What do investors expect?
Even after all the upfront preparation and after you have refined your equity story, prepared investor materials and finalised your business plan, a fundraising process can be time-consuming for a management team.
If you have spent time upfront developing a credible and ambitious business case and if you have a compelling equity story, your company will likely be attracting interest from a range of investors.
Financial investors will want to hold several meeting with management and perform diligence on your company to gain comfort around the business which they are investing in, as well as to firm up their view on valuation and be in a position to make an attractive offer.
During a due diligence process, each investor will have their own questions - in a process where you are interacting with a multitude of buyers, it is not uncommon to be faced with hundreds of different questions.
Key questions to answer when you raise funds
You will also need to be prepared to answer a range of questions about your business. On a most basic level, topics of interest might be:
- Business model?
- Current revenues and growth rates?
- Customer behaviour and trends?
- Cash burn rate and runway?
- Market size and market share?
- Competitive landscape and competitive advantage?
You will need to have a clear understanding of each investor's timelines and what they are looking for, to keep track of all the interested investors and which information each party is interested in receiving. Therefore, it is important to bring a coordinated process.
You can expect to work on:
- Keeping contact with investors throughout the diligence process and tracking your conversations
- Preparing tailored analysis to answer questions
- Managing a virtual data room. This will involve: deciding what information to disclose to investors (in many cases preparing this from scratch) as well as staging timing of the release
- Managing due diligence streams, including meetings with multiple investors
Besides the added value of helping you to position your business and presenting it to investors in the right way, our specialists can help you manage workstreams around process coordination, saving you precious time so that you can focus on running your business.