Preparing for investment, Sandip Sohal, My Business Counsel

 

 

Sandip SohalThe key to a successful private equity investment is thorough preparation and organisation. It is key that the right impression is made to any investor from the outset. This is where our investment readiness programme can assist when businesses are looking to raise finance.

The programme is delivered through a range of workshops, assessment panels and one-to-one coaching where delegates learn how to create a winning business proposition and how to prepare for that all important investment deal.

 

It is a well-known fact that the best-performing companies are those where the private equity investors:

  1. Bought into the right company at the right time
  2. Backed a strong management team from the outset
  3. Focused on delivering sustained improvements, rather than reinventing the business proposition.

Preparing for investment also means taking time to conduct your own due diligence on an investor. The investor’s experience is key to establishing a relationship and ensuring that you obtain maximum benefit from the investor as it is not all about the cash injection. Most private equity firms invest across sectors but they also believe in the power of specialisation. Our experience has shown that when they focus on particular industry sectors they can find higher-quality deal opportunities, establish credibility with management teams faster and execute operational improvements more easily. But none of this is possible without a period of thorough preparation and analysis of your own business and industry.

 

Our experience has shown that when they focus on particular industry sectors they can find higher-quality deal opportunities, establish credibility with management teams faster and execute operational improvements more easily. But none of this is possible without a period of thorough preparation and analysis of your own business and industry.

 

Success factors

  • Be open minded and helpful. The more time a private equity fund has to assess your business, the more likely it is that the investment will work. Give them the time and space to consider all their options. Also assist where possible. For example prepare a Stage 1 due diligence file with all the documents that typically an investor would want to see at the early stages. This saves the investor time and money and shows that you are committed and commercial in your approach.
  • Fine-tune your business strategy. Use the preparation period to clarify how an injection of new funds will benefit your business. Take advantage of our free audit where we will audit the business from a corporate and intellectual property perspective and report back on areas that require attention before you make a move to introduce yourself to an investor.
  • Agree to the ground rules. Be clear about how the relationship with the investor will work and what will be expected. Don’t leave room for misunderstandings later. Many investors usually appoint an Investor Director to the board to manage and be the link between the investor and the company. This ensures that there is regular update and feedback being exchanged between the parties.
  • Be ready to hit the ground running. Plans for achieving the desired level of business improvement need to be specific, measurable and realistic. Get as much detail in place as you can.
  • Get the support of your key people. The investment is more likely to be a success if your top people can see its benefits and welcome the arrival of outside knowledge.

Ask yourself

  • Are you prepared for change?
  • Which private equity firms have the most experience in your sector?
  • Do you have your house in order? Do you have a shareholder and director service agreement in place
  • Do you know what intellectual property you have? Is it all protected? Can it be better exploited?
  • When, and how, would you like to exit the business?

Contact us to discuss your business and proposition, and take advantage of a free one hour audit of your business.

To take up this offer, please email info@mybusinesscounsel.com or call our Birmingham office on 0121 562 1704 or London office on 0203 507 0152.

029 2033 8144 | info@xenos.co.uk | www.xenos.co.uk