Equity Capital

We help investors find investment opportunities

Equity capital is often required when more traditional debt financing is unavailable or inappropriate for a company’s needs. Welch Capital Partners Corporate Finance (WCPCF) help investors find attractive investment opportunities, while helping companies raise capital to reach their business goals (e.g., market expansion, acquisitions, or injecting new capital into their existing shareholder structure). The team’s rigorous approach ensures that you’re well prepared for investor discussions and diligence.

WCPCF is a wholly owned subsidiary of Welch Capital Partners and is affiliated with Welch LLP, one of Canada’s oldest and most trusted accounting firms.

Exempt Market Dealers

WCPCF is an exempt market dealer (EMD).

EMDs help investors find attractive investment opportunities, while helping companies raise capital to reach their business goals in the exempt market. Exempt market products are sold in private markets rather than on a public exchange or stock market.

Benefits of working with an EMD
  • Legal protection: EMDs are licensed and required to meet compliance and regulatory standards set by securities regulators in each jurisdiction of Canada.
  • Peace of mind: EMDs are managed by securities professionals who adhere to high standards of operational compliance and client service. EMDs are accountable for their compliance practices, acting in good faith and the best interests of their clients.
  • Proficiency and transparency: EMDs must pass a proficiency exam. They’re also required to follow a strict code of conduct and proper client processes to ensure fair and transparent service.
  • Best practices: EMDs are required by law to have audited financial statements, a minimum of $50,000 working capital, and insurance to cover a wide range of client and dealer issues. They’re also required to send you periodic statements on any transactions they undertake on your behalf.
  • Dispute resolution: If you encounter any issues with your EMD, the firm will have internal mechanisms to address your concerns. WCPCF is a member of the Ombudsman for Banking Services and Investments (OBSI) in the unlikely event that dispute resolution is required.
Why you might need equity capital
WCPCF works with companies that are growing or undergoing a transition. If you need capital to introduce a new product line, expand into a new location or grow through an acquisition, WCPCF help investors find attractive investment opportunities, while helping companies raise capital to reach their business goals.
In some cases, companies seeking equity capital may need new investors to replace existing shareholders or investors. Common situations include:
  • death resulting in the need to liquidate the estate’s position
  • bankruptcy of a shareholder
  • breach of a shareholders’ agreement
  • cessation of employment
  • falling out between shareholders
  • desire to divest and move on from the company
These situations can be complex and require a thoughtful approach. The WCPCF team can help to clarify the process and find investors to help the transition go more smoothly.
Equity capital raises
An equity capital raise is a situation in which you sell shares in your company to secure funds from third-party investors. Equity capital raises help companies grow without incurring debt. In some cases, companies could absorb a combination of debt and equity capital to achieve their goals.

Types of equity

One of the first decisions you’ll need to make is the type of equity shares to offer investors.

Equity can take many forms, including common equity, preferred equity and convertible debt. All of these types of equity provide an ownership percentage of your company to investors in exchange for their funds. The type of equity you offer investors can have an important impact on your ownership structure, level of control and the ultimate value of your business.

Below are the more standard structures for these types of equity. The structure of any equity offering can be customized to your needs.

Common equityPreferred equityConvertible debt
Voting rights
Liquidation preference
Economic risk
Limits on econmic return
Dividend income
* Unless converted to common equity.

Common equity is usually held by founders and employees of a company. Providing this type of equity to investors gives them a variety of rights, such as voting rights, control rights and economic rights. Common shares typically rank behind debt and higher-priority equity shares (e.g., preferred shares). However, common equity holders can participate in the growth of a company and receive their value from dividends and proceeds when the company is sold.

Preferred equity is often given to shareholders who want to have a priority economic right over common shareholders. The attributes of preferred shares can vary greatly. Preferred equity shareholders are typically non-voting and have priority on the distribution of dividends or proceeds if the company is sold. They also usually receive a fixed dividend.

Convertible debt is a quasi-equity loan that starts out as an interest-bearing loan to the company. It can convert to equity as a result of a “liquidity event,” such as a new financing round or at maturity.

A convertible note balances the risk of investors and shareholders. If a company continues to grow and has prospects for further growth when a convertible note becomes due, investors will usually want to convert the loan into equity so they can continue to participate in this growth.

For more information on the type of equity that might be best for you, contact us.

