Equity Capital Advisory
Specialists in Equity Capital Solutions
Filling the financing gap for growth-oriented, emerging middle market enterprises.
Capstone Partners’ Equity Capital Markets Advisory Group has been raising equity capital for growth-oriented enterprises, ranging from mid-stage ventures to more mature middle market companies, since 1999.
Our senior professionals have completed over 100 equity private placements, raising over $20 billion of capital. They are in the market every day interacting with investors, which allows them to provide the most up to date input on market terms, structure, valuation, and market activity to our clients.
Equity Capital Markets Advisory Group – Raising Equity Across Sectors
Members of Capstone’s Equity Capital Advisory Group work closely with the firm’s industry and service teams to provide our clients with maximum market coverage and innovative solutions to complex situations. This combination of industry knowledge and extensive relationships with hundreds of investors, allows us to deliver the best possible results for our clients executing equity capital raises.
We believe equity transactions are transformational events for our clients, and by finding the right investor with the best terms we help them achieve their long-term goals.
Why Raise Equity Capital?
- to help fund growth initiatives
- to recapitalize the balance sheet
- to provide shareholder liquidity
- to finance an M&A transaction
Common Questions from Equity Capital Markets Advisory Clients
What are the forms of Equity Capital?
Capstone Partners’ Equity Capital Markets Advisory Group works on two types of equity financing: growth equity and structured equity.
What are the Advantages and Disadvantages of Equity Financing?
There are many advantages and disadvantages of equity financing for companies seeking to raise capital. Some advantages include no repayment obligations and no additional financial burden. Some disadvantages include giving up a portion of company ownership and increased costs vs. debt equity due to increased risk. Discover more advantages and disadvantages in this article: Advantages and Disadvantages of Equity Financing?
What is Growth Equity and Who is it For?
Growth Equity is typically in the form of convertible preferred stock. Clients typically are high growth companies with $15 million or more in revenue/ARR and demonstrated strong historical revenue growth.
What is Structured Equity and Who is it For?
Structured Equity is typically structured as redeemable (versus convertible) preferred stock with a PIK dividend and warrants, an has a target return of mid-teens for the investor resulting in a less dilutive financing for the issuer. Clients typically middle market companies with greater than $50 million in revenue and more than $20 million in EBITDA. Read more in this article: What is Structured Equity?
Why work with an Equity Capital Markets Advisor?
The experienced professionals in Capstone’s Equity Capital Markets Advisory Group will be completely dedicated to you, offering a competitive advantage by providing critical market knowledge and input on valuations, potential investors, terms and the process. You stay focused on running your company, while Capstone’s team does the heavy lifting to execute your deal, including:
- developing marketing materials
- conducting due diligence
- investor outreach
- deal negotiation
- structural guidance
Who are the Investors?
Typical investors for equity placements include:
- Late-stage Venture Funds
- Growth Equity Funds
- Private Equity Funds
- Structured Equity Funds
- Family Offices
- Crossover Buyers
- Sovereign Wealth Funds
- Fund of Funds
- Corporate Venture Funds
Recent Equity Capital Markets Advisory Transactions
Senior Team Leaders
Contact Us
Want to know if an equity financing transaction might be appropriate for your company? Start a conversation with Equity Capital Advisory professional today.
Frequently Asked Questions
Equity cost of capital is the return your company must deliver to shareholders to compensate them for the risk of investing in the business. Such a return reflects what equity investors expect to earn given your risk profile, growth outlook, and industry dynamics.
The most common method for calculating it is the Capital Asset Pricing Model (CAPM), which prices equity returns as a function of a risk-free rate, an equity risk premium, and a company-specific beta that measures sensitivity to broader market movements.
This number matters to you because it:
- Shapes valuation multiples
- Influences capital structure choices
- Sets hurdle rates for new investments
- Drives the relative attractiveness of debt versus equity financing
Companies with a lower cost of equity have more flexibility to grow, acquire, and create value for shareholders. For private middle-market companies in particular, practitioners typically use a build-up method or a modified CAPM that adds size and company-specific risk premiums to a base rate, since there is no public-market beta to draw on.
Equity capital advisory is the professional guidance provided to companies raising equity from private investors. The advisor positions the company, prepares materials, identifies the right investors, structures the transaction, and negotiates terms.
The investor universe is broad and specialized: late-stage venture funds, growth equity funds, private equity funds, family offices, structured equity funds, crossover investors, and institutional asset managers. Each has distinct return expectations and structural preferences. Matching your business to the right investor is as important as the valuation itself.
Equity raises typically take a few forms:
- Growth equity, usually convertible preferred stock, is suited to companies with $15 million or more in revenue and demonstrated growth.
- Structured equity, typically redeemable preferred stock with a PIK dividend and warrants, is designed to be less dilutive.
- Minority and majority recapitalizations, which provide shareholder liquidity while bringing in an institutional partner.
A strong advisor brings real-time market intelligence on valuations and terms, plus established investor relationships. Equity is more expensive than debt and dilutes ownership, so getting the structure, partner, and terms right matters enormously.
Equity financing is the sale of an ownership stake in your company in exchange for capital. Unlike debt, it requires no fixed repayments and no interest. The trade-off is dilution: you give up some ownership and, depending on the structure, some control.
For middle market companies, the capital typically comes from a private placement to institutional investors rather than a public offering. The most common instruments are convertible preferred stock (standard for growth equity rounds), redeemable preferred stock with PIK dividends and warrants (typical for structured equity), and common equity (used less often).