When scaling up a business it’s usually the case that you’ve got to spend some money to make money. It’s therefore no surprise the vast majority of businesses will, at some stage, look to raise equity, debt, or a mixture of the two. There are a wealth of funds, grants, venture capital investors, private equity investors, trade buyers, angel investors, banks and other lenders who have cash set aside for investment in businesses of all shapes and sizes. The challenge for business owners and entrepreneurs is how to stand above the multitudes of other businesses looking to raise capital. Often this starts with a pitch deck.

The pitch deck needs to show:

• What you are bringing to the table
• Why your offering is better than the competition
• How and when the business will generate a return investment
• The steps you have taken to derisk the investment.

The majority of business owners come from non-financial roles. They are developers, engineers, scientists, dreamers. Running a high growth company means they must wear many hats, and when it comes to raising investment, founders need to remember they are selling a business, not a lifestyle. You need to consider what type of investment is best suited for your business. What do you want from an investor? It’s not just the cash that investors can bring to a business. There may also be board level strategic support, access to new markets and connections that can boost the company’s products, service and systems.

You need to consider what type of investment is best suited for your business. What do you want from an investor? It’s not just cash that investors can bring to a business. There may also be board level strategic support, access to new markets and connections that can boost the company’s products, services and systems. You need to consider what you and your existing team are bringing to the table. Is your business ready to scale? How can you demonstrate this?

As much as investors will nod enthusiastically and cheer along to sustainability, new technologies, or game changing processes, the sad reality is that their number one priority is a positive return on their investment. If the business’ financial models are not sound, investors will walk away from a deal, no matter how exciting it may be as an intention or a dream.

Investors want to know that you understand your business: what makes it unique, what gives it an edge over competitors. Investors want to help ambitious individuals succeed in their vision, but there must be a clear plan in place that the business can follow to achieve its mission.

You should also consider and make plans to set out any follow-on funding that will be needed after the current round. Future investors will be interested in the existing funding and investors you already have on board, and how much of your own capital /friend’s and family’s capital is committed to the business.

Small businesses are inherently risky. Investors therefore want to see that you have done all you can to derisk your business in order to maximise the return on their investment. Again this can be demonstrated with robust financial models and having a solid senior management team in place, including an appropriate level of financial leadership.

Many times otherwise attractive businesses let themselves down by not investing in expert financial advice pre-fundraising. Any investor will take a keen interest in the financial assumptions and will be quick to turn down an investment opportunity that has not taken their financial forecasting seriously as this shows a lack of preparation, meaning greater likelihood of the business failing when things move slower (or faster) than expected.

At Shaw Gibbs we work with many fast growing businesses that are looking for their first investment or subsequent investment, providing fractional finance support and assisting with preparing financial models, forecasts and pitch decks. Financial models need to be focused, clear and authentic. People buy from people they trust; assumptions need to be sound, reasonable and able to withstand scrutiny.

Business owners can get blindsided by what they do day-to-day or what they are trying to achieve in the long-term, and sometimes forget that an investment requires a return, meaning the business plan needs to be viable and must have an achievable path towards profitability. Before approaching a potential investor, consider what exactly you are selling and how this benefits your target market. Do the projections clearly show that the business scalable and is on track to make a positive return on investment in the future?

Business owners need to identify and account for the inherent risks in their models so as to be able to mitigate them. Alongside this, the pitch needs to be clear as to the business’ USP (Unique Selling Point) – what sets it ahead of others in the same field?

The days of “if you build it they will come,” are over. You need to tell investors who you’re building for and why those people will want to come to you. A clear pitch deck backed by a sound understanding of the business’ financial and strategic position will help win the trust of investors and other stakeholders that can help your business succeed.