How to raise equity capital

Preparing for raising equity can be time-consuming and challenging. You’ll need to take a strategic approach to ensure you’re ready. With WCPCF as your advisor, you can be confident that you’ll receive the guidance you need.

Your financial position includes your company’s revenue, expenses, cash flow and overall financial health. You should also have a clear picture of your financial needs and how you plan to use the investor funds. This information will help you determine the amount of funding you need to raise and the type of equity you offer.
A well-written business plan (or pitch deck) is essential for attracting investors and securing the capital you need. Your plan should include your company's mission and a detailed description of your products or services, target market and competition. It should also include a detailed financial plan, including your projected revenue, expenses and cash flow, as well as your long-term growth strategy.
Building the financial plan, or financial forecasts, is a complicated and intensive process. Ideally, your forecasts should provide a roadmap of the execution of your business plan from a financial point of view. They must be integrally aligned with the company’s strategic objectives and growth plan. Your forecasts will also form a basis for the valuation of your company, which will be used to price the deal for investors.
Investors will want to see that your company is led by competent and experienced professionals who have a clear understanding of your business and the market you serve. Including additional team members with expertise in finance, law and accounting will help you navigate the equity capital raise process.
Gaining a thorough understanding of the current shareholder dynamics will help the WCPCF team do its job better and anticipate what investors will look for. All current shareholders will need to agree on the plan for the equity capital raise. Your rationale for the equity capital raise must be clear and well-articulated.
To identify your target investors, you’ll need to consider various factors. Think about the type of investor you're looking for, such as strategic investors, growth equity funds or family offices, and the size of the investment you’ll need. Consider the investors’ investment philosophy and their past investments to ensure they align with your company's goals and values.
The WCPCF team takes a focused and targeted approach to finding investors. Doing adequate research and selecting the most appropriate investors makes the process as efficient as it can be. Ideally, this approach will result in multiple interested investors, which increases your chances of getting the best deal.
Once you start receiving investment offers, the WCPCF team helps you analyze them to ensure they provide you the best outcome. The team works with your advisors (legal, accounting and tax) to ensure that the investment terms are beneficial to you and helps you secure the cash you need.
The WCPCF team will collaborate with your other advisors (legal, accounting and tax) and help you through due diligence and to a successful close. Investors conduct various types of due diligence, including the following:
  • Financial due diligence: Like an audit, this investigative analysis evaluates the financial performance of your company and its prospects for the future. It also ensures the financials provided are true and there’s no significant variance.
  • Legal due diligence: This assessment reviews all the legal risks associated with your company.
  • Operational due diligence: This review of the operational aspects of your company is tailored to the deal. It identifies potential post-merger synergies and other integration issues and opportunities.
  • Tax due diligence: This analysis identifies potentially material tax exposures. Depending on the nature of the transaction, this review may be thorough or limited.

Equity Capital News & Resources

June 7, 2023
Are you an Accredited Investor?

In Canada, an accredited investor is defined under National Instrument 45-106 Prospectus and Registration Exemptions. Accredited Investors are able to purchase securities not offered under prospectus. This exemption is intended to recognize that accredited investors have the means and knowledge to protect their own interests in investment transactions.

May 30, 2023
EMD – So What?

Welch Capital Partners, via its wholly owned subsidiary, Welch Capital Partners Corporate Finance (“WCPCF”), recently received its Exempt Market Dealer (“EMD”) license. What exactly does this mean?

May 18, 2023
Best Practices for Raising Capital

In today's market, many companies often need to raise capital to grow their operations and to achieve their long-term goals. Whether it is to fund new product development, expand into new markets, or acquire other companies, raising capital is a critical part of the business development process. However, preparing for a capital raise is not a straightforward process, and companies need to take a strategic approach to ensure they are ready.

Our investor network

Our North American investor network aims to invest at least C$5 million in strong and growing businesses. The network is looking for companies that want to accelerate their growth.

Investors want to see revenue and profitability expand, which supports a healthy return on investment. They evaluate risk in terms of management’s ability to execute on the growth plan.

WCPCF’s network of investors includes high-net-worth individuals, family offices and growth equity funds. The WCPCF team will bring the right investors to the table to get you the equity capital you need.

Are you an investor looking to invest in private companies in Canada and the U.S.?

We’d be happy to learn about what you’re looking for and to talk through some of our existing deals. We always find it best to work through live deals so we can curate what we bring to you.

If you want to learn more, please fill in the form below:

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How can we help?

Contact us for information on our services and how we can help you.