Raising capital is when any investor or a lender gives funds to assist with starting, growing, and general day-to-day operations.
- Acquisition Financing Loans
- Leveraged Buyout (LBO) Loans
- Syndicated Loans
- Bridge Loans
- Project Finance Loans
- Mezzanine Loans
- Revolving Credit Facilities
- Asset-Based Loans
- Real Estate Development Loans
- Corporate Restructuring Loans
- Equity Offering Loans
- Working Capital Loans
- Trade Finance Loans
- Structured Finance Loans
- Secured Loans
- Unsecured Loans
- Collateralized Loan Obligations (CLOs)
- Equipment Financing Loans
- Infrastructure Financing Loans
Entrepreneurs struggle with raising capital and consider it a burden. Raising capital is an essential step for entrepreneurs, founders, business owners, or anyone looking to start a business.
Smart Contract Equity Financing
In simple terms, smart contract equity financing is selling a portion of a business in the form of tokenized stock to investors or lenders in exchange for funds in order to operate and grow the company. This type of financing has been popular amongst entrepreneurs seeking to raise capital and pitch their businesses to a group of investors.:
“I’m asking for $xxx in exchange for x% shares of my business.”
Smart Contract Debt Financing
Any company can raise debt through personal and bank loans, tokenized lines of credit, tokenized bonds, or convertible smart contract notes to service their fundraising efforts. These creditors are not investing in the business, but rather providing capital with the expectation for it to be repaid with interest, it is important to make sure the company is generating sufficient revenues to support the repayment and interest obligation before settling for a conventional loan.
Convertible Mutual Credit
This form of financing was created to connect the procedure of converting debt to equity financing. Initially, it functions as traditional debt; however, it has the option to be converted into the company’s equity in the future through a smart contract. Depending on how the smart contract agreement is written, convertible debt has certain provisions, or triggers, that determine when the debt can be converted into tokenized equity.
SAFE Smart Contract Notes
The well-known capital raising structure is referred to as a SAFE Note. SAFE is an acronym that stands for Simple Agreement for Future Equity. It functions similarly to Convertible Mutual Credit as convertible debt (less the interest). A SAFE Smart Contract note is where an investor gives upfront capital in exchange for tokenized equity in the future upon reaching certain triggers, such as closing a round of financing. It was created by the startup incubator Y Combinator as a way to fund the businesses that successfully grow from their program. Using SAFE Smart Contract notes by Shelton Estate & Co. is a great way to generate initial funding, except similar to using convertible Smart Contract Notes, it is important to understand the conversion terms before signing the smart contract agreement.
Smart Contract Investors vs. Traditional Lenders
Another important thing to understand is the difference between smart contract investors or lenders and traditional lenders. Smart Contract Investors & lenders buy tokenized stock and notes in companies & projects with the expectation that the business or project will sell, go public, or at least produce healthy dividends later. By allowing funders to invest, you give up ownership in your business, but smart contract investors and lenders can provide resources besides just capital, but as things such as networks, mentorship, and business advice. Since smart contract investors and lenders have skin in the game, they’ll want the business to succeed just as much as you do. Traditional lenders give companies money upfront as well, with the expectation to be paid back with interest in a timely manner, but they typically don’t provide any other resources and or other beneficial participation in the company’s development.
Smart Contract Private placement services
Our capital raising projects, Shelton Estate & Co. manage highly effective smart contract transaction processes for closely-held private companies that are in need of capital in order to achieve a number of different strategic objectives.
Our capital raising strategy is similar to our Smart Contract M&A advisory project, with deal-by-deal strategic planning and preparation to understand our client’s goals in a smart contract financing transaction. We curate top-rate marketing materials and a solid potential lender or investor list to ensure that the client’s message is being effectively sent to the proper audience. All contact with prospective lenders or investors is handled by our professionals, and we also manage meetings, negotiations and due diligence all the way until closing. We professionally manage every step of the process with rigorous attention to detail, thus allowing our clients to focus on running their businesses. Strick confidentiality is maintained throughout the process.
Smart Contract Senior debt placements
Senior debt is typically sourced from national banks, regional banks, and other specialty lenders. The debt may come in various forms, including revolving mutual credit facilities, tokenized term loans, and unitranche facilities. It is common for at least a portion of senior debt to be secured by a company’s assets.
Smart Contract Subordinated debt placements
Tokenized subordinated debt is an unsecured smart contract debt instrument provided by private investment funds. While typically priced higher than senior debt, subordinated debt is an attractive, flexible source of capital for companies that have no further access to senior debt and prefer to avoid the dilutive effects of equity financing.
Smart Contract Private equity placements
Tokenized Private equity is an attractive form of financing for companies seeking flexible capital terms from a value-add partner. Tokenized private equity is typically sourced from private investment funds, family offices or other alternative investors. There is a vigorous private equity market for nearly every situation, ranging from start-up companies to mature, and established companies.
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Shelton Estate & Co 