At our latest event, Fundraising for Growth, we bought together a panel of experts specialising in different areas of fundraising, from government funding to venture capital for high growth scale-ups, through to private equity funding.
Our expert panel included:
- Kezia Williamson from the Knowledge Transfer Network, specialising in government funding
- Paul Atkinson from Par Equity, venture capital for high growth small business scale-ups
- David Atkinson from Panoramic Growth Equity, private equity funding for medium sized scale-ups
This expertise was complimented by our co-event sponsor Duggie Carlyle, from Carlyle Associates, who shared his views on identifying and sourcing strategic talent required to ensure successful stewardship of the growth plan.
Working with our own M&A expert Garth Shephard, the panel discussed, debated and offered insights into funding for growth. The questions flooded in from a room full of tech and digital business owners from fast-growing companies.
The theme covered what you should think about when fundraising for growth and planning for the future. Much wisdom was shared: summarised below are the key takeaways:
- Plan ahead:
- Don’t wait to consider investment when you’re up against it financially. An investment should be proactively planned for. It should never be a “get out of jail” card when you’re short of cash.
- A corporate finance advisor can challenge your thinking and assist you in putting strong financial models together that are in tune with the requirements of investors.
- Think like an investor:
- You’ll need intellectual market context when making your business an attractive asset.
- You should already have an idea about who might buy your business before you seek out investment.
- Know what investors are looking for. For example, Par Equity explained that they aren’t interested if you’re not selling internationally and Panoramic Growth Equity said that the most important thing for them is trust; knowing they will be able to work with you.
- Most problems in investing come down to people, not products. They need to be able to back your management, so it’s extremely important that you’re able to work with them, as they often take a seat on the board.
- Don’t try to eat the elephant in one bite:
- There are multiple steps to reach to Unicorn status. Think about and plan each step.
- Set clear and realistic valuations based on evidence.
- The Knowledge Transfer Network recommended that you think about the people that can be part of your growth who don’t necessarily need to be employed to be part of your team (investors, collaborators, your supply chain, access to facilities etc.)
- Understand your strengths and weaknesses:
- Seek relevant help to cover weaknesses and enhance strengths.
- Find out how a growth advisor, corporate finance partner, VC/PE firm etc. can help you on your journey.
- A ‘middle man’ or advisor can navigate through issues, help you create and articulate your business plan for investors, help with risk profiling. They’re quite often sat on your board or inside your business working and growing with you.
- Investors want to see you are versatile:
- You need to have more than just one product and, ideally, operate in more than one market.
- You need to be able to demonstrate that you have the ability to sell and support your product or service and make sure it is defensible in open market.
- Have a strong and scaled leadership and operations team:
- You need the skills within your leadership and operations teams to execute on the plans you’re raising the finance on.
- Incentivise leadership and senior management to scale your teams and outputs.
- Be realistic:
- Pace your scaling wisely.
- Be clear on the timing for your plan (not just 3yrs from now) and put detail behind your valuations.
- Be very clear about the addressable market you are focussing on and quantify it accurately.
- It’s not just about the money:
- It’s about the value that can be added. Think wider about things that will help you deliver on your growth plan.
- There are a number of other things to think about – board advisory, corporate buyer intros, reference customers, exit advice, make useful introductions, provide expertise, talent acquisition – getting the right people in, keeping management focussed on strategy.
- Think about your possible exit event early:
- If you’re thinking about your exit you’re thinking about your customers and route to market.
- The right time to plan for exit is right from the start.
- Plan for it and watch the market for the right time to exit.
- Know the buyers and the potential.
- Reverse engineer a start-up. Create must have assets.
- Link your growth strategy with your exit strategy.
- Get the right support and advice throughout the whole process.
A big thank you to our panellists, collaborators and our attendees for a fantastic evening in Edinburgh. If you’re interested in finding out more on how we can help companies grow and realise value, contact Phil Gripton at firstname.lastname@example.org.