3 things drove our successful crowdfunding campaign – planning, pump-priming and PR” says Matt Dyson, Co-founder and CEO of Rockit

Matt Dyson Co-founder and CEO of Rockit knows what successful crowdfunding takes. He and his team beat their crowdfunding target and overfunded to raise £253,000 in May 2018. It’s been quite a ride. Rockit only launched in October 2017 and to beat their investment target within eight months of trading is testament to the efforts of the team.

Hatty Fawcett of Crowdfunding Accelerator asked Matt what he thinks made the difference to Rockit’s successful crowdfunding campaign.

Hatty: What attracted you to crowdfunding for your investment raise?

“Crowdfunding is a fantastic opportunity to increase exposure at the same time as raising investment.”

Matt: Ever since we launched Rockit, the portable baby rocker, in October 2017, its been creating a real buzz. As we started thinking about raising investment, we had already built up quite a following amongst parents both in the UK and abroad. Crowdfunding seemed a perfect match as we could access a large pool of potential investors whilst simultaneously building a group of Rockit brand advocates. It was a fantastic opportunity to increase our exposure at the same time as raising the investment.

Hatty: Many early-stage businesses with a strong product start with reward-based crowdfunding, why did you choose to do equity crowdfunding?

“Our investors will benefit from the success of the business as a whole, not just a single product.”

Matt: We had already launched Rockit and it was gaining traction in the market. The team were working on a range of follow-up products to solve various child sleep issues. We chose to focus on equity crowdfunding to raise capital to bring these new products to market as quickly as possible, but also to increase marketing spend both in the UK and overseas. Our investors will benefit from the success of the business as a whole, not just a single product.

Hatty: What do you attribute your successful crowdfunding campaign to?

Matt: The appeal of our product has to be a factor. Rockit itself certainly caught the eye of investors as there is nothing quite like it on the market.

Thorough preparation for the campaign was another key attribute.

“We spent several months planning and preparing the video, pitch deck and financial forecasts. Several serial investors commented on the attention to detail and the fact that we supported our assumptions with detailed explanations.”

Hatty: A lot of crowdfunding platforms won’t accept you on to their platform until you have secured some of your investment target. Did you have a “lead investor”?

“We managed to reach 40% of our funding target prior to going live…that pump-priming meant the campaign got off to a flying start.”

Matt: I agree that securing some of your investment prior to putting your campaign live is important for successful crowdfunding. We managed to reach 40% of our funding target prior to going live on Crowdcube so we had primed the pump but we didn’t have a single lead investor. Instead we were backed by a number of smaller investors who had followed our progress over the previous months. This, coupled with the fact that we still had some SEIS allowance for the early investors, meant that the campaign got off to a flying start.

Hatty: What promotional activities did you undertake to bring “the crowd” – those you didn’t know prior to crowdfunding – to your pitch?

“Our PR drive was probably the most effective way of engaging with the crowd as it snowballed organically and drove lots of potential investors to our campaign page.”

Matt: We promoted the raise on all our social media platforms, posting regular updates about the campaign but also about key successes within the business generally.

Whilst we were live we signed several distribution deals including one in the US. We also won several design and consumer awards. These successes were very timely and we certainly found it encouraged investment during the campaign.

We were also lucky to be featured on ITV’s ‘This Morning’ and that generated additional press interest. This PR drive was probably the most effective way of engaging with the crowd as it snowballed organically and drove lots of potential investors to our campaign page.

Hatty: What advice, tips or successful tactics would you offer to anyone preparing for crowdfunding?

“Start planning 3 or 4 months prior to the launch of a campaign. That may seem like a long lead time but preparation is key!”

Matt: This gives you time to identify all the potential investors in your various networks and start conversations with them.

Another tip is to get feedback on all your campaign materials – video, deck and pitch page before finalising them. This is something we did repeatedly with both the Crowdcube team but also via feedback from experienced investors within our personal networks.

Hatty: Many founders who successfully crowdfund tell me it is very time-consuming. What do you recommend for maintaining your motivation and commitment when crowdfunding?

Matt: It’s certainly challenging running a crowdfunding campaign whilst also maintaining the day to day running of the business! Our days were long and we often found ourselves emailing responses to potential investors late into the night.

“There were times when the investments were slower to arrive than we would have liked and it was really useful having a plan to promote the campaign using different channels to increase engagement on these quieter days.”

