29 Jan 2020
If you have ambitious plans to grow and scale, will this be the year you get the funding you need to support your plans? Northstar Investment Manager Rick Charnley gives some tips for preparing for investment.
During the 15 years Northstar has been investing we have seen a huge range of businesses across multiple sectors and invested in over 200, in amounts ranging from £10k to £2m. While we look for impressive founders, teams, and ideas in a range of sectors, we have seen a real growth of interest in Clean Tech and Age Tech in the region and the increase of companies focused on solutions in these areas.
Whatever sector you are in though, if you believe this year is the one for you to go for investment, here are some tips that may help.
In the beginning
Make sure you’ve gathered enough objective data and market feedback to convince yourself, as well as others.
Focus on building a great team. The idea is the easy bit, team execution is everything. Show your potential investors what you’ve achieved to date with the limited resources available to you.
Talk to as many people who can help you and test your idea as much as possible. It’s not what you think that’s important, it’s what the customer thinks. Also, try and find mentors who can add real value to what you are doing.
At the stage we are investing, it is unrealistic to expect management teams to either be complete or have all the answers. What we are looking for is the ability to analyse and understand the issues facing their business and make realistic assumptions about how to proceed.
Talk to investors early on at the idea stage – there might be a reason why an investor wouldn’t invest in a particular business or stage of business.
Whilst forecasts are important and demonstrate your view on scalability, show how you will get the first couple of customers – try to get potential customers using your product, even for free. Don’t say that you have no competitors – work out what the next best alternative is to whatever you’re offering. work out how you’re going to achieve getting whatever percentage of the market you’re aiming for – specify the how, not just the how much.
Get the investment figure you’re looking for right and realistic. Focus on how much you need to deliver your objectives over next 12-18 months - make sure you aim for a figure of investment that you are confident of achieving.
When you are selling your business idea to an investor make sure they are selling themselves to you. They should be showing you what they can bring – it will be a partnership. You need to want to work with them.
If you’d like to get in touch for a chat, at whatever stage you’re at, contact us by phone 0191 229 2770 or email firstname.lastname@example.org