So, having decided that VC investment is right for you and for your business – that you want to generate growth and an exit for your business – you have to get prepared.
The climax of Act 2 on the investment readiness journey is “The Pitch” – the presentation to your investors to persuade them of the value and potential of your business. The short film above shares some top tips and preparation tools that you will need for your pitch. The key recommendations are as follows:
Sally Luton (Director of CAF)
- Present a clear narrative about why VC funding is right for this business and an explanation of the use to which the investment will be put.
- Share an understanding of your sector and a realistic growth rate
- Clarity about how the monies will be returned – how much
Neill Watson (2Fold20 Play)
- Prepare your presentation – focus in on key information that the panel are likely to want to know
- Practise the key points you need to get across as a pitch team
- Attempt to answer in the body of the pitch all the questions you might get asked.
Veejay Lingiah (Artbrand Holdings)
- Be natural – use the pitch to explain your business to the panel
- Let them get to understand you as people and as creatives
- Explain your business, the environment and your ambitions for the business
- Think about whom you bring to the pitch and be aware of the body language in your team
- Think about your contingency plan if the investment doesn’t come through
- Show you understand, and can keep control of, financials
- How strong are your sales projections and are the costs correct?
- Is there any headroom in your cash flow?
- Smile, be confident, show good interpersonal skills
- Do what you can to instill in the panel a sense of confidence in the business and the team
There’s clearly a lot of work in ensuring that you are investment ready and able to make that pitch confidently. For start-up businesses that can be daunting. They may have a very good grasp of what they want to do creatively but be less clear on some of the business aspects and the growth potential.
This is where some specialist help can be invaluable. If you are feeling underconfident about some of the financial elements of your plan, an external accountant or business consultant can really add value. You can also educate yourself on some company finance basics at the wonderful Khan Academy.
Businesses who were approved to work with CAF had the services of an investment manager. Finance director Karen Stokes explains below what an investment manager is and how they can work with you to make you and your business “pitch ready”.
The investment manager then ensures businesses are ready to go to the panel armed and ready with the resources, information and fully formed plan. As Karen says, they make sure that “all the ducks are in a row”. They may also ensure that there is some contingency planning in place if the pitch to the panel is rejected.
Neill Watson of 20Fold20 Play worked with a CAF investment manager to create a successful pitch. In the film below he outlines the level of depth of their planning and the detailed preparation that took place in the run up to pitching to the CAF investment panel.
The investment manager relationship is an important one. Post-investment they may be appointed as a non-executive director of the Board of the investee company. If the pitch is not successful, some companies retain the services of the investment manager (or external consultant) in any event; the advisor has spent time to get to know the business and share in that business’s vision.
Preparation is the key to investment readiness.
While CAF is not actively taking on investments or appointing investment managers at this time, the Growth Accelerator programme operated by Grant Thornton offers highly subsidised mentoring and training in their “Access to Finance” strand that can fulfil a similar role.