Getting “Investor Ready”

Many companies need to raise external finance in order to fulfil their potential.  Generally for start-up companies this is equity or share capital as there is insufficient back-up to support borrowing from a bank.

Finding investors can be a difficult process.  It is therefore critical that when you get in front of a potential investor you make it count.  Most entrepreneurs want to talk about their business idea, but an investor will, in addition, need to understand the investment proposition, the management team and the market in which the business operates.  Having anticipated the potential questions and incorporated the answers into the pitch will improve your chances of securing the investment.

One of the key documents to get ”investor ready” is the Business plan.  In fact, it should be a key part of your thinking process, not just at the time of setting up the business but moving forwards as well.  Being able to write down how the business will function is very important and will help you to highlight areas that you may have not thought about.  Whole books are available on writing a business plan and I don’t intend to go into the process in this post.  Some entrepreneurs I know have initially resisted this process but have seen great value afterwards from the disciplined thinking that is involved.  The financial projections, especially the cash flow forecasts and sensitivities should improve your understanding of the business model and the key drivers between success and failure.

There are some attractive tax incentives for investors in early stage businesses and structuring your company to qualify can again make the fund raising task easier.

When the business is generating sales, the banks may be willing to lend money to grow and develop the business.  It is important to understand the finance options available and their suitability.

If you need help with this then I am happy to assist.