An interview with Founder Yanto Barker
With significant growth opportunities to pursue, Price Bailey Strategic Corporate Finance team helped performance cycling apparel brand Le Col go for equity funding in order to realise its potential.
The range of available corporate finance options has expanded in recent years. However, many leaders in businesses with ambitions to grow lack the internal expertise to ask the right questions to identify the most appropriate funding options open to them.
To accelerate growth, Le Col Founder Yanto Barker explains to Price Bailey’s Strategic Corporate Finance team, why equity funding was the chosen route for his business.
What made you opt for equity funding?
We are attempting to achieve significant growth. To achieve that and to maintain the steepness of that growth trajectory we needed a material amount of investment, which the business could not afford to access via debt or loan funding.
What has securing this funding meant for the business?
We are now in the fortunate position where we have relatively no restriction on the ability to push hard into our opportunities to achieve our full potential.
If we had not raised the investment then we would have had to accept a reduced level of growth.
There would have been significant restrictions around how many resources we had to invest into each opportunity along with the natural constraints on cash that exist for businesses looking to achieve growth organically.
How much work was involved in securing the funding?
We are a group with a holding company and a number of subsidiary business entities, which all needed to be included in the information pack for the due diligence process so the investor would feel confident with the investment.
We had to undertake a group finance report and this is not as simple as it sounds. It was essential to understand and identify exactly what every line item from every subsidiary actually meant going right back to the very start of the businesses.
This was quite painful on top of an already quite stressful process with significant time constraints.
Were there any unexpected difficulties or downsides to the route you chose?
It depends who you ask and what their expectations were in the beginning. For me personally, not really – I understood the objective we had set out to achieve and knew there would be some challenges to overcome.
Ultimately, I am not one to dwell on if we could have chosen a better route to achieve the success we did. We deliberated carefully based on the information we had to make the best decision we could at the time.
I’m sure there could have been some things done differently, but we were constrained by needing to move at a certain pace.
I am satisfied with the quality of decisions made but I have notes on what caused them to be considered if we ever go through a similar process again.
I think it is essential for success to be repeated, first it has to be understood.
What advice would you give to others considering a similar funding route?
Buckle up! Don’t underestimate the fact that it is a significant challenge. It always takes longer and is more difficult than anyone really wants to accept before you start.
Don’t be sucked in by anyone’s optimism and be prepared to move up and down the spectrum of fine details and broad overview.
Understanding the detail is key so you are not being naïve or negligent in what you are signing up to, but equally don’t get stuck in the detail without understanding if it really matters or not.
To find out more on the crucial questions you should be asking about funding your growth, download our Closing the Funding Gap ebook here.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.