If you are planning for growth then you’ll be wanting to find investment to inject finance into your company. There are some important steps to take before you commit to an investor to ensure that your business is ready for investment. Verde believe preparation and planning is key to finding the right investor and the right investment. The more detail and rigour that goes into the preparation phase and the more perseverance you apply when searching for finance, the higher likelihood that it will turn into success.
Researching into Your Market
Before thinking about the actual investment, you must be highly knowledgeable on your industry or the market you’re are involved in. Strong and reliable market data will be essential for research into current and future trends, the value and extent of your market and the demand and growth of your sector will be vital knowledge you need to possess. This will allow you to evaluate whether or not it will be worthwhile for investors to invest in you.
Researching Your Finance
You must calculate all possible costs in order to ensure that you are appropriately valuing your business. Investors will not be interested in your business if the figures lack substance with little justification. Potential investors are far too familiar with “too good to be true” projects so make sure the numbers stand up to scrutiny.
Researching your options to provide options with a number of different investors will make it easier for you to find the right investor for your company. Work out what you want from your possible investor as they can offer much more than just money such as skills, industry knowledge and contacts. Carrying out your own due diligence will help you to not waste your time and valuable resources. In addition, you don’t have to settle for just one type of investment. Types of finance can include Angels, Venture Capitalists as well as friends/family. Widening and combining your options will allow you to pick out the best finance specific to your company and keep the cost of capital at a low.
Financial Documents
Ensuring your slide decks, valuation, business plan and financial forecasts are correct and up to date is essential for investors to take the project seriously. It is important that your models are robust and justified so your investor believes and therefore can be enthusiastic about the venture. It might be useful to create a teaser or one-pager document as a summary to show the investor the outline of the project. It should include; summary of opportunity, amount of investment being sought, kind of business going to be generated and potential return.
There are also ways you can supercharge your business plan to help convince the investor further of your ideas. Make your plan simple and easy to follow, reduce jargon and split into readable sections. Having a clear business plan that reads well and is backed up with good financial data is proven to make you money.
Sign up to Tax Incentives
Registering for investment schemes, such as enterprise investment or seed enterprise investment, can give investors a substantial and attractive tax break. They are able to tax advantage of tax breaks that could save up to 50 per cent for SEIS and 30 per cent for EIS. Demonstrating this to investors can position the investment in a far more attractive light.
Here at Verde, we can help you set up an attractive plan, valuation and forecast model to show to potential investors. We can also introduce you to them and show you how to pitch your ideas. We’ve worked with debt, private equity, angel, trade and industry investors, advised on enterprise investment schemes (EIS) and seed enterprise investment schemes (SEIS), as well as being experienced in crowdfunding and campaigning, so you can be sure we’ll find you the right solution.
