Making Your Company Investor-Ready

16 November 2018

It should be pretty obvious how companies grow: hire more employees, take on more clients and get the financial investment you need to grow. But without investment, your company’s effectively stuck in limbo. You can’t bring on more staff because you can’t afford them, and you can’t attract investment because there’s no clear indicator of growth. How do you avoid this catch-22? How do you make your company investor-ready?

Find the Right Investor For You

When drafting a business plan to show off your company to potential investors, it’s important to consider what kind of investor you’re looking for. A bank? A venture capitalist firm? Friends and colleagues, even? You need to tailor your business plan to their individual needs in order to make your company investor-ready.

Depending on the particular kind of investor you’re looking for, they’ll be interested in a couple of things: burn rate, the Adjusted Present Value (APV) using specific costs of capital, exit strategy options, potential valuations, or they may be more interested in collateral you can provide.

Research Is Key

This has already been covered in our blog about startups, but research doesn’t ever stop when it comes to making your company investor-ready. Look into the markets you’re trying to penetrate, look at what your competitors, big and small, are doing, and what you can do in that market without relying on a miracle.

Investors aren’t going to drop thousands or even millions of pounds on your business when they’re not convinced you can do what you’re talking about, and you convince them with research.

Sell Your Plan

Now that you’ve compiled all the data you’ll ever need, you need to condense it into something an outsider to your business can understand. You can overwhelm them with comprehensive spreadsheets if they’re keen on stats and numbers, or condense it into a quick PowerPoint presentation with the basics if they’re not. Either way, your stats need to convince them that investing in your company is not only safe, but will produce profit at some point.

Reaching that point in a business where you need external investment can be stressful and confusing, but when you have a solid plan and a realistic mindset, you can sway any investor and make your company investor-ready. NWD Accountancy has a wide range of services available for local businesses in the Darlington area.