Hatty: Have there been any surprising outcomes from your successful crowdfunding?

Matt: Yes! Crowdfunding has certainly raised the profile of our business, not just in the UK but overseas too. We are following up some leads from potential international distributors who became aware of Rockit through the Crowdcube campaign. We have also had some investors offer expertise and advice on a voluntary basis as we move forward. All in all it’s been a very rewarding experience.

Read more interviews with Founders

**** Free, live and interactive webinar “How to succeed at crowdfunding” packed full of practical crowdfunding advice, insider tips and resources that support your crowdfunding campaign. RESERVE YOUR FREE PLACE ****

Crowdfunding is booming – but it’s changing too

Back in 2016 there was a slight dip in the number of crowdfunding deals causing speculation as to whether crowdfunding was plateauing as a route to investment. However, according to recent research from Beauhurst, the sector has “bounced back” in 2017 – particularly in the final quarter of 2017.

Source: Beauhurst “The Deal”, Feb 2018

Looking at the investment sector as a whole, in terms of the number of deals done, crowdfunding remains a strong source of funding in UK. Indeed, crowdfunding offers one of the strongest routes to funding, second only to Venture Capital/Private Equity funding based on the number of deals funded. Crowdfunding accounts for more completed funding rounds than those funded by business angels, although business angel investment remains stable. It seems crowdfunding is here to stay and, as Beauhurst point out, “diversity of investment sources means startups have a better chance of finding a partner that suits their needs.”

Crowdfunding is raising larger investment rounds than before

Source: Beauhurst “The Deal”, Feb 2018

Crowdfunding is moving its focus onto larger deals and the number of crowdfunding deals under £499,000 is beginning to decline. This is in contract to angel investment which remains relatively stable at both a higher and lower level.

Source: Beauhurst “The Deal”, Feb 2018

Different crowdfunding platforms are adopting different approaches

As the equity crowdfunding market matures distinctions are becoming clearer in terms of approach. Crowdcube and Seedrs are working to a volume model and encourage a broad mix of investors. Syndicate Room and Venture Founders, on the other hand, seem focused on doing few deals but with a higher average amount invested. Both Syndicate Room and Venture Founders attract a particular type of investor – mainly High Net Worth (HNW)or sophisticated investor who, arguably, have the ability to invest more.

Source: Beauhurst “The Deal”, Feb 2018

New players entering the market

This month (March 2018), OurCrowd, a global equity crowdfunding platform have announced they are opening an office in the UK. Their approach is similar to that of Syndicate Room and Venture Founders and focuses on attracting HNW and sophisticated investors.

What are the implications for startups, business owners and founders?

Crowdfunding remains a strong route to funding but it does take hard work and a lot of preparation behind the scenes to run a successful crowdfunding campaign. As the crowdfunding platforms focus their efforts on larger deals, businesses looking to raise relatively small amounts of seed investment (less than £250,000) may find they receive less help and support on a one-to-one basis from their chosen crowdfunding platform. Businesses are advised to look to alternative, independent programmes and advisors to gain this support instead. There are a number of such programmes. Good ones include Crowdfunding Accelerator, TribeFirst and IdeaSquares.

Angel investment remains an important plank in any seed investment round – for two reasons. Angels are still actively investing in smaller rounds, as the Beauhurst data shows, but also a lead angel investor can provide access to crowdfunding platforms like Syndicate Room who won’t accept any business unless they have secured a lead investor.

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How to succeed at crowdfunding: Free webinar
This free 60 minute, live and interactive webinar reveals everything you need to know to succeed at crowdfunding from how to choose the right platform, what to put in your crowdfunding pitch and the thing that no one tells you but which really makes the difference between success and failure.
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Changes to SEIS Advanced Assurance Scheme

In January HMRC announced changes to the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) and will no longer provide advanced assurance that a company qualifies for either scheme on a speculative basis. It is now necessary for any company applying for advance assurance to name at least one investor or fund manager who wants to make an investment.

This has created a chicken and egg situation. SEIS funds, crowdfunding platforms and business angels like to know whether a company has advanced assurance from either or both of these government-backed schemes before they will commit to an investment and yet founders and business owners are unable to seek advanced assurance unless they have an interested investor.

There is no doubt that having advance assurance for SEIS or EIS is an important stepping stone in the process of attracting investment, so what is a founder or business owner supposed to do?

