Knowledge

The one thing you simply must do before looking to raise investment

Investor Relations raising capital

So you’ve decided you want to get some investment for your business.

Perhaps you’ve got an idea that needs some capital to act as fuel to get things rolling? Or perhaps you’ve already got a viable business that you want to take to the next level?

Either way, you’re going to be standing in front of ‘someone’ with the capital you want, trying to convince them why they should give it to you…

Whether you are approaching a bank for a loan or looking for an investor in exchange for shares effectively the ask is the same: “I need capital to build and grow my business – here’s why you should give it to me”

This is where many people fall down; the story may be absolutely incredible. A great idea for a product or service, a nice marketplace etc, but the one thing all investors care about is the numbers. Real numbers. Not made up ‘finger in the air’ numbers. But credible projections based on facts.

We’ve all seen Dragon’s Den right? They stand up there, deliver a great pitch, the dragons get all excited, and it looks like they’ll be fighting over the deal. But then comes the question: “So what are your numbers looking like? What are your projections for year 1?” silence… followed by a stutter and a mumble. The camera pans across the dragons’ faces and you just know that’s it for them. The fact is that no one is investing without solid numbers.

Now, you may not be going on Dragons Den! But don’t be that person…

The one thing you absolutely must do to stand any chance of getting that capital injection is to create a robust and solid financial plan. A model that has good strong assumptions, is clear and credible. Something that makes investors salivate at the thought of investing with you!

That’s exactly what we do here at RJF – with our years of experience on both sides of the fence, both from the investors perspective and from the businesses perspective we’ll help you put together a solid financial model that will stand up to the most intensive scrutiny.

Step 1: Generate realistic assumptions of profit and revenue.

We’ve all seen the spreadsheet millionaires! Anyone can enter a number into a spreadsheet. But these assumptions need to be made on facts and strong market research. We’ll help you really drill down into these numbers and get into the story behind the projections.

Step 2: Produce a sensible forecast of your costs Often overlooked, but costs are just as important as sales. If you underestimate your costs to get the sales you’re going to be in a very tricky position. You’ll either have to go back to investors potentially losing credibility, or you’ll be out of cash with no way of keeping things afloat.

Many of our clients say to us “Well, I’m not a numbers person” and that’s fine. We take care of all the accounting side of things for you, and we’ll help you understand your numbers so you can talk with authority and confidence when questioned.

No one is going to invest with just an idea, but with a solid and robust financial model, you have a great chance of getting the funding you need to get your business growing.

Call us today at RJF for any advice on raising investment – we’re happy to help.