There is a growing acceptance in New Zealand business that to grow your business to the size of your aspirations; you may need the help of private investors. Expanding by increasing debt levels may place additional cash flow burdens on your business.
Attracting the right shareholder investors takes strategic planning. Getting it right will result in the business achieving planned milestones. Strategic shareholders bring the greatest competitive edge.
Targeting Strategic Shareholders
The goal of bringing on board a shareholder investor is generally to achieve growth. Growth can be achieved by the injection of funds that shareholder brings; and by tapping into their expertise and connections. They will invest if they believe in your potential.
Investors are wanting to see that you have
developed proven strategies,
built competencies such as positive reputations, technological expertise, and logistics excellence, and
a compelling narrative.
There are a number of factors which affect the success of attracting investors. These include being able to:
Articulate your narrative, strategy, and competitive edge.
Price the investment opportunity.
Be compelling and demonstrate consistency.
Have quality marketing materials.
Efficiently, and with regularity, collate information to present to the potential investors.
Identify and scrutinise potential investors.
Successfully navigate the scrutiny of a potential investor.
How Business Studio Innovators can help you?
There are usually three key documents that are prepared for investors.
An initial investment brief or teaser;
An information memorandum and
A presentation for management.
On occasion, a fourth document may be prepared or evaluated. That is a budget that demonstrates how the investment will be utilised and the expected impact of any investment in plant and equipment.
The investment brief is designed to help you identify potential investors and eliminate those who are unlikely to invest. It will quickly and efficiently outline your compelling narrative and will summarise key financial, operational and market information.
The investment memorandum (IM) provides investors with information on the opportunity. It outlines the investment objectives, risks, and terms of the investment. The IM includes items such as a company's financial statements, management biographies, a detailed description of the business operations, and more. It helps the investor make a non-binding offer, which may then be subject to due diligence.
A management presentation is a document that helps directors position the proposed investment strategy to the management team so they can collectively work together to convince investors of the opportunity.
You know your business and how the investment has the ability to transform your offering. Preparation of documents for investors takes considerable time and effort, and the more you are seeking, the more professional and comprehensive document is expected.
The team at Business Studio can help prepare such documents or can help critique what you have prepared.
Likewise, we can help you prepare for a due diligence review, helping you identify risks in your current financial information which could potentially affect the value of a business and how best to explain them to investors.