Having spoken to a number of funds and crowdfunding platforms, it seems the advice for now is to provide a named individual when you apply for advance assurance but – as there is no requirement for that specific individual to complete their investment – you can provide the name of anyone considering investment provided you have their permission.  They do not actually have to complete the investment – but they pave the way for others to do so.

Read HMRC’s full advice on SEIS and EIS

When is the right time to raise investment for your startup?

This might seem an odd question. You go for investment when you need money, right? Wrong! Not only does it take time to raise investment – so you want to start raising investment at least 6 months before you need the money – but there are stages in every business’ life-cycle when it will be easier to raise external investment. Going for investment just because you need the money could mean you’ll waste time and energy. Worse still, the distraction of raising investment may mean your business suffers – making it harder still to raise investment. So, when is the right time to raise investment for your startup?

Hatty Fawcett, Founder of Focused For Business, interviewed two founders who have successfully raised investment in the last year and asked them whether there is a “right” time to raise investment.

Adam Beveridge, Co-founder of Hollabox, started his startup in 2016 and raised investment the same year and went on to raise a second seed round a year later. Hollabox is a social media that makes it easy to see inside the best venues, restaurants and places in real time so you can decide where to go for a great night out.

Sue Frost, Founder and CEO of Curamicus started her startup in 2015 with founder investment and a startup loan. She went on to raise seed investment in 2017. Curamicus provides wearable assistive technology for elders and vulnerable people that detects and reduces the risks of falls.

Hatty: Let’s start with the big question, is there a “right time” for a startup to raise investment?

Adam: This is a tough question to answer, as each business case is subjective and each investor has their own investment criteria. From my experience, I would say the most sought after criteria investors want is revenue from a proven business model.

“The earlier a start-up can prove it will make money, the more this de-risks the investment for the investor.”

The next “expected” criteria, would be a dedicated, full time founding team and a strong vision. A team breaths confidence, a strong vision helps form a path that people want to join you on. It’s a minimum starting point for any venture, I would say.

Sue: I think from a startup point of view it’s best to raise investment when you have a developed true business concept to the point that you’re able to prepare a detailed business plan. Preparing a business plan takes you through the process of self-examination as to the viability of the business for yourself and also clarifies what you’re offering in return for investment.

Hatty: Do you think a startup can go for investment too soon – or leave it too late?

Adam: A start-up can certainly try and raise too early.

“Raising money is so time consuming, to the point that founders can often neglect the core operations of their startup.”

Because of this, you want to make sure when you’ve finally got in front of the right people, and it will take a lot of intros and knocking on doors to get there, you have the right things to say. Otherwise you’ll get a “no” and realise you’ve wasted months of your precious runway.

To avoid wasting time, build credibility with an industry relevant advisory board, make powerful connections and partnerships, (with brands, accelerators and entrepreneurs) and focus on proving your market and concept as cheaply and efficiently as possible before you go for investment. But be wary of leaving it too late or investors may question your startup’s speed to market and scalability.

“The sweet spot is when you think you gathered enough data and evidence on a small scale, to prove there’s potential and a bigger picture.”

Sue: There are different stages to business investment applicable as a business grows.

“Recognise the right stage or type of investment applicable to your business when planning to approach investors.”

Hatty: Thinking about all the times you have raised investment, have you ever found it easier or more difficult to raise investment and what do you attribute that to?

Sue:
“To secure a first investment is challenging. However, once we secured the first investor it made it easier for subsequent investors to consider us.”

From the subsequent investors viewpoint, we had already been through the due diligence process with the first investor and this provided some level of confidence to subsequent investors.

Adam: It’s a lot easier when you already have capital committed, and brands or credible investors on board. Investors take notice of what you’re doing. It was much easier for us to raise when Just Eat invested in Hollabox – it’s a name everyone knows.

“The earlier you try and raise in your businesses life-cycle, the more you risk showing naivety, inexperience and have less proof of concept.”

We tried to raise 3-4 months into the start of our journey. It was too soon. Twelve months later, we had developed, learnt best practices and understood the investor landscape. Our pitches were better, we had a more mature product and a better understanding of our users. That, and a clear road map, meant we successfully raised.

Hatty: As you prepared to raise investment, what were you excited about and what concerns did you have?

Sue: I was excited about the prospect of being able to realise our business dream and bring our product to market so that we could make a difference in people’s lives.

I was concerned at the length of time the financing took as we had to deal with two organisations (three if you include the grant we took) and individual angels. However, I understood the need for due diligence on both sides of each transaction.

