How to go about getting investors into my business
Discussion
Would anyone have any pointers about the above? I have a business at the moment which has a great reputation, brand and is growing significantly year on year (doubling turnover and profits increasing at a significant rate). The only thing thats holding me back from taking a larger slice of the market is cash flow hence looking into private equity or investors. If i have the investment i can recruit individuals more aggressively than i currently am and also increase investment in our online side of things which will generate more leads etc and therefore more income.
Does anyone have any contacts i can chat to or has anyone been through a similar dilemma and can share their experiences with me?
Does anyone have any contacts i can chat to or has anyone been through a similar dilemma and can share their experiences with me?
Thing to remember with PE Investors and similar is that they will want a pound of flesh and some. That's not to say this is a bad thing but something that can be overlooked when there's cash on the table.
This strikes a chord at the moment as we have a client who invented a water-saving product and has spent 12 years of his life developing it and bringing this thing to market. Two years ago he brought in some PE money and last week he was removed from the company totally - albeit with a nice wedge of cash but not the outcome he would have wanted.
This strikes a chord at the moment as we have a client who invented a water-saving product and has spent 12 years of his life developing it and bringing this thing to market. Two years ago he brought in some PE money and last week he was removed from the company totally - albeit with a nice wedge of cash but not the outcome he would have wanted.
StevieBee said:
Thing to remember with PE Investors and similar is that they will want a pound of flesh and some. That's not to say this is a bad thing but something that can be overlooked when there's cash on the table.
This strikes a chord at the moment as we have a client who invented a water-saving product and has spent 12 years of his life developing it and bringing this thing to market. Two years ago he brought in some PE money and last week he was removed from the company totally - albeit with a nice wedge of cash but not the outcome he would have wanted.
Interesting. I guess once he's invented it, there's really nothing else for him to do and the investors know this. He's not key to the production eg they need to use his and only his hair.This strikes a chord at the moment as we have a client who invented a water-saving product and has spent 12 years of his life developing it and bringing this thing to market. Two years ago he brought in some PE money and last week he was removed from the company totally - albeit with a nice wedge of cash but not the outcome he would have wanted.
Are you looking for debt or equity? If equity then a lot will (to state the obvious!) depend on valuation and an assessment of the business - are there hard assets, how vulnerable it is to competition, key man risk (you!) etc. That's not an entirely straightforward process and what a PE firm might think your business is worth (probably something like 6*net profit) could be very different from your own assessment.
If you just need cash, not equity, which sounds like it might be the case, and the business is trading well and profitably and has a few years of accounts then the likes of funding circle should be an option.
If you just need cash, not equity, which sounds like it might be the case, and the business is trading well and profitably and has a few years of accounts then the likes of funding circle should be an option.
Hoofy said:
StevieBee said:
Thing to remember with PE Investors and similar is that they will want a pound of flesh and some. That's not to say this is a bad thing but something that can be overlooked when there's cash on the table.
This strikes a chord at the moment as we have a client who invented a water-saving product and has spent 12 years of his life developing it and bringing this thing to market. Two years ago he brought in some PE money and last week he was removed from the company totally - albeit with a nice wedge of cash but not the outcome he would have wanted.
Interesting. I guess once he's invented it, there's really nothing else for him to do and the investors know this. He's not key to the production eg they need to use his and only his hair.This strikes a chord at the moment as we have a client who invented a water-saving product and has spent 12 years of his life developing it and bringing this thing to market. Two years ago he brought in some PE money and last week he was removed from the company totally - albeit with a nice wedge of cash but not the outcome he would have wanted.
StevieBee said:
Hoofy said:
StevieBee said:
Thing to remember with PE Investors and similar is that they will want a pound of flesh and some. That's not to say this is a bad thing but something that can be overlooked when there's cash on the table.
This strikes a chord at the moment as we have a client who invented a water-saving product and has spent 12 years of his life developing it and bringing this thing to market. Two years ago he brought in some PE money and last week he was removed from the company totally - albeit with a nice wedge of cash but not the outcome he would have wanted.
