A Guide to Raising Capital

BY STEVE TORSO, Founder and Managing Director – Wholesale Investor and CRIISP


Table of Contents

Download parts 1-4 as PDF:

Part I Part II Part III Part IV



Having raised capital twice in my working life as the Founder of Wholesale Investor, I felt it essential that I share my experience with you.

Nothing quite prepared me for the journey, and it was the biggest learning experience I have had in business. There is no precedent for raising capital. Your first day at school prepares you for your first day at work. Getting your knees dirty and grazed in the playground prepares you for the hard knocks of life, but nothing quite prepares you for the arduous, daunting task that is capital raising.

This is my short point guide to raising capital. In it, you will find three tips and four common mistakes to avoid. I have also included some bonus comments at the end.



  1. GET READY – If you are looking to attract a significant investor onto your register, you need to expect that they will want to see more than just your IM and latest financials. Often, they will look to do due diligence on your business, to discover potential risk factors.
  2. STAY READY – With the amount of time it takes to get ready, you are best to keep your DD folders upto-date with your quarterly board reports, financial reports and other relevant material. By staying ready, your board are kept happy, and your business remains appealing to potential investors.
  3. ALWAYS BE RAISING – This is not because you always want to be taking on money, but the reality is, in the next six to 18 months, this is going to be required. Build relationships now. More than that, you will receive some great advice and suggestions on your business model and additional opportunities. You may even attract strategic partners.



I have learnt the most when I have made mistakes throughout the capital raising process but, this is where the best form of learning comes from. Here is what I have found.

  1. Relying on one potential investor is risky. It is important not to put all your eggs into one basket.
  2. Relying on your existing investors. While existing investors have helped to get you to where you are to date, total reliance on them isn’t recommended – this is not to say that you won’t have success out of re-investment, but for some investors, one round is enough.
  3. Waiting until you’re 100% investor ready with documents, IM etc. – perfectly ready does not exist, the truth is you are always raising, and you need to start any interaction ASAP!
  4. Success fees do not equal results – Many companies try and raise capital utilising multiple advisors or groups, who are operating on success fees only. This does not work. Advisors will focus on clients with a paid monthly mandate, as that is a guaranteed revenue source.



In Part I of this guide, I shared with you my background and experience, and perhaps the three most important aspects to consider when raising capital. They are:

  1. Being ready
  2. Staying ready
  3. Always be raising

In Part II of my guide to raising capital, I have summarised eight lessons that I have learned from some of the most prominent investors from within the Asia-Pacific and UK ecosystems. Some of these investors include Wee-Meng Thoo from Leonie Hill Capital, Anthony Thomson from 86 400 and Steve Baxter from Transition Level. These investors often run workshops for founders and investors at our Emergence Conference.



  1. Capital raising is a full-time, not a part-time job!
  2. Slow and steady wins the race. On your first interaction with any potential investor, do not overwhelm them with every insight into your business, but rather provide them when asked and, of course, have all the information READY in advance.
  3. Do not get trapped in the following mentality: I have spoken to them once to twice and they have not invested yet, so they are not a real investor.
  4. Investors are increasingly looking at three main metrics, Cost per Acquisition of a Customer, Return on Investment and Lifetime Value. These metrics show cost, profit and longevity.
  5. Wondering how much to raise? $150K or $1M? Always go for the bigger raise, it is better to widen the investor net, and saves you having to raise again in 6 months’ time.
  6. Your time is precious, do not waste it. Be firm in your decision to raise capital or not. Make a clear distinction.
  7. There are risks everywhere when raising capital, but if you don’t take the first step you are not in the game. Investors often look for skin in the game.
  8. Do not think that you can raise significant capital without spending some of your own money to do so. It is vital to receiving investment from potential investors, that they know you have skin in the game.



Raising capital is something that we live and breathe at Wholesale Investor — our business centres around the fundamental concept of generating momentum and getting investors eyes on opportunities.

I have raised capital twice, but much of my experience comes in the form of witnessing first-hand, the capital raising journeys of the companies on our platform. In part III of my ‘Guide to Raising Capital’, I have decided to focus on the concept of momentum, how to create it and why it’s not only important but vital.

I have created an equation that for me, acts as the essential starting blocks that will establish the right momentum for your company when it comes to sparking investor interest. The equation is simple in theory, but tricky to master and when you do master it, that is when momentum comes.

