Need help growing your business?
Are you raising new capital to fund growth? Looking to buy a competitor? Planning to buy-out existing shareholders?
We launched FirePower Capital with business owner-operators like you in mind. Since then, we’ve delivered innovative ways to help Canadian entrepreneurs grow their companies: we invest and we advise.
Why Choose FirePower
We either invest or advise, with the sophistication typically reserved for larger companies, and with the passion and dedication of a true and trusted fellow entrepreneur.
When deploying our own capital, we are creative and quick to respond. We don’t just look to tick boxes. We can put between $1 to $20m to work in the form of Gap Debt™, in situations where very few other lenders would play.
When advising on growth initiatives, whether raising capital, or advising companies that are acquiring others, we provide access to our extensive networks and bring to bear our deal experience to keep the transaction on track.
No other fund can claim to have the capabilities to advise its portfolio companies to the extent we do, and conversely, no investment bank has access to that much of its own capital to put to work in its clients.
Investing in Canadian Companies
Innovative, promising private companies often do not have access to sufficient financing to fuel their growth.
Gap Debt™ is our solution to that problem.
Does my business qualify for Gap Debt financing?
With rare exceptions, we typically look for businesses that show the following to receive consideration:
- Revenues: $2M+ and annual growth above sector average.
- Operating Profitability: Must have excellent visibility into cash flows; if negative, must anticipate break-even within 12 months.
- Enterprise Value: Sector M&A is active and/or business valuation is well understood/quantified and is resilient to risk.
- Forecasting: Must have deep insights into the future of the business.
- Management: Owners must be exceptional and have “skin in the game”, share our values, and have some financial acumen in house.
- Location: Must have significant operations in Canada.
- Sector: Agnostic, as long as companies within it have good prospects.
- Use of Funds: Must be for growth: acquisitions, working capital, etc.
How much can I borrow?
We issue loans of up to $20 million, with our sweet spot being between $1 and $10 million.
Why should I borrow Gap Debt?
Gap Debt unlocks capital from your enterprise value, not just your tangible assets, helping you get more financing than traditional banks are willing to put to work.
Gap Debt can be a substitute or complement to an institutional venture capital (equity) round. It can act as a bridge to equity if it’s not available yet. In either case, it moves quicker, reduces dilution and comes at a lower cost. It also allows borrowers to retain control of strategic direction and of the board.
We’ve found through experience that Gap Debt generates a healthier approach to managing growth than equity venture capital, which can distort behaviours such as growing for growth’s sake. We can structure the servicing of our Gap Debt to match your growth strategy.
What makes FirePower different from similar funds?
There are only a handful of similar funds in the country in this space. Between us and those funds, we are truly entrepreneurial; we’ve built FirePower Capital from scratch, and so we speak the same language as our borrowers. Finally, we’re deeply invested in your success – after all, it’s our money on the line.
Our Gap Debt team collaborates closely with our Investment Bank, which is one of the most active in the country. Our investment banking activity in the current climate gives us insight into valuation multiples, strategic buyers’ appetites and tactics, and best practices for exits. Our lending team sees value where others don’t, and can call on our investment bankers to advise our borrowers well ahead of an exit.
We also invite our borrowers to join our ecosystem: a powerful network of entrepreneurs, investors and advisors we have invested in, or with.
Advising on Complex Financings
When engaged as an advisor, we specialize in structuring transactions that meaningfully change the course and outlook of private, owner-operated Canadian companies.
Our network of over 2,050 lenders, investors, and transactional advisors allows us to source the right capital for your needs.
In which situations can FirePower advise on financing?
Firstly, the financing opportunity must be outside our Private Capital division’s scope. We will not advise on deals that other lenders would perceive as transactions we could have done ourselves but chose not to – that would put you at a huge disadvantage.
We can guide companies through the full spectrum of debt instruments, be it senior term debt, asset-based loans, unitranche debt, revolving facilities, royalty-based financing and so on, whichever is more appropriate for your uses of capital. We are unbiased in our recommendations. We do not receive referral fees from any lender; we work for you.
The four main situations that involve our Investment Bank’s expertise in a debt raise are as follows:
- Financing organic growth.
- Securing financing for an acquisition.
- Refinancing current debt (in both going-concerns and distressed situations).
- Executing on shareholder-driven events (e.g. management buy-outs or buy-ins, dividend recapitalization).
Why engage FirePower as an advisor?
We’re lenders, too. We keenly understand credit and speak lenders’ language, and will work with you to anticipate and mitigate their credit concerns. Yet we’re also entrepreneurial – we’ve built our business from scratch and understand what it’s like to be in your shoes. Today, we’re recognized as one of the best sources of deal flow for our lenders – a deal from us goes to the top of the proverbial pile.
We have our thumb on the pulse of the lending community and know what’s possible at given rates and terms. We have over 300 borrowers active in Canada (both domestic and international players) in our network. At larger institutions, we know the account managers that get deals done.
Finally, we close deals – at a much higher rate than the industry average.
Can you raise equity?
Only in exceptional circumstances. In most cases we will help our clients find a more suitable advisor from within our alliance network.
What kinds of companies do you advise?
Companies we advise must be able to secure debt financing and be seeking a minimum of $2 million. When this is a given, we tend to advise in the following capacities:
- As a trouble-shooter if the raise isn’t straightforward (we can’t add much value when a profitable company is looking to simply refinance their line of credit).
- As an intermediary between various stakeholders, such as when a portion of a management team is organizing a buy-out.
- As a facilitator to get multiple investors at the table and have them compete for the business.
Advising on Inorganic Growth Initiatives
Our buy-side advisory team accelerates our clients’ growth through acquisitions.
We help our clients find targets, negotiate terms and close deals.
How can a buy-side advisor help? I know my industry.
Only large companies have the resources to not only track, but also act on every single one of their competitors’ exit intentions methodically. It is time-consuming. It is a long-term effort. Most of the time, it’s impossible because of confidentiality. Engaging an advisor, who will document the right information, and make moves when the time is right, makes sense.
A layer between a seller and a buyer reduces confidentiality concerns; one side can remain anonymous for a period of time, until interest becomes more tangible. This is especially true for active acquirers, with a reputation in their industry—sellers may simply refuse to talk to them directly.
Buy-side advisors expand the pool of potential targets significantly. In our experience, we add 5 to 8 times more targets to the list of companies our clients can think of.
Why engage FirePower as a buy-side advisor?
Our clients engage us because we cover the transacting intentions of over 50,000 private companies in North America; those we don’t know about yet, we have the capabilities to find out.
Our buy-side practice specializes in identifying and connecting with private business owners in Canada. Other advisors typically focus on transactional or due diligence services, which are more technical in nature. We speak the owners’ language and scope out their willingness to sell quickly and efficiently — this is not accounting work.
As an established investment bank, our outreach sends a strong signal that our client is a serious buyer. We have an in-house team of six deal origination specialists that lead our acquisition efforts, offering you capabilities unmatched in Canada.
Within our confidential database, we have tens of thousands of prospects whose exit intentions are well documented. Our proprietary deal platform is optimized to rapidly map out the universe of possible targets, track them and report on them.
What kinds of buyers do you work with?
We tend to work with buyers operating in a fragmented industry that has dozens of possible targets, backed by a financial sponsor and with access to an acquisition credit facility. It helps if buyers have bought at least one other business in the past, and have established a process.
Still have questions? Check out our FAQs.