Hire best-in-class Capital Structuring experts

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Capital Structuring specialists to projects that need execution, now.

What is Capital Structuring?

Capital structure “is the relationship between the various long-term sources financing such as equity capital, preference share capital and debt capital. It refers to a firms permanent financing sources as represented mostly by its long-term debt and equity and deciding the suitable capital structure is the important decision of the financial management because it is closely related to the value of the firm. Gitman and Zutter (2012) defined capital structure as the mix of long-term debt and equity maintained by the firm. A firm’s capital structure comprises a range of financial decisions which may include, its choice of a target capital structure, its debt maturity period as well as the type of financing it adopts for a particular period. Managers of a firm ensure they make capital structure decisions that enhance the value of their firm. From the foregoing, capital structure can be defined as the mixing of financial sources to finance a firm’s activities.

Objective of Capital Structuring

The key objective of firm structuring is to maximize the firm’s intrinsic value. To achieve this objective, managers aim to reduce the firm’s cost of capital structure to its barest minimum. The point where cost of capital structure reaches its barest minimum is referred to as the firm’s optimum capital structure level. The optimum capital structure is defined as the capital structure or a firm’s combination of debt and equity that results in the firm reaping the maximum value. It is the point where the Weighted Average Cost of Capital (WACC) is minimum and therefore firm value is at its maximum. In addition, an entrepreneur may set up his or her business so that profits are taxed at a lower rate than other forms of income. Aside the direct employment of capital in the form of equity or debt, Capital structure can also be applied in a firm’s tax procedure as profits can be moved from one country to another and back again or the firm’s profits are used to invest in low-return but tax-free transaction such as purchasing real estate in in order to reduce the firm’s tax liabilities. Companies that work with “tax advisors” and transfer pricing specialists commonly form “partnerships” for these purposes.

Application of Capital Structuring.

Capital structuring is used in connection with mergers and acquisitions (M&A) to avoid a hostile takeover. A company can issue a large number of new shares, diluting the percentage of the company owned by the “target” stockholders. This makes them less valuable because they have a smaller percentage of the total company. In addition, issuing new shares creates additional voting stock for management to control, thus preventing unfriendly takeover attempts by making it difficult for third parties to obtain a controlling interest. A combination of both dilution and new share issuance is also possible if it is deemed necessary or desirable.

Also, if an M&A deal is successful, one or both parties can do a “tax inversion”, by which the target company changes its legal domicile to another country. This allows it to take advantage of lower taxes for companies within that country, which are often much higher than those faced by US-based companies under current US law.

Capital structuring is also often used to allow a business venture raise money from more than one investor in a given transaction. It can also be used to take advantage of special tax treatment, such as the foreign earned income exclusion. There is a poor correlation between structuring and tax breaks. For example, if a business obtains a generous tax break, it may be structured so as to take advantage of poor or inflated accounting methods, such as phantom income or undervaluation of assets. It will then operate at a loss for tax purposes and find itself unprofitable.

Capital structuring can have an impact on jobs if a corporation is trying to avoid paying taxes. In this case, the company may move its money from a high-tax jurisdiction to a low-tax one. In the process, it might close down its operations in the high-tax jurisdiction and lay off employees there. To avoid this situation, some countries have tax treaties with other jurisdictions which attempt to prevent it from happening by imposing a certain tax on profits sent outside of the high-tax jurisdiction. Critics argue that these tax treaties serve mainly to make it more difficult for ordinary citizens and foreign firms to pay less taxes than domestic firms.

The importance of adopting an appropriate capital structure cannot be overemphasized given its impact on various aspect of a firm especially in terms of its continuation as a going concern. Engaging an expert to advise on the appropriate structure to adopt could very well determine the status of the business.

Hire the best Capital Structuring specialists in 2,900+ industries

Fintalent is the invite-only community for top-tier M&A and Strategy talent. Hire global Capital Structuring consultants with extensive experience in over 2,900 industries. Our platform allows you to build your team of independent Capital Structuring specialists in 48 hours. Welcome to the future of M&A!

Why hire top Capital Structuring experts?

Trusted Network

Every Fintalent is exclusively invited and vetted.

Ready in 48h​​​

Hire efficiently. Your M&A team is ready in 2 days or less.​​​​

Specialized Skills​

Fintalents are best-in-class - and specialized in 2,900+ industries.​

Code of Ethics​​

We guarantee highest integrity and ethical principles.​​​

Selected Clients and Partners

Frequently asked questions

Most frequent questions and answers

What clients usually engage your Capital Structuring Consultants?

We work with clients from all over the world. Our clients range from enterprise and corporate clients to companies that are backed by Private Equity or Venture Capital funds. Furthermore, we work directly with Family Offices, Private Equity firms, and Asset Managers. Most of our enterprise clients have dedicated Corporate Development, M&A, and Strategy divisions which are utilizing our pool of Capital Structuring talent to add on-demand and flexible resources, expertise, or staff to their in-house team.

How is Fintalent different?

Fintalent is not a staffing agency. We are a community of best-in-class Capital Structuring professionals, highly specialized within their domains. We have streamlined the process of engaging the best Capital Structuring talent and are able to provide clients with Capital Structuring professionals within 48 hours of first engaging them. We believe that our platform provides more value for Corporates, Ventures, Private Equity and Venture Capital firms, and Family Offices.

Our Hiring Process – What do ‘Community-Approach’ and ‘Invite-to-Apply’ mean?

‘Invite-to-Apply’ is the process by which we shortlist candidates for the majority of projects on our platform. Often, due to the confidential nature of our clients’ projects, we do not release projects to our whole platform but using the matching technology and expertise of our internal team we select candidates who are the best fit for our clients’ needs. This approach also ensures engagement with our community of professionals on the Fintalent platform, and is a benefit both to our clients and independent professionals, as our freelancers have direct access to the roles best suited to their skills and are more likely to take an interest in a project if they have been sought out directly. In addition, if a member of our community is unavailable for a project but knows someone whose skill set perfectly fits the brief, they are able to invite them to apply for the role, utilizing the personal networks of each talent on our platform.

Which skills and expertise do your Fintalents have?

The Fintalents are hand-picked and vetted Capital Structuring professionals, speak over 55 languages, and have professional experience in all geographical markets. Our Capital Structuring consultants’ experience ranges from 3+ years as analysts at top investment banks and Strategy consultancies, to later career C-level executives. The average working experience is 6.9 years and 80% of all Fintalents range from 3-12 years into their careers.

Our Capital Structuring consultants have experience in leading firms as well as interfacing with clients and wider corporate structures and management. What makes our Capital Structuring talent pool stand out is the fact that they have technical backgrounds in over 2,900 industries.

How does the screening and onboarding of your Capital Structuring talent work?

Fintalent.io is an invite-only platform and we believe in the power of referrals and a closed-loop community. Members of our community are able to invite a small number of professionals onto the platform. In addition, our team actively scouts for the best talent who have experience in investment banking or have worked at a global top management consultancy. All of our community-referred talent and scouted talent are subject to a rigorous screening process. As such, over the last 18 months totaling more than 750 hours of onboarding calls, of which only 40% have received an invite-link after the call.

What happens if I am not satisfied with my Capital Structuring consultant’s work?

During your initial engagement with a member of our Fintalent talent pool with no risk. If you are not satisfied with the quality of your hire for any reason then we are able to find a replacement at short notice. There is no minimum commitment per project, but generally projects last at least 5 days and can last 12+ months.

Interested in our invite-only community of tier-1 Capital Structuring experts?

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