This episode is all about what investors are looking for.
Not banks or credit unions, that was last week, but investors.
And which type of investor you will be pitching your company to depends on your exit strategy.
If you’re looking to sell your company lock, stock and barrel, that’s one type of exit. This could be a sale to your kids because you want to keep the business in the family, to another company who wants to expand their market share, or to an individual who wants to buy a mature, proven business.
If you’re looking to “go public” in an IPO (initial public offering), that’s another. This is where angel investors and venture capitalists come in. These guys, and they are mostly guys, are accredited investors–high rollers looking to gamble and win big.
And if you’re not looking to go public but want long-term investors to grow, that’s yet another. DPOs, or direct public offerings, involve unaccredited investors who are aligned with the mission of the company, kinda like crowdfunding but different.
The good news is that no matter what type of investor you’re engaging with, or what your exit strategy, as I mentioned in last week’s post, getting “investor ready” involves the same elements:
- Good financial records.
- Complete business plan.
- Financial projections.
- Solid management team.
Whether you are pitching to an angel, a VC, a family member, or a buyer, it pays to know what all they are looking for. Because different types of investors are focused on different aspects. The bank is interested in past performance and collateral. An investor is interested in the future and who you are: the jockey, not the horse. Both are interested in past and future; however, each places their emphasis on different parts of the picture.
Your CFO can prepare the information they want in the way they expect to see it. Investors want to see the numbers, and they want to see how you are going to reach those numbers. They want to see how they are going to get a big return on their money. And it gives investors comfort to know that you are working with a financial professional; it demonstrates to them that you know enough of what you don’t know to get the right support.
They want to see your financial history, so this means you have to have up-t0-date financial records.
They want to see your written plan on how you expect to get where you want to go, so this means you have to have a business plan that details every aspect of how you run your company: marketing, management team, financial projections, and production.
No matter what your exit strategy, working with a CFO is essential to your business health and growth. What to know more about how CFO services might help your business? Take the first step and schedule a time to talk with me about how I can help you get your business “investor ready.”