It looks like this: 1 + 2 = 3, simple right… wrong! Below I’ve outlined what each number signifies:

  1. The concept that nothing appeals more to investors than being able to invest in a ‘hot’ deal or
    company in a ‘hot’ sector. Just like in the fashion world, investors keep up-to-date with the trend and
    the trick is to know where that trend is live and when. For example, Fintech right now in Australia is
  2. The key components of business. This essentially means that momentum can be attained by your
    company having the right idea or mission, team, business model and to some extent, existing funding,
    for companies not engaging in seed funding.
  3. Timing. It is all about timing. However, even if the time is right, you will not gain momentum unless part
    1 and 2 of the equation are complete and combined.
  4. I know what you are thinking, “he only has 1 + 2 = 3”, well, the reality is that nothing is ever as simple
    as 1 + 2 = 3.
    Number 4 is your backup plan. What happens if your sector is not hot? What happens if your business
    lacks funding, or you lose an integral team member?
    Then, number 4 comes into play. This is your ability to focus on investors and key partners who can
    derive or gain most value from your business at a time when it is not hot. In most cases when the sector
    is not hot, it comes down to luck. If you get ready, stay ready and are always raising, you set yourself
    up to be as lucky as possible and thereby achieve great results. This is maintaining momentum.



The most overlooked aspect of capital raising is the process of forming relationships. We continuously talk about capital and rarely, if ever, talk about the people behind the capital raise. Often when you read articles from investors highlighting the motivation behind their investment, they refer to the leaders behind the business – shortly followed by their thesis on the company and the sector in which it operates.

I have summarised six key points that are vital for understanding the investor you seek, along with tips for ensuring you target the right investor for your company.


1. Respect and trust of the founder and their team forms the basis of any capital raising relationship

While this may sound basic, it is essential. From the investor’s perspective, they are looking to invest in a company that has the potential to be a 10X story or a failure. There is no shortage of options for investment which poses the question, why invest into you and your team?

Initially, it is important that an investor trusts and respects the company’s founder. This can be achieved by letting you and your passion for what you’re doing shine through. The art of storytelling isn’t everyone’s gift, but there are tools and platforms available to assist you at every step. Communicating your story and the reason why you’re doing what you’re doing – this is essential.

How does this transcend into knowing if investors are interested? Well, it’s the first port of call that they’re interested in you! Try not to overkill it, but often the most successful founders are the most passionate.


2. Seek strategic investors

A strategic investor is someone who can extract additional value from your business, other than the obvious financial benefits. One of the best examples of this was in 2009 when Microsoft took a stake in Facebook. At the time, it was thought that they overpaid for their investment. The reason Microsoft invested was that they were going to be providing the advertising platform, which Facebook was going to be monetising.

Strategic investors are thorough with their requests. Some of the key factors they will seek are:

  • Ability to take a 10 to 20% stake in your business
  • Often seek a Board seat as part of their investment
  • Will be extensive in their Due Diligence

Potentially, strategic investor will be looking to acquire your business in the future which is important to know as they may seek to increase their stake down the track.
Despite this, strategic investors can be significantly more valuable to the business as your success is their success more so than a financial investor.


3. Seek financial investment

There are typically two types of financial investors:

  • Small private investors: passive but proactive supporters of your business. Generally, invest between $50k-$100k
  • Professional fund managers, corporate investors and family offices: these investors are very diligent in their approach and the expectation of governance. They will be investing $1m+ and will get to know the drivers behind your business very well. They will be very disciplined on the valuation in which they come on in.

Often the best was to be discovered by these groups is either through referrals of existing networks or through the utilisation of platforms such as Wholesale Investor.


4. Understand the culture and customs of where the investor is based

As the world becomes more tech-savvy and interconnected, geographical location is becoming more irrelevant in the quest for investment. In saying this, international investors have pre-constructed beliefs about the potential of specific regions and sectors related to their interest. I have previously written an article on doing business in Asia, to help people understand what Asian investors seek (you can read it here).

On the other side, investors may seek to invest in you, based on the potential of your business in their country which is common in Asia, the US and UK/Europe. Issues around local licensing will obviously need to be factored in. We have had great success in helping Australian companies, who were expanding to Singapore and London, find investors in those markets to give them the foundations to expand properly.


5. Investigate the investor’s credibility

Just as the investor or investment group will do its due diligence on your company, you must do the same for them. Credibility is very important. The right investors can add a significant amount of credibility to your business. More than that, they can give you access to new networks, resources, partners and capital to your business.

Remember, it’s not illegal to turn down a deal if it’s not right for you as a founder. Although the truth is, you may be in a position in which capital is vital, and you are unable to be picky, which is not uncommon. I recommend that you target your ideal type of investor who can add capital, networks and credibility to your business.


6. Finding the right fit for your company

Finding the right fit for you is a daunting task. What do I mean by the “right fit”? Well, if an investor only looks at fintech, there is not much point going after them with a pitch deck for an agritech product to revolutionise farming. Just because they have money, it doesn’t mean they should be interested in you. Based on the type of investor you are targeting, it is good to note that:

  • Private investors will typically invest in what they know and understand. They may also invest alongside other HNW colleagues and friends who they have previously done deals with.
  • Professional investors will often have a specific mandate about what they can invest into. This includes sectors, stage, the quantum of money etc. which will limit their ability to invest in your opportunity.

Find the right fit for your company and the opportunity that feels right for you after following the six insights I have provided. I hope you have found the latest instalment of the capital raising guide useful.



If you would like to know more about my experience in raising capital, get in touch with me on LinkedIn here.

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