One of the first questions when considering a capital raise is: how long will it take?
There isn’t a fixed timetable.
A straightforward debt raise for an established business can look very different from an equity raise involving multiple investors and a full due diligence process.
As a general rule, businesses should think in months rather than weeks, particularly when raising external equity.
Starting early gives you more choice and reduces the pressure to accept funding simply because the business needs capital quickly.
A typical fundraising process
For an equity raise, the process might look something like this:
| Stage | Indicative timeframe |
| Preparing the business and investment materials | 2 to 6 weeks |
| Identifying and approaching investors | 4 to 12 weeks |
| Investor meetings and negotiations | 2 to 8 weeks |
| Agreeing headline terms | 1 to 4 weeks |
| Due diligence | 4 to 10 weeks |
| Legal documentation and completion | 3 to 8 weeks |
These stages can overlap, so they shouldn’t simply be added together.
A well-prepared process with an interested investor can move relatively quickly. Other raises may take six months or longer, particularly if finding the right investor takes time.
What affects how long a fundraise takes?
The biggest variable is often how easy the opportunity is for an investor to understand.
A business with clear financial information, a compelling reason for raising capital and realistic valuation expectations is easier to assess.
Delays often arise when financial information isn’t ready, forecasts keep changing or the amount being raised doesn’t have a clear connection to the business plan.
The type of investor also matters.
An individual investor may have a relatively simple decision-making process. A private equity or institutional investor may have investment committees, more extensive due diligence requirements and a formal approval process.
Finding investors can take longer than expected
Getting in front of investors is one thing. Finding the right investor is another.
An investor may like the business but not the sector.
They may invest at a different stage.
The cheque size may be wrong.
They may already have a competing investment.
Or the timing may simply not work for their fund.
This is why a fundraising process usually involves speaking to multiple relevant investors rather than relying on one conversation.
How long does debt funding take?
Debt funding can sometimes be quicker than raising equity, particularly for an established company with strong financial information.
The lender will still need to assess the business, its cash generation, existing borrowing and ability to service the proposed debt.
Larger or more complex facilities can require financial due diligence, security arrangements and legal documentation, which can extend the process.
If funding is required for a specific acquisition or transaction, the lender’s process will also need to fit within the wider deal timetable.
Due diligence can affect the timetable
Once terms have been agreed, an investor or lender may carry out financial, legal, commercial, tax or other due diligence.
How quickly this progresses depends partly on how prepared the business is.
If information is organised and management responds quickly to questions, the process can move efficiently.
If contracts are missing, financial information needs to be rebuilt or unexpected issues emerge, the timetable can extend significantly.
Don’t wait until you need the money
One of the most difficult positions is trying to raise capital when the business is close to running out of cash.
It weakens your negotiating position and reduces your ability to wait for the right funding partner.
If you know the business is likely to require external capital, start preparing well before the money is actually needed.
That doesn’t necessarily mean approaching investors immediately.
It means getting the financials, forecasts, investment case and supporting information ready so you can move when the time is right.
Give yourself time to find the right partner
The objective isn’t simply to complete a fundraise as quickly as possible.
If you’re raising equity, the investor may become a shareholder in your business for several years.
Their expectations, approach and ability to support the company matter.
A few additional weeks spent finding the right partner can be far more valuable than rushing to complete with the first source of capital available.
Raising capital through The Brokerage
The Brokerage connects businesses looking to raise capital with investors and funding partners actively looking for opportunities.
Create your capital raise profile to present your opportunity, outline the funding you’re seeking and connect with investors whose criteria match your business.