Getting the investment your scale-up business wants will ultimately come down to the calibre of your people. People pitch businesses and they need to convince the potential investors that their money is in safe hands and that they will get a good return on their investment. You need to prove that you are investor-ready.
The investors will look at the people involved in the pitching business and ultimately decide whether they trust, or even like them. In order to have success in your pitch and to be investor-ready, you need to have the right people involved.
This means the right expertise, experience, vision, communication skills and more aspects that will be detailed in this article.
Who you need on your leadership team to be investor-ready
The visionary: This is a relatively grand way of saying you need someone with a plan for the future. Likely to be a person who has been with the business from the start, the founder, but not always. They must be a mix of ambitious and realistic and most importantly be able to effectively communicate their vision and strategic direction to the rest of the team and the potential investor.
Someone who has grown a business before: It’s incredibly useful to have someone who has been through the whole process your company is going through and beyond. This means there’s unlikely to be any horrible surprises along the way. This is reassuring to the investors because they can trust that your company knows what is coming ahead and have therefore planned for it.
Someone who has exited a business before: You need someone in your leadership team who has business exit experience. Thinking about selling your company may seem counterintuitive when you’re putting together a pitch for investment but when it comes to exit strategy, you need to start planning as early as possible.
These don’t need to be three different people in your leadership team of course. In fact, it could be that the second two ‘people’ are the same person. You do need, however, at least one person who covers each of these requirements, so it’s not harmful to double up in some areas.
When putting together your pitch and investor-ready campaign it can be hugely beneficial to hire in some external help to ensure your business is in the best possible place to be pitched.
The accountant: The financials are a crucial side of your pitch. If your numbers don’t add up, or address any level of risk with your business then the investors will be turned off quickly. This is why it is useful to bring in an accountant to ensure that the financial side of your pitch is rock solid and you can move forward confidently.
The lawyer: Pitches, negotiations and the transaction of investment can be, unsurprisingly, entrenched in legal proceedings. It is advisable to have a lawyer at your side to make sure that a) everything is legal, b) you’re not making any mistakes, and c) you’re not being scammed.
The advisor: A common scale-up business mistake is not asking for help when sometimes you need it. It is not a weakness of your business to not have all areas covered in terms of knowledge and experience. What is a weakness is the inability to hire someone to help in those areas. For instance, if you’re struggling with your marketing strategy, then hire a Part-time Marketing Director.
Final people to consider
The aim is to prove to the potential investors that you are a well run and organised business (investor-ready) and these people previously mentioned will all help with that. Do you need a Chairperson in place on your board to head communications with the investors? This is not a necessity but is worth considering.
Do you have a Non-Executive Director on your board? Again, this isn’t a must but this is a topic you must think about and talk about with your team when putting together your investor-ready campaign.
An NED can be beneficial to your company because they’ll bring experience and skills to the table which will help with the running of your business and preparing for your investor pitch. They’re also helpful in terms of winning over an investor as their backing and attachment to your company strengthens your image and shows you have people that believe in your project.
To sum up
Impressive people make successful pitches to investors. The investors look at the people involved in your business. It’s the people that will win you the money.
This is why it is so important to make sure your business has the right personnel involved. Within your board you must have enough experience and knowledge to ensure yourself the best possible chance of creating a successful outcome.
To see whether you’re investor-ready and to locate the areas you might need outside help in, take this FREE Investor-ready diagnostic to receive a personalised report for your business.
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