Capital raising lessons from 15 years of funding ventures

Preparing before you raise capital

I've spent more than 15 years in business across property, clean energy, technology and mining, and capital raising has been a constant thread. I've raised locally and internationally for property developments, technology companies and mining ventures, and capital raising sits at the top of my own list of skills. The industries differ, but the lessons repeat.

What follows is the approach I'd share with any founder or developer about to ask other people for money. It's general, and every raise needs its own legal and financial advice.

Most raises are won or lost before the first meeting. Investors read your preparation as a sign of how you'll run their money. If you can't answer a basic question about your numbers on the spot, they assume there are other gaps.

Before I talk to anyone, I want these in order:

• A financial model you can defend. Clear assumptions, a base case and a downside case. Know which inputs move the result most.
• A clear use of funds. Exactly what the money pays for, in what order, and which milestone it reaches.
• A clean company record. Constitution, share register, shareholder agreements, material contracts, licences and IP ownership. A messy register slows deals and worries cautious investors.
• A data room. One organised place holding the documents an investor will ask for during due diligence.
• Your own commitment. Investors want to know what you've put in, whether that's money, time or both.

Timing matters too. Raising when you're nearly out of cash puts you in the weakest possible position. I'd rather start early, with runway, and keep the option of walking away from terms that don't suit.

Be clear on the amount and the reason for it. Raise too little and you'll be back asking before you've reached the milestone that supports a better valuation. Raise too much and you give away more of the company than you needed to.

Capital raising rules in Australia worth knowing

In Australia, offering shares, units or other financial products to investors is regulated, mainly under the Corporations Act. As a general rule, an offer needs a disclosure document such as a prospectus unless an exemption applies. Common exemptions cover offers to sophisticated and professional investors and small-scale personal offers, and each comes with specific conditions.

Pooling investor money into a property or other project can also create a managed investment scheme, which raises its own licensing and registration questions. There are limits on how an offer can be advertised as well. ASIC publishes guidance on all of this, and reading it before you meet a lawyer helps you ask better questions.

My rule is simple. Engage a lawyer who specialises in capital raising before you pitch, not after you've taken the money. Fixing a non-compliant raise costs far more than doing it properly the first time.

Know your investor before you pitch

A great project pitched to the wrong person is a wasted meeting. My focus has always been on bringing both financial and industry partners on board, and they want quite different things.

• Private and sophisticated investors often back people they know and projects they understand. They value regular, plain-English communication.
• Family offices usually think in longer horizons and care about governance, reporting and how the investment fits their wider holdings.
• Funds and institutions have mandates. If your deal doesn't fit their size, stage, sector or geography, no amount of pitching will change that.
• Lenders focus on security, serviceability and the downside. A lender wants to know how they get repaid if things go wrong.
• Industry partners bring expertise, customers or supply as well as capital. They're often the most valuable partners and the most demanding.

Do your homework before the meeting. What have they invested in before? What size of cheque do they write? How involved do they want to be, and how long can they hold? The best pitch starts with what that particular investor cares about most.

How investors differ across property, clean energy, tech and mining

Each of my four industries attracts capital in its own way:

• Property development typically combines senior debt from a bank or private lender with equity from the developer and investors. Lenders often want presales before funding construction, and investors want to understand the site, approvals, builder, costs and exit.
• Clean energy projects produce measurable output, so investors look closely at generation estimates, contracts and maintenance. I've set out how I think about that maths in calculating solar returns.
• Technology companies often have few physical assets. Their value sits in the team, the product, traction and the market, and they usually raise equity in stages. iQuant Fund, which I co-founded in 2021 and chaired, announced the completion of its Series A round in August 2024. A round like that is a milestone, and it also brings a new group of shareholders to report to.
• Mining exploration has no revenue while it searches, so it's funded almost entirely with equity. Investors weigh the geology, the tenure and the relationship with Traditional Owners and the local community.

Telling your story to investors honestly

Every raise needs a story, and that story has to survive due diligence. Investors will check. If the pitch says one thing and the data room says another, trust goes and rarely comes back.

My approach:

• Lead with the problem and the opportunity, then show the evidence.
• Name the risks yourself. An investor who finds a risk you didn't mention will wonder what else you left out.
• Label projections as projections and keep them realistic. In Australia, statements about future matters made without reasonable grounds can be treated as misleading.
• Don't promise returns you can't control.
• Be open about what you don't know yet.

In my experience, honesty about risk builds more confidence than a polished pitch with no weak points.

Values belong in the story too. I'm a firm believer in keeping Australian profits within the country, and I hold a vision of strong companies that share their profits with their community members. At First Nations Mining Australia, a majority First Nations owned exploration company in the Pilbara working alongside the Yindjibarndi people, heritage consultation and community transparency sit at the core of how the company operates. Investors need to understand that from the first conversation. In my view, the ones who do are the right partners.

Structuring a capital raise: equity, debt and the options between

Structure decides who carries the risk, who gets paid first and who makes decisions. It deserves as much attention as the valuation.

Common structures

• Ordinary equity. Investors share in the upside and the risk. It's simple, but it dilutes founders and brings investors into the company's governance.
• Preference shares. These rank ahead of ordinary shares for dividends or on a sale, and are common in later-stage rounds.
• Convertible notes. Money now that converts to equity later, often at a discount to the next round. They help when a valuation is hard to set, but they still need careful drafting.
• Debt. No dilution, but it brings repayments and usually security. It suits businesses and projects with predictable cash flow, and rarely suits early-stage exploration or technology.
• Project-level structures. Property and energy projects often sit in a special purpose vehicle, so investors own a share of one project rather than the whole company. A joint venture brings a partner into a single project.

Terms that matter beyond valuation

• Board seats and voting rights
• Information rights and reporting obligations
• Pre-emptive rights on future raises
• Drag-along and tag-along clauses for a future sale
• Founder vesting and leaver provisions
• Distribution waterfalls for project deals

A good structure lines up everyone's interests. If investors only win when founders lose, or the reverse, the relationship will strain the first time something goes wrong. I'd accept a slightly lower valuation for cleaner terms and aligned partners.

Managing investor relationships after the money lands

The raise isn't finished when the funds reach the account. It's the start of a relationship that might last a decade, and your next raise depends on how you handle this one.

• Report on a schedule. Monthly or quarterly updates, in the same format each time, with results measured against the plan.
• Share bad news early. Investors can cope with delays and setbacks. What damages trust is hearing about them late, or from someone else.
• Use the money as you said you would. If the use of funds has to change, explain why before you change it.
• Keep the company record clean. Issue share certificates, update the register and lodge what needs lodging on time.
• Respect their time. Ask for help specifically, and save those requests for when they matter.

Investors talk to each other. A reputation for clear reporting and straight answers is the strongest asset you can take into your next raise. It also makes the hard conversations easier, because the trust is already there when you need it.

About the author

Adrian Campbell is an Australian entrepreneur based in Indonesia and the founder and CEO of Kinnara, a global property marketplace. He has raised capital locally and internationally for property development, technology and mining ventures over more than 15 years. Read his biography or browse his ventures.

This article is general information only and is not financial or legal advice.