We’ve helped many businesses fundraise the capital they need to grow. Whether they have chosen to list as public company, or whether they’ve pursued private investment or even corporate venturing, we have supported businesses owners and their leadership teams through the perils that lie waiting to trip up those who are unprepared and have not put in the necessary legwork to ensure their efforts are successful.
When it comes to fundraising, for many, there’s only one chance at success – one chance to make the best impression to an investor, one chance to effectively portray your brand, your vision and your long-term strategy, and the pressure is on to get it right. It’s for this very reason that we suggest never simply trying to ‘go-it-alone’, but to find business support that has proven experience and solid expertise in having done this before, and able to guide you along towards business sustainability.
If you’re about to embark on a fundraising initiative, we’ve put together 6 top tips about getting yourself ready for one of the biggest commercial negotiations you may face.
1. Be clear on your expectations
Knowing what you want to achieve, and feeling confident that you’re going to achieve it, is a huge part of the battle won. And for many, setting (and clarifying) those expectations is a struggle in itself. Understand that raising capital can take a long time, and requires a lot of effort. It’s not a get-rich-quick scheme and requires a substantial amount of preparation. But more than that, once you’ve successfully secured the capital, you will be responsible for a number of new commitments to your shareholders, too.
Remember that there are thousands of businesses who are pursuing the same growth path, and funding opportunity, and for many business leaders – the intensive process often leads to business leaders giving up or losing hope. So, before you do anything, ensure that your growth strategy is solid, you have a team of people who believe in what you’re trying to do – and that your focus is tuned towards the long-term.
2. Be Brave
Your attitude will define your fundraising outcome. Having a can-do attitude not only grows your own motivation, and the motivation of your team, but builds confidence in your investors. Remember that traditional fundraising methods have changed considerably. New avenues towards business finance have opened up that cater to all kinds of businesses, for most kinds of industries. Niche lenders, corporate venturing arms, startup investors, angel investors, crowdfunding platforms and more, all make it possible for businesses of all shapes and sizes to access growth opportunities. All it takes is for you to be brave enough to start honest discussions about your business strategy and your long-term growth plans.
3. Refine your Value Proposition
Test, test and re-test your value proposition regularly, before you’ve even stepped foot in any investor’s office. Understand exactly the types of returns your investors and shareholders will receive, should they choose to invest in your business. Test your value in different scenarios, test your value proposition on your existing clients, test it on the market, test it on your teams, test it on your competitors. You will be asked a lot of questions, and will be expected to answer most of them. Demonstrating any hesitation of your value proposition will leave your potential investors feeling disappointed, and you without the capital you need to grow your business.
Refining your value proposition is more than just a great presentation or slide deck. Your investors will want to understand how you intend to grow their investment. They want to know that their investment is built into your long-term strategy, and will not be used to make a few incremental changes to your business. Your business will transform dramatically, and your investors want to see you demonstrate how their investment will impact, and drive, that transformation.
4. Build your best team
We’ve alluded to it before. Having a team that believes in your vision, is critical to seeing that vision become reality. But we’re not just referring to your leadership or management teams. We’re talking about everyone – from the person who answers the phone in reception, to the person who packs the boxes in the warehouse – all are equally important parts of the process that together builds a brand and a business. The stronger your team, the more resilient it is through tough times. The stronger the team, the better your chances at negotiating change. The stronger the team, the better the propensity to succeed. No doubt, part of your fundraising initiatives will be to grow your team and with any change comes challenge. You want to ensure that you have a company culture that is healthy and productive, that you leverage all skills throughout your team – having the right people in the right jobs, delivering the best success and that everyone understands what it is within their function, as well as the business as a whole, that defines business profit.
5. Find the holes
Part of the fundraising process, especially if you pursue an IPO, is being able to demonstrate solid operational efficiencies. For most clients that we’ve helped, a substantial amount of work was involved getting their operational houses in order to support new reporting structures and responsibilities that occur after fundraising. You’re going to be tested throughout your growth strategy – and whether your plans include globalisation, automation, product development or new territory exploration, your back-office operations will need to demonstrate agility and fluidity – especially when it comes to maintaining customer service deliverables and driving profit margins and returns. Successfully improving operationally means adopting an honest, transparent approach to identifying and correcting issues throughout your business.
6. Select Support
Many of our clients built their businesses from scratch – they understand the amount of hard work required to make things work. And many also understand the importance of having the right business support to augment their business strategy with specialist knowledge to help with business fundraising initiatives. Whoever you choose, whether they are a business mentor or specialist service provider, make sure that they share your passion and long-term vision. You want a partner who is honest about your growth opportunity, has the proven experience to help you build your fundraising portfolio and is able to work alongside you to reach the investor network that’s right for you.