Financial Models for Raising Capital

Financial models for funding rounds, debt facilities, and everything in between.

You may be raising equity from investors, negotiating a debt facility with a bank, or blending both. The number one thing every capital provider asks is the same: show me the model behind the number. I build the three-way model, profit and loss, cash flow, and balance sheet, fully integrated, that stands behind your ask, so the conversation moves from "prove it" to "let's talk terms."

I spent 20 years at NAB, ANZ, Banque Paribas and Deutsche Bank before founding Wiseworth. I have sat on the credit committee side of these submissions, which means I know what a lender is looking for before they tell you.

WHAT I BUILD

  • Fully integrated three-statement models for equity raises, showing use of proceeds, runway, and the path to your next milestone or to profitability

  • Debt capacity and sizing analysis. How much can you responsibly borrow, based on your free cash flow, leverage ratios such as debt-to-EBITDA and interest cover, and industry norms

  • Cap table modelling across multiple funding rounds, showing dilution at each stage

  • Debt covenant modelling. Leverage, interest cover and liquidity ratios structured so you can see in advance exactly how much headroom you will have against what a lender will ask for

  • Refinancing and facility renewal models, including scenario comparisons across different lenders, tenors and structures

  • Investor and lender-ready outputs. Assumptions clearly documented, sensitivities built in, formatted for due diligence

DEBT OR EQUITY, OR A BLEND

The choice between debt and equity is usually presented as a question of cost. It is really a question of trade-offs that only show up when you model both properly.

Equity has no repayment obligation and no covenant to breach, but it is permanent and it dilutes. Debt is cheaper and non-dilutive, but it imposes a fixed cash obligation and a set of ratios you have to keep clear of, in periods when the business may be least able to. A blend often sits better than either on its own, and the right blend is specific to your cash flow profile rather than to a rule of thumb.

The model puts the two side by side: the real cost of each, the dilution at each round, and the covenant headroom under a downside case. That is the comparison the decision actually turns on.

MODELS FOR IPO-STAGE RAISES

An IPO-stage model is a different document from a private raise model, in three respects.

The forecast horizon lengthens and the granularity expectation rises, because a prospectus forecast is a public representation rather than a negotiating position. The capital structure has to be modelled through the transaction itself, showing the pre-IPO position, the primary and secondary components of the offer, and the post-listing register. And the assumptions face a different kind of scrutiny, since they will be tested by an investigating accountant and then held against actual results in the first reporting periods after listing.

I build the model that supports that process, alongside your advisors rather than in place of them.

WHEN CLIENTS COME TO ME

  • Preparing a Series A, B or C round, or a first institutional raise

  • Negotiating a new debt facility, or renewing or refinancing an existing one

  • A lender or investor has asked for a model, not just a spreadsheet of numbers

  • Weighing debt against equity, or a blend, and needing to see the real cost and dilution trade-offs side by side

  • Approaching an IPO and needing a model that will hold up to an investigating accountant

FREQUENTLY ASKED QUESTIONS

What is a three-way financial model?

A three-way financial model is a fully integrated P&L, cash flow statement, and balance sheet that reconciles in every forecast period. It is the standard expected by sophisticated investors, lenders, and boards across Australia. For a full explanation of how the three statements link together, see three-way financial models explained.

What does a lender want to see that an investor does not?

A lender is underwriting downside, so the model has to demonstrate serviceability rather than upside. That means debt service coverage in every period, covenant headroom under a stressed case, and a clear view of the security position. An equity investor is underwriting the upside case and will focus on the growth drivers, the unit economics, and the exit. The same business needs the emphasis shifted depending on who is reading.

How much can my business responsibly borrow?

Debt capacity is a function of free cash flow rather than of profit or of asset value on its own. Most Australian corporate lenders will size against a leverage ratio, commonly two to three times EBITDA depending on sector and cash flow stability, tested alongside an interest cover ratio. The sizing analysis works out where your business sits against those constraints before you approach anyone.

Do I need a model before I approach investors, or can it wait?

Before. The model is what turns a conversation into a process. Arriving without one, or with a P&L projection only, usually costs you a round of credibility that is difficult to recover.

Should the model include a downside case?

Yes. A submission that presents only a base case is treated as a weaker submission by any sophisticated investor or credit committee.

How long does a capital raising model take to build?

It depends on the complexity of the revenue model, the capital structure and the audience. Scope, cost and timeline are confirmed after a discovery call, not before.

RELATED SERVICES

A model built for one conversation with one bank rarely survives the next. I build these so they hold up in front of any capital provider, not just the one you had in mind when we started.