Equity, quasi-equity, senior debt and mezzanine
A well-calibrated financing means five years of breathing room. A poorly calibrated financing means five years of constraint. In between, there is not much: dilution chosen or imposed, the shareholders agreement read or not, the liquidity clause negotiated or ignored.
The financing structure chosen today conditions a company’s trajectory for the next five years. Between dilution, debt and hybrid instruments, the right arbitrage depends on the project, on the leader’s sensitivity to capital sharing, on market conditions. Arcadia Partners advises SME leaders in their financing strategy, beyond simple banking intermediation.
When Arcadia steps in
The situations we advise on look like these. A growing SME that has identified a development project (new industrial site, internationalisation, acquisition) and wonders how to finance it without diluting its historic shareholders beyond reason. A leader of a company under LBO who must refinance debt in a tense market and negotiate new covenants. A family of shareholders that wants to provide liquidity to a member exiting without losing control. A post-sale entrepreneurial project looking for a quasi-equity partner to accelerate a new phase.
We intervene on raises between €1m and €10m, across all instruments.
We do not intervene in early-stage or venture capital raises. Our field is the financing of established, profitable SMEs and mid-market companies, in transformation or consolidation phase.
Our method
The first task is to build the financing narrative: what story the company tells, what project it finances, what predictable trajectory over five years, what risks are assumed. This document makes the difference between a raise that succeeds on the expected terms and a raise made in haste with a valuation discount.
We then identify suitable financial partners: mid-market funds, specialised investment banks, quasi-equity investors, sophisticated family offices. The list is short, qualified, and each investor is approached individually. We negotiate term-sheets alongside the leader, with particular attention to clauses that are rarely negotiated: post-investment governance, liquidity clauses, drag-along, tag-along, anti-dilution.
Engagement framework
Exclusive mandate, monthly retainer plus success fee on completion of the raise. Typical duration: six to twelve months.
Our commitment is to arbitrate in favour of the leader, not the market. An investor is easy to find. The right investor, in the right structure, at the right valuation, is rarer. That is where we engage. If you are considering a raise, let us talk before the need becomes urgent.