Through the firm's sector focus, Silverwood understands the fundamental strategic and execution issues faced by the firm's clients. With the benefit of many years of investment banking experience, Silverwood's principals also understand the objectives and perspectives of institutional investors. Silverwood aims to bridge strategically between the standpoints of issuer and investor.
For clients, Silverwood utilizes sector knowledge and investor understanding to thoroughly prepare an issuer for the institutional capital raising process. This is accomplished by (i) shaping the presentation and positioning of a client to more closely fit with the expectations and objectives of institutional investors and (ii) assisting a client in anticipating questions and issues that will arise during investor review and due diligence so that considered responses can be formulated and known issues addressed in a proactive manner.
Silverwood has a flexible approach to private placements and the firm's engagements range from being the exclusive financial advisor and managing all aspects of transaction preparation and execution to acting in a non-exclusive capacity and contacting selected investors where Silverwood may have a strong relationship. Under any approach, Silverwood provides assistance in two important areas:
- Expand Distribution of a Private Placement
Silverwood is an access point to a qualified group of institutional investors that include leading venture capital firms, insurance companies, strategic investors, and other sophisticated providers of private equity. Silverwood can broaden the distribution of a private placement by accessing the firm's contact network.
- Strategic Financial Advice for a Private Placement
As a strategic financial advisor, Silverwood interfaces between a client's particular circumstances and the requirements of the institutional investor. The firm's role is to assist its clients in preparing for and implementing the institutional capital raising process such that the potential of each investor contact or meeting is realized to its fullest extent.
Silverwood advises companies seeking capital from institutional investors and not individual or angel investors. The firm provides advice to companies that require at least $5 million in a Series B or later financing, have a substantially complete product, have a fully developed business plan, have a complete management team, and have 4 to 6 months of cash available.
Private Placement Success Factors
It is not enough to get an initial meeting with a potential investor. Between the initial meeting and a successful closing are many months of negotiations and in-depth due diligence. A successful placement requires engaging multiple investors in additional discussion and due diligence after the first contact, converting that interest into term sheets, and managing a group of professional deal makers through to a transaction closing.
A number of factors strongly influence success in the institutional capital raising process:
- Compelling investment thesis
- Thorough preparation in advance
- Clear, consistent communication of investment thesis
- Comprehensive marketing program
- Managed process and sense of competition
- Proactive responses to investor questions and due diligence