Len McDowall

In my article “How to be Investor Ready” (18th of September 2007) I discussed a number of factors that a business owner needs to take into account so as to be “investor ready” before approaching investors.

The question is then how do you then actually deal with, and prepare for meetings with those investors?

My suggestion is that you should create some “exclusivity” about the way you approach them.

Use a “rifle shot” approach by selecting say six (6) target investors which are in your opinion the best that would suit your proposition and send your business plan or information memorandum to them.

If none of these are willing to invest then select another six (6) and so on……don’t approach everyone at once as you will have difficulty handling requests for meetings and information.

Also investors don’t like deals that have been “shopped around” so when raising capital; try to keep it “exclusive”.

Compile a list of the questions that are most likely to be asked by investors and be ready to answer them.

Ensure that your documentation is ready before approaching them. Items such as finanicial accounts, intellectual property documentation, major contracts, key staff contracts, etc are incorporated in a due diligence file and available as they are sure to be asked for. 

I suggest that you even “role play” how you think the meeting will be conducted, using a friendly third party who can objectively comment and assist you. Remember that you will be speaking for most of the time, with the investor asking questions, so plan how you do your presentation.

Try to put together a short Powerpoint slide show as the investor will remember more if he/she both sees and hears the information.

Try to set a reasonable timetable for the investors to get back to you with expressions of interest so as you have some control over the procedure.

Preferably the CEO should do the main part of the presentation and the CFO of the company should present the financials aspects.

Finally keep the presentation reasonably short as investors have limited time. A good way is to ask how much time is available at the start of the meeting and restrict your presentation to suit.

Good Luck!

Len McDowall

The share market is somewhat unpredicatable at the moment and the appetitie for new Initial Public Offerings (IPO’s) has all but ground to a halt. However that doesn’t mean that there are not still a large number of companies seeking capital.

As a matter of interest I thought I would share with you the types of deals that I have recently assessed, the industries, the typical phases they are in and the investment required.

Industries include:

Web Hosting, Resources (mineral deposit), Funds Management (Business Loans), Property Development, Energy Market (New Competitor - Retail Energy), Wireless Telecommunications (Modems), Employement Website, Pet Foods.

The majority of these companies are either Start Up or Early Stage, with only a small percentage looking for capital to expand their business. The average capital required is around $1M however some opportunities are seeking as high as $20M.

As mentioned in my previous blogs many investors due to the current market are not looking for start up businesses or entreprenuers with agressive growth plans, they are looking for businesses that can show a solid business plan, strong management team and conservative strategies.  The majority of deals I have reviewed lately are startup or early stage and the market is turning against entreprenuers. Business models are more than ever being questioned, more research will be done by investors, more extensive diligence processes, more information asked for and required to be supplied. For the startups and early stage opportunities, theire are still funding opportunities but more than ever the business will need to ensure they are “investor ready” and have a solid business plan and strategy.

Len McDowall