Understanding Investment Banking Fees (Lehman Formula and Double Lehman Formula) vs. Lantern Consulting Model Fees When Financing a Management Buyout or Leveraged Buyout
Lantern Capital Advisors uses consulting model fees instead of using the Investment Banking Fee formula to raise capital and perform work on behalf our our clients (a Lehman or Double Lehman investment banking fee)
Lantern Capital Advisors performs all of our work on a consulting model fee basis. Our consulting fees are significantly less for the same capital raise, typically averaging under a quarter of a percent of the capital raise, or in these cases $40,000-$75,000 based on the complexity of the capital raise.
Based on the sample Investment Banking Fees (Lehman Formula, Double Lehman Formula) vs. Consulting Model Fees Capital Raise chart provided here, the fees to raise capital for a typical investment banking capital raise based on the Lehman or Double Lehman formula would cost a company between 1-6% of the total capital raised in order to fund the company should they retain and use an investment banker, broker or “finder” for their transaction.
Using this example, a $20 Million dollar capital raise for a management buyout or debt refinancing would cost a company between $300,000 and $600,000 in investment banking fees to raise capital depending if their broker, investment banker, or “finder” charged them a fee based on the Lehman Formula, or Double Lehman Formula . Similarly, a $50 Million dollar capital raise or debt refinancing would cost a company between $600,000 and $1,200,000 in investment banking fees, plus “expenses”.
An alternative to using an investment bank, broker, or fee based advisor to raise capital for growing companies, Lantern Capital Advisors partners with accounting firms, wealth advisors, and law firms to raise capital for growing companies. As an hourly based consulting firm, our services to raise capital are an investment banking alternative.
Because of our experience raising capital, accounting, corporate finance, and management consulting, and our approach to client engagements, Lantern Capital Advisors is ideally positioned to work with a variety of complementary service providers, particularly accounting firms, law firms, and wealth advisory firms which have client needs that go beyond available resources or skill-set, or conflicts with their current client roles.
Lantern Capital Advisors corporate financial consultants can be a complimentary addition to any consulting organization that has the need, but not the skill set to raise capital for existing clients. Because we charge an hourly rate as our fees to raise capital, Lantern’s consulting team can fit seamlessly into any consulting engagement. and engagements.
The experience of Lantern Capital Advisors and hourly based approach is a very appealing and low risk way for all parties to work together for the benefit of our clients as an alternative to investment banking.
To learn more about PARTNERING with Lantern Capital Advisors or if you are a FUNDING SOURCE and are interested in us adding you to our client distributions contact us at firstname.lastname@example.org.
Abstract: Small and mid‐sized companies looking to raise capital intuitively turn to investment banks for help. In fact, many growing companies view working with a well known investment bank as an attractive milestone related to their Company’s success and future potential. However, CFOs should be aware of the significant fees involved, and more importantly conflicts of interest which can undermine the best interests of the Company. This white paper describes investment banking services and fees, common conflicts of interests, and suggests an alternative approach that has worked well in other professions.
What’s the old saying, “Adversity brings innovation”? As the financial markets began to unravel, many financial institutions stopped making new investments, those that were lending and investing were constantly changing their investment parameters. In order to give clients (and ourselves) peace of mind, we reengineered our approach to capital raising and found not only a solution for a challenging market, but a process that likely works best in any market.
Abstract: Innovations and trends continue to develop which improve financing alternatives for established, entrepreneurial companies. These include continued new product innovation, increasing nationwide competition, bigger disparities between banks, and increased funding for owners’ personal liquidity (cash dividends). Each of these trends is discussed below and illustrated with a recent example.
Abstract: Given their job title, private company CFOs are often expected to be able to raise capital for their company, yet many feel unprepared or under qualified. This white paper addresses the steps necessary to effectively manage the capital raising process. By utilizing these guidelines, CFOs from all levels of experience can become decisive leaders that serve the best interests of their company and its owners while potentially creating more wealth for themselves and their management team.
Abstract: A fast break play in basketball occurs when a team races down the court and scores a goal as quickly possible. Loosely translating that to business, fast break strategy means an approach that maximizes an owner’s goal (i.e. like running up the score), or achieves a desired goal as quickly as possible.
To most, the words corporate finance or corporate financial planning especially when used in the context of high growth companies is just a fancy way of saying ‘raising capital’. But corporate financial planning plays a key role in unlocking and managing growth that goes far beyond just looking for capital
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