Raising fresh equity

Author: Guy Rigby

The Challenge

I need more equity to grow my business - how do I attract it?

The Solution

Be clear about what the money is for

  • Identify the purpose and benefits of the required investment
  • Be specific about how the monies will be used
  • Quantify the potential of the opportunities to the business
  • Provide forecasts to cover at least the next three years with clear objectives and strategies
  • Ensure that the forecasts are based on realistic assumptions

Show where you are now

  • Prepare a business plan explaining the historical growth of the business, its operations, key competitors and main clients
  • Spell out what is unique about your offering
  • Identify the strengths and weaknesses of the business and provide solutions as to how any weaknesses will be addressed
  • Assess whether your management team is credible and whether you need to make further hires
  • Be prepared for investors to carry out detailed due diligence on your business

Identify how the investors will be rewarded

  • Consider how the business will finance the investment as investors will usually expect a regular return
  • Decide how much equity you are prepared to give away
  • Consider the use of loans and performance targets
  • Identify where the investors' exit will come from
  • Seek professional advice on the terms of any potential investment

Carefully research your target investors

  • Make sure that you target an audience who is keen on your business sector and the amount of money that you are looking for
  • Understand what else they have done within your sector
  • Ensure that your first approach is focused and clear in order to move the process forward to a meeting
  • Don't forget to consider other potential investment sources, such as family and friends

For expert help to attract fresh equity for your business, contact Guy Rigby on 020 7131 8213 or email Guy Rigby.