal process and time lines
Valuation approaches - Discounted cash flow, Relative Valuation etc.
Legal framework and exit routes
Nuances of raising capital from SME platforms of BSE and NSE
- Eligibility criterion for raising capital
- What amount can be raised
- What is the process flow and time lines
- How to prepare for IPO through SME platform
- What are the costs involved
- Who all to facilitate the process intermediaries involved in the IPO process
- How is this platform different from BSE/NSE main platform
- How can companies migrate from SME platform to BSE/ NSE main board.
- Case study of already listed companies on BSE/NSE SME platforms

What are the various sources of funds (long term and/or short term) along with their competitive advantages and dis-advantages?
How to analyze my business performance and also carry out comparison with peers in the industry?
What are important financial parameters, top people need to focus on?
What is the value of my business and how to enhance this further?

Sources of capital for businesses – Public and Private Markets
Consideration of various financial instruments – Equity and Debt
Uses of capital – long term assets and working capital
Thought process and perspective of lenders and/or equity investors – IPO, Private equity, Individual private investors.
Broad understanding of business financials – Profit and loss account, Balance Sheet and Cash Flows
Performance Analysis – important financial parameters/ratios and their implications
Sources of value in a business – Earnings and Assets
Broad sense of valuation of business – Earnings based and Assets based
Simple ways to enhance value of businesses
Understanding implications of corporate actions like dividend, bonus, split etc.

How “Preparedness of Mindset” is a pre-requisite for building great organizations
How to build a great team while there are cash flow constraints
How to create scalable business through institutionalization of organization structure
How to raise capital (Equity and/or Debt) by becoming a deserving candidate
What important financial factors to focus on
How to build a strong value proposition for customers
How to escape competition through differentiation
How good governance adds value to business in long run
How to build valuations and unlock them over a period of time
How change in positioning and Branding changes valuations

How do we become a deserving candidate for capital (from Banks, private investors and/or public)
How do we become a honey-pot for attracting and retaining great talent
How do we structure our business model to attract customers
How would good governance add value to business and valuations
What is the opportunity cost of not doing right things

Fund raising – Private and public markets

Capital is fuel for any business. Both debt and equity have their positives and negatives. We will dwell on broader issues with regard to capital structure (existing and future), various sources of finance for a business and their long term impact (ownership, liquidity, cost, exits etc.). We will discuss - what investors and bankers look for in businesses and how to position the pitch to them.

Both BSE and NSE have launched SME platforms for listing of emerging corporates/SMEs in 2012. Benefits of listing are many in terms of access to capital and improved perception of stakeholders in business. Already, there are several companies listed on these two platforms. How can these platforms help you raise capital and unlock real value of your business?
Credit rating – Value add by credit rating

Credit rating is a pre-requisite for many businesses, when it comes to raising debt. It is good to understand how rating agencies look at businesses and how can corporates improve their credit rating. Another important aspect of discussion would be how does credit rating create value for the businesses.
Growth and scalability – Important considerations

Growth and scalability are most magical words for promoters, investors and lenders alike. However, businesses need serious thinking on organic vs. inorganic growth (growth through acquisition) and corresponding strategies. Growth and scalability may demand infusion of significant resources (capital and otherwise) before businesses see profitability. Businesses need to focus on brand management, market positioning, customer outreach, customer engagement and distribution network.
Mergers and acquisitions (Buying/Selling of businesses)

Inorganic growth may be accomplished through acquisition of businesses. Similarly, after a stage, promoters may not be interested in running a business or may be interested in doing something else. Both these situations demand a suitable match post the strategic deliberations and end to end closure of transactions. Motives, process and major challenges would be the focus of our deliberations here.
Business transformation– What triggers this and how to approach

“Restructuring”, “Cost-Cutting”, “Downsizing” etc. are buzz words in corporate circles from time to time. Sometimes, even successful and well run companies encounter difficulties as a result of hyper competition, market volatility, downturn in economic cycles and other factors beyond their control. During these times, quick assessment of challenges and unemotional decision making becomes key to survival in short term and profitability in long-term.

Business transformation gets sparked with change in thought process of promoters. Number of times, it just demands more organized approach to business and setting up priorities well, focusing on few things and saying no to others. Businesses need to focus on improving health, and, resultantly enhance their valuations. Focus of discussion here would be key drivers of business transformation.
Talent improvement – How does it add value

Business environment is becoming increasingly complex and making many of us redundant at an amazing speed. Yesterday’s competencies are no more value adders. Accordingly, both individuals and organizations need to be learning machines. Further, focus of learning has to be on building conceptual clarity, a broad perspective and ability to handle situations with clear focus on solutions.
Professionalization of family owned enterprises (Organizational restructuring)

Most of the businesses in India are family owned. At some level in their life cycle, promoters feel the need to infuse talent from outside to enhance competence and continue on the journey of growth. Indeed, investors/lenders also want to see management breadth before committing capital. We will discuss importance of credible sounding board, segregation of ownership and management, setting up human resource systems (recruitment, key result areas (KRAs), appraisal etc.), setting up Standard Operating Procedures (SOPs) for each department/vertical and Management Information Systems (MIS) etc.

Another area of debate with Family Owned Enterprises is succession planning. One has to ensure transition of business from one generation to another is smooth and the interest of retiring generation is well protected.
Risk management – why it is critical

World markets have witnessed unprecedented moves across the asset classes – Commodities, Securities, Currencies and Rates etc. Top managements, across the businesses, has voiced concern on the subject of risk management. Implications of changing asset price dynamics in the market place are many – For instance, increasing commodity prices and inability to pass on the escalated prices to customers, because of competitive pressures, infuses uncertainty in cash flows and squeezes profit margins. Similarly, sometimes, unexpected currency moves may evaporate profit margins on sale and jeopardize very existence of organizations.

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