YOUR CHECK LIST FOR RAISING CAPITAL
As check lists go this one has been kept pretty minimal, see it more as a thought starter for a list of your own!
Check your must do list!
Have all your legal documents prepared and in order including all of your corporate information (ABNs, taxation summaries, core financials, assumptions, insurance, contracts etc) centralised and easily accessible so that it can be supplied to potential investors upon request.
Ensure the information you provide to potential investors is easily understandable, clear and accurate. The business may seem simple and straight forward to you but remember it may well be complex to them. Keep your presentation simple but ALWAYS have every detail close to hand for the investor who asks that curly question. With cloud storage solutions and tablet mobility there can be no excuses for poor preparation.
If successful you will end up in a relationship with these investors, so make sure your new partners and you both have the same goals (equity splits, exit strategy, founders’ roles etc) and that the culture is right.
Be prepared to negotiate and give some ground to get a deal done.
Understand your don’t do list!
Don’t think you have the investor’s cash in the bank until it’s in the bank
Don’t be cocky. You need to show investors that you not only have a good idea, but are willing to listen and learn off them. Most of the time, they are investing 80 per cent in you and 20 per cent in the product.
Don’t hold to an unrealistic goal on valuation – its always better to have 10 per cent of something than 100 per cent of nothing.
Yes it’s a very small list, perhaps the missing advice is that wherever possible seek experienced professional advice, yes it will cost you but long term it will prove to be a very sound investment.
By, Neil Steggall
The Barking Mad Blog
Business Advice with Bite