Is your business investor ready?
24 March 2020
In these uncertain times, it’s important to know how you can attract investor funding. To attract funding businesses need to be clear about why they exist. At the time when you start your capital-raising journey, you should be able to answer the following questions.
What does your business do? How much money do you need and what are you going to do with it and most importantly when will investors see a return on their investment? At crunch time, these questions will require clear and concise answers.
When it comes to asking for investment, you need to be able to support your value proposition with materials, documents and evidence. Investors take the approach of trusting, but they will need to verify your position. You also need to have a long-term view and understand where you’re going to source funds from. Investors’ intention is also critical to implementing your strategy and achieving success.
There are three key times we see businesses looking to source funding, but these principles apply whether you’re a startup, looking to scale up or need funds for an exit strategy. Each stage is unique and it is important to match the investor type to the stage you are at in the journey. It is also important to be honest about where you are at in the journey.
People will often overestimate what they can do in a short period of time, but underestimate what can be done with continuous and incremental improvement. Assume that an investor will trust what you say but also assume they will verify everything.
Some of the common challenges I see are a lack of strategic intent, clear initiatives and documentation to support the value proposition. Sourcing the right funding can be a long journey and waiting too long to start is the biggest killer. Visit our BDO Investor Readiness Program page to get the tools to help you start your journey.