Tumultuous times can create opportunities for companies that are fortunate enough to be agile enough to pivot and twist – just enough to not only survive, but thrive. 

This seems like the perfect moment to revisit the hoops that a business will have to calmly traverse in order to receive that all important capital injection, and validation from third party investors…

Firstly, you need to convince the investors that you are the next Beatles, and that THEY could be turning down the next Beatles… FOMO is your most powerful friend when talking to investors. And when you have peaked the hard surface of investor interest – that’s when it all gets serious. But let’s not see it as daunting, let’s create an analogy that makes the experience, almost pleasurable. Perhaps think of it as a very long dinner, with a lot of courses, with people you don’t quite know yet, but if the meal goes well, you will be doing this again, alot… 

The Amuse Bouche – Documents

Correct Legal Structure, what is being invested into – is it clear? 

Executive Summary – short and slightly longer

Business Plan 

Presentation Deck 

Forecasts

Share Capitalisation Table 

Investor List 

Network build up 

All of the documents and legals – everything matching everything. No spelling mistakes or contradictions please.

Hoop 1 is cleared, and plates are removed…. So we are on to the second course:

Starter of Due Diligence 

All of the documents / support indexed and ready for review – Budgets / Forecast / Contracts / Employment contracts / IP list / Insurance / Shareholder list / Litigation details – tyres are kicked by very clever people, with impressive degrees…

There will be a discussion about valuation – money going in, in exchange for ownership percentage of your business… negotiations and back and forth – Things are now shifting positively… well done, take a sip of water and wipe your mouth with the napkin, calmly.

Main Course Step 3 Term Sheet / lead investor and the thumping legal tomes:

Term Sheet 

Shareholders Agreement 

Subscription Agreement – sell shares at certain price, legal stuff.

Articles of Association – update these.

*You absolutely do not need to know how to do all of this, but make sure that someone on your team does know and that you can join in with the conversations.

Dessert and the bill arrives – its the best part – the cash, and you will want to make the business as attractive to investors as you possibly can, by doing some basics like registering for EIS / SEIS (Enterprise Investment Scheme) / Seed Enterprise Investment Scheme – because early stage investors will get a tax benefit. If you have performed well, the investors will “pick up the tab”.

Whilst you suck on the mints… consider the fact, that this is just the beginning of the beautiful relationship, because you will meet again – ALOT, even if its just for coffee or a piece of cake – Communication and Visibility is essential.

Once you have the investors support, you want to maintain and nourish that, and they want to know how the business, product, people, numbers and their money is doing. Keeping them happy means that they are likely to invest again and support the next raise – no indigestion, recommend you to your friends and repeat business will be inevitable…

**Please join The Founders of The Cauldron – currently raising #investment #funding on #Seedrs – tonight at 6pm – by Zoom.https://www.linkedin.com/embeds/publishingEmbed.html?articleId=7186760607686929338