What actions will be the best enable a company to raise additional equity capital?

Answer 1

Determining the best options to raise capital may or may not be reviewed as favorable depending on how this capital is extracted:

The most common is a form of liquidation which is the safest mode if executed wisely but still poses some moderate risk if the the right assets aren't liquidated or the wrong quantity to stay viable.

The second is short term debt investment for high yield return investments again if executed wisely as the most risky venture.

There is a hybrid of blending these two to have a higher equity income through liquidation to reduce the debt investment and still reach high yield returns for future needs if again planned wisely.

Liquidation - is only simple budgeting and reduction of capital that is insufficient (such example to understand on a small scale is looking at a regular home- to find more income - one would eliminate unused goods (yard sale or trade a car for newer but more efficient model), Seek cheaper services (seek new phone provider) and reduce labor costs (fire lawn service to do-it-yourself). The goal is to eliminate items via poor performance and swap for more costly efficient means.

Short-term debt would be a simple loan for a very short time to acquire goods or engage in partnership (merge resources) to pilot a venture to gain profit at a higher rate of return then invested in that debt to pay off and still have enough left over to increase equity.

The most less used is preventative business practices that may eliminate the need to raise capital and increase efficiency of liquidation ability for capital equity increases being more viable resource turnaround. It would be maintenance business management - in already existing business capital such as an individuals home or property - maintain the value (if budgeting existed to keep up property value by maintaining it and ensuring all operations are efficient and low cost) liquidation for more advanced technology generating more value can be obtained as older equity assets are liquidated in a more timely manner to ensure maximum value and reduced debt investment.

Existing equity is also modified - expanded (R&D to increase demand or keep asset viable) as creating a smart additions or features to the property. Such as adding LED lighting (may decrease utility expense, reduce time/resources to replace bulbs and may offer tax incentives also increasing property value on an individual bases that may also imply business applications as well) Invest the savings or return immediately into debt for installation or payment into materials or labor to acquire expanded equity market growth.

Though favorable to a business is eliminating the assets such as labor force it maybe viewed negatively via social reactions and may or may not have impact on business - unless utilized wisely such as rotating labor force for those whose skills are outdated but replaced with fresh new integrated labor with updated: skills, knowledge and/or networking access options for the business. The later a rotating cycle labor is a maintaining feature seldom use properly or wisely. Nor maintaining in house options to retain via continuous labor training programs that may protect a business to stay viable and eliminated labor providing trade secrets or better operation to ones competitors.