An enlightening ‘invitation only’ session with some serious investors in businesses last week. They expressed personal opinions on what makes a business interesting to them as investors and some points were worth sharing. In summary they look for:
- Businesses that have the clear capability to be scaled up
- Short, sharp and believable presentations
- ‘Coachability’ of the founder/management team (existing effective use of mentors can be good evidence of that)
- Ability of the business to ‘pivot’ into another line of income, market or business model if ‘Plan A’ doesn’t work. That is much more likely to happen with a good management team rather than a single founder (who can be too fixed on their original concept)
- A team with a mix of skills, but crucially an original hard-worker, a very good implementer and someone with some ‘grey hairs’ and relevant experience (having done it before)
- A good understanding of finance – particularly the need to ensure that funding is in place for the future so that the business doesn’t run out of cash part way through their journey
- A ‘stakeholder group’ that adds value. So other investors, mentors or NED’s that can provide the business with a competitive advantage (such as contracts or links to distribution channels)
Some slightly non-text book points in here that are worth considering for people looking for investment or supporting clients
http://www.cornmillassociates.co.uk/a-candid-view-from-quality-investors/http://www.cornmillassociates.co.uk/a-candid-view-from-quality-investors/http://www.cornmillassociates.co.uk/a-candid-view-from-quality-investors/http://www.cornmillassociates.co.uk/a-candid-view-from-quality-investors/