If you’re a small physical therapy clinic, then you’ll need venture capital to grow and evolve. Venture capital refers to private equity financing. It’s an investment provided by venture capital firms or funds to small businesses that are trusted to have long-term potential.
There are billions of dollars in venture capital available. In fact, U.S. venture capital investments in 2021 were valued at $345 billion. And while venture capital is important to have, it’s not always easy to get.
Read on to learn about how you can raise venture capital for your physical therapy clinic.
4 steps to take for raising venture capital for your physical therapy clinic
Getting private equity financing can seem like an intimidating task. But with the right strategies and investors, you can scale your physical therapy clinic to provide services to a larger patient base.
Steps to take to raise venture capital for your physical therapy clinic:
- Figure out your clinic’s valuation — Investors need to see the value of your clinic in order to determine its future potential. The value is calculated with a variety of factors, including cash flow, payor mix, average patient income, number of new patients per year and staff costs. A business valuation is based on the formula of assets minus liabilities.
- Determine how much funding you need — Even though it’s natural to want as much investment money as possible, it’s important to have an exact figure in mind. It can be determined by how much capital your practice needs, the current stage of your practice, and how much ownership you’re willing to pass over to investors, called dilution. The larger the capital amount is, the larger the dilution will be.
- Design your pitch — Your pitch should be a combination of a business plan and a presentation, called a pitch deck, to showcase your physical therapy practice and why you deserve venture capital. Your pitch should include information about your practice, how it stands out from the competition, and your financial projections for the future. It should also describe why you need the capital and the return on investment.
- Target the right investors — While it’s important to cast a wide net for potential investors to improve your chances, you also need to prioritize the investors that work best with the values and objectives of your practice. After writing a list of potential venture capital firms that fit your investment stage, location and industry, try to narrow it down based on the likelihood of a successful funding relationship.
Alliance can help raise venture capital for your physical therapy clinic
Venture capital is important for a growing physical therapy clinic, but the process of raising capital can be stressful. We’re here to help every step of the way. In order to raise capital, you need to join a partnership, like Alliance PTP.
Contact our team today for more information about how we can help your practice or to find out how you can join our partnership in care.