The “Cost” of Capital: What You Need to Know about Financing Your Growth

The old saying is true, “There’s no such thing as a free lunch.”

And nowhere is this more true than when it comes to raising capital for your business.

Capital costs.

This means, whatever your growth goals are, it’s vital that you understand exactly what raising capital will cost you: in the short term … and the long.

To help you determine the cost of your capital, here are five questions to ask and answer before you accept a dollar.

1. What is your investment objective and time horizon?
2. What value add do you provide aside from capital?
3. What type of board representation do you expect?
4. Why should we choose you as an investment partner?
5. Why have you chosen us?

Importantly: who are three executives I can call to learn more about your partnership with them.

[This is only the outline for the article. Please check again for the full content. We intend to publish 1 article every month.]

Resources:

HBR – Do You Know Your Cost of Capital?
HBR – A Refresher on Cost of Capital