Interesting. I guess once he's invented it, there's really nothing else for him to do and the investors know this. He's not key to the production eg they need to use his and only his hair.This strikes a chord at the moment as we have a client who invented a water-saving product and has spent 12 years of his life developing it and bringing this thing to market. Two years ago he brought in some PE money and last week he was removed from the company totally - albeit with a nice wedge of cash but not the outcome he would have wanted.
What sort of figures are involved? There's a huge difference between £10k to help a business t/o of £100k a year get a leg up, and £100k getting a £1m one moved along.
Investors, in the sense that they take a % of the company, will want both equity and some degree of control (director(s) on the board, possibly revised articles, various restrictions on your future conduct and so on. You might be able to take on secured or unsecured debt. Unsecured you may find yourself giving directors guarantees.
Assuming it's a pretty small business, if you think it's solid and your plans could come to fruition, do everything you can to fund it personally before giving away equity or security in return for cash. The caveat to this is if you feel and investor or investors could bring skills, knowledge, experience and contacts that would grow the business disproportionately to the level of their investment.
Investors, in the sense that they take a % of the company, will want both equity and some degree of control (director(s) on the board, possibly revised articles, various restrictions on your future conduct and so on. You might be able to take on secured or unsecured debt. Unsecured you may find yourself giving directors guarantees.
Assuming it's a pretty small business, if you think it's solid and your plans could come to fruition, do everything you can to fund it personally before giving away equity or security in return for cash. The caveat to this is if you feel and investor or investors could bring skills, knowledge, experience and contacts that would grow the business disproportionately to the level of their investment.
Thanks guys, all good info. The funds i'd to do it properly and grow at a rapid rate of knots would be fairly large ie £1m, that would allow me to fund the business and growth during the drain on cash flow period which is generally 8 months before i see a return from anyone i take on. The business has 33 staff at the moment and will be at 45 plus by the end of the year, a cash injection would allow me to turbocharge the recruitment this year meaning the pipeline business and costs are all on this years accounts and next year would show epic turnover and profits. At the moment i can only recruit if i have the cashflow to do it, The business is very scalable, we invested heavily over the last couple of years so all parts of the jigsaw are now in place, i now need staff and a increase in leads (the latter is the easy bit)
batmanreturns said:
Not for the amounts i would like, i can get certain figures but not enough. If i'm going to go down that route it would need to be sums that would make a difference and a couple of hundred thousand does not go very far these days!
Personally I'd prefer slower growth with control. Also, is your sort of business in demand with investors? I am not being a smart arse, but it's not something that would instinctively be drawn to.33 staff now from 0 last April is pretty heavy acceleration (assuming co house info is correct on it being dormant at that point).
I would have thought the biggest challenge is finding advisors and paraplanners rather than paying them.
If you're looking to build the business as an asset rather than an income, I'd be wary of beong too reliant on lead gen, especially the bought in type. Investment into growing your own brand whilst building up cross-selling opportunities and growing a referral network might be an idea.
I spend about £250k per month on FS lead generation (not specifically mortgages).
I would have thought the biggest challenge is finding advisors and paraplanners rather than paying them.
If you're looking to build the business as an asset rather than an income, I'd be wary of beong too reliant on lead gen, especially the bought in type. Investment into growing your own brand whilst building up cross-selling opportunities and growing a referral network might be an idea.
I spend about £250k per month on FS lead generation (not specifically mortgages).
the reason for investment are that the sums i'd need to do justice are far higher than i can personally lay my hands on. the business can carry on as it is, it's just that growth would be slower as it would be done organically which is fine, but with some investment it could be huge.
Regards companies house, we've been going 7 years so i'm not sure why it shows as only going for a year and from 0-30 staff. 30 Staff took 7 years to reach.
Regards companies house, we've been going 7 years so i'm not sure why it shows as only going for a year and from 0-30 staff. 30 Staff took 7 years to reach.
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