Divesting nonstrategic businesses through an auction can enable a company to fund some or all of its initiatives, foregoing the need to acquire an equity partner or use debt financing. The auction process is fairly involved and time-consuming, and it's in the company's best interest to hire an outside firm to shepherd the process. Equity investment funding is another alternative. Depending on the business and level of equity required, different funds may be approached. Because an investment fund requires a certain level of return over a limited time period for its investment, it requires a thorough evaluation to determine feasibility for achieving the investment goal.
Debt financing can consist of senior or subordinate debt, and is usually provided by a bank.
As a rule, senior debt represents the largest portion of cash raised for a transaction. Banks will examine a company's financial projections, cash flow, profitability, industry prospects, and so forth when evaluating the business and deciding an amount to lend. Develop tactics to implement your strategy, and pull together an accountable team and project lead. Be prepared to make changes and mid-course corrections quickly. Throughout the process, it's important to stay connected to business leaders, follow industry trends, and be aware of market changes.