How to get investor ready

Written with:Duet Partners logo

If you’re serious about being successful at fundraising for your small business and doing so in an efficient time frame, you’ll find the content of this superguide highly valuable.

Because this is such a time-consuming, potentially costly and often stressful experience for many investment-reliant businesses, we turned to Farillio’s favourite expert on investment strategy, our own board adviser, Duet Partner’s John Hall, for help in creating this guide and it’s supporting materials. John has helped us and a number of our fellow community businesses with successful fundraising.

What this guide covers:

This comprehensive guide will help you to check that you have everything you need to have in place for a successful fundraise at each stage of the process. It includes:

  • detailed support with ensuring you’ve addressed the factors that investors get excited about, and
  • the criteria that they will use to assess your competence in and commitment to running your business robustly
  • how to develop your financial model and create and manage your cap table
  • valuing your business for investment purposes
  • the excellent tax incentives for investors that you can apply to HMRC for approval to offer
  • your options for fundraising activity (including whether to crowdfund)
  • whether your pitch materials and pitching skills are up to scratch (and how you can improve them if they’re not)
  • what makes a successfully memorable pitch - and how to ensure yours is
  • the acronyms that investors use, the assessment metrics they relate to: what they mean and how to calculate those that are relevant to your business
  • how and when to notify your existing shareholders about your fundraising intentions
  • how to rehearse your pitch and how to pitch under pressure
  • the financial promotion rules and the vital legal information to include in your pitch decks, business plans/info memorandums
  • the acronyms that investors use, the assessment metrics to which they relate: what they mean and how to calculate those that are relevant to your business

What you’ll need/be creating:

The following ‘ingredients’ are covered in this guide:

  1. What investors look for and how to ensure you can deliver what they most want and get excited by

  2. Our investor ready checklist, covering, for example:

  • how to evaluate and present clearly your problem/solution fit

  • understanding and presenting clearly your product/market fit

  • evaluating and describing clearly your route to market

  • presenting and rationalising your business model

  1. Your investor-appropriate business plan, accommodating your position on many of the above components

  2. Your customer development journey in graphic (and pitch-supportive) format

  3. A good financial model for your business

  4. A credible valuation for your business

  5. A compelling pitch deck that will give you and your investor audience confidence when you present it

  6. A compelling business plan/information memorandum (if needed to accompany your pitch materials – which later stage fundraising businesses are likely to need)

  7. Building/evolving your share capital table (cap table) for your business

  8. Your application for SEIS/EIS tax incentives to offer to your investor targets – many of whom will expect to be offered them

  9. The relevant notification(s) to your existing shareholders about your fundraising intentions

  10. A record/log capturing all your interactions with investors, as well as key details on their backgrounds and how to evaluate whether now is a good time to target them for funds

  11. Your ‘on the day of the pitch’ checklist

Preparing for investment and what all investors want

How you prepare for investment matters. Some of that prep-work will depend on whether you’ve raised funds before, how much you’re targeting to raise and who you’re targeting as your ideal investors.

However, every fundraise you undertake should be treated as a stand-alone event, not simply a re-purposing of something you might have produced and presented before.

There are some fundamental principles applicable to all businesses looking to raise funding from external sources on any occasion, and how well you’ve addressed these will have a significant bearing on your prospects of success.

John shares his overarching insights into how to prepare for investment and what investors want to see in the video below.

John's also created a fantastic guide on Duet Partner's website called 'Founders should take this test before seeking investment'. In this guide, John talks expertly about the need to ensure your vision for the business is really solid, and that you've got a clear sense of all the key ingredients of your fundraise story. We highly recommend it.

Being prepared and going into fundraise activity with well-informed expectations will make all the difference to your experience of it, as well as how well you perform under the pressure and scrutiny that comes with investor discussions.

We’d also recommend that you read Farillio’s interview with seasoned, portfolio investor and finance sector expert, Tarne Bevan, who provides additional helpful insights and advice about what you’ll need to show, why investors set such emphasis on these data and whether giving away shares (and a slice of ownership in your business) is a good option vs other funding possibilities.

Tackling your investor-ready checklist

This is one of the most valuable resources you can use at the start of any fundraise activity – whether it’s your first time fundraising or you’re becoming a seasoned fundraiser for your business.

In the video snippet below, John narrates Farillio’s investor-ready checklist and provides his insights on what you should expect to have in place already to be considered a credible, reassuring and exciting investment prospect for any investor before you embark on fundraise activity.

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