Insights · Capital raising · 6 min read

What it really costs to raise, rung by rung

Percentages hide how large the bills are. Turned into dollars, the cheapest-looking raise is often the most expensive, and the costs peak wherever someone is paid on success.

By Andrew Hayes · Adapted from chapter 13 of The Capital Raising Ladder

Estimated cost for a typical raise at each rung

2. Friends and family
$250k at 3%

$7,500

3. Angels and digital platforms
$1M at 7%

$70,000

4. Formal wholesale reach
$3M at 6%

$180,000

5. Venture capital
$10M at 2%

$200,000

6. Private equity
$50M at 3%

$1,500,000

7. Liquidity platforms*
$5M at 5%

$250,000

8. NSX and second-tier
$5M at 10%

$500,000

9. Major exchange IPO
$50M at 6%

$3,000,000

Typical rates are midpoints of researched ranges; every deal differs. *Liquidity platform fees are paid by the selling shareholder, not the company.

Two comparisons that change decisions

$200,000

for a $10M VC round

At about 2%, almost all legal fees, it's the cheapest way to raise a large sum in cash. The real price is paid in equity and terms.

$500,000

for a $5M NSX float

Half the raise, more than double the bill, and listing costs continue every year. Unless liquidity or profile is the goal, a private raise is usually better value.

Checked against real fee schedules

Crowdfunding. Under Birchal's pricing from September 2025, a $1 million raise pays about $60,000 in success fees plus a $7,000 fixed fee, roughly $67,000 before legal, accounting and marketing costs.

Placements. Lead manager fees run about 6%, split 2% management and 4% placing. On $3 million that is $180,000, before any broker options.

IPOs. Average fixed costs for mid-market ASX IPOs were $233,721 over the year to June 2026, excluding brokerage. Add a 5–6% lead manager fee and a $50 million float lands near $3 million.

The cheapest capital is not always the best. A raise that costs little in fees can be expensive in equity, control or time.

The table only counts cash. The hidden costs (founder time, dilution, governance load and ongoing disclosure) are usually larger, and the book prices those too.