“Bringing in third party investors is a big step for any startup. We had to be sure we had the right fit for us as a team”

I needn’t have worried. We’re very happy with the group of seed investors we are working with now. Collectively and individually they are all very willing to help us with our business goals without becoming too involved in the business which is a good balance.

Adam: I was excited about meeting successful entrepreneurs and people who had a vast knowledge of start-ups and business. People who could open doors and give advice. Getting their time was precious, even if it didn’t lead to investment. I found people are willing to help and offer advice, even if they don’t invest.

I was understandably concerned about getting rejected by investors. We received many “nos”. It’s very common for startups on an investment journey but, naturally, the first few always hurt.

“The key with rejections is to quickly use each as a learning curve. Accept that raising capital takes time and keep working smartly to get in front of the right people.”

There’s a book I’d recommend – “Rejection Proof” by Jia Jiang. It helped me develop my investment armour and mindset.

Hatty: Did you have a “lead investor”? Did that make the process of raising investment any harder or easier?

Sue: We did have a lead investor and it was very helpful in the seed round as this provided additional confidence to other investors.

Adam: At first, no we didn’t. We secured a place on a couple of accelerators, including Just Eat. Through this we found a lead investor, the founder and CEO of Tossed.

“The support and connections received from our lead investor where amazing, but also, mentioning the lead investor to other stakeholders and investors, opened doors and made raising from other investors easier.”

Securing a lead investor meant we had terms sheets in place, a committed valuation and share price and a high percentage of investment target committed. That certainly makes raising investment easier.

Hatty: What practical advice or tips would you offer to anyone preparing their business for investment?

Sue: Have a clear idea of how you’re going to make money and what the projected return on investment will be for the investor.

“As an entrepreneur when you have a business idea it becomes very personal to you. Sometimes it’s easy to forget you’re in business to make money.”

Investors are somewhat comforted to see your passion and vision but you also need to know where you want the business to be in 3 – 5 years’ time.

Adam: I would say introductions are key. Investors get hundreds of investment opportunities a week. The way to make sure your start-up stands out is to be introduced by someone the investor trusts. To make sure this happens, build out your network. Become part of networks, accelerators, communities and attend meet-ups. Use your network to ask for introductions.

Don’t just go straight in for “the ask” either. Warm up your contacts with regular progress updates, offer help where you can and show an interest in their own ventures or activity. Reaching out cold is harder and comes across selfish. Help your community, and, when the time is right, it will help and reward you.

Hatty: Do you have any advice or tips on how to maintain your energy, motivation and commitment when raising investment?

Adam: Believe in what you’re doing. You started your start-up because you saw an opportunity and you’re one of the few people that got up and decided to do something about it. Believe that others will see that opportunity too and want to help you. It is draining emotionally and time wise, and the sucker punch is that it doesn’t always have a happy ending.

Sue: In my experience to raise investment requires a lot of energy and it can be exhausting physically. If you’re into exercise then obviously this will help with the stress.

“Keep in mind that this is a phase to your business that is necessary to achieve your longer term goals but it is a temporary period which when achieved will enable you to succeed.”

I’ve met some great people along the way who have encouraged me when I needed it the most for which I’m most thankful.

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Three questions to answer to ensure your business is ready for investment

So you want to raise investment? Rather than leaping straight into action writing a pitch or talking to investors, take a moment and ask yourself three questions.

How much money do you need?
What will you do with the money you raise?
How will your business change and grow as a result?

If you can answer these questions properly – not just in an off the cuff manner – but by providing real detail, facts and figures, then you probably are ready to raise investment.

But the devil is in the detail.

Investors don’t back ideas, hunches or broad-brush thinking. They want proven products (or services), thoughtful plans and evidence to support your approach. These things aren’t just conjured up by brainstorming, desk research and theoretical plans. They are created through action, hard work, persistence and a lot of iteration.

I touted my theoretical business plan around VCs and angels before the penny dropped that I needed to get the business going before anyone would back me.

I learnt that the hard way. I touted my theoretical business plan around VCs and angels before the penny dropped that I needed to get the business going before anyone would back me. The next time I tried to raise investment, (just six months later – but six incredibly busy months) I had not just a web platform but paying customers and a detailed marketing strategy. I raised £150K in one week – from pitching to money in the bank.

The proof was in the pudding. Investors call this “traction” and it speaks lounder than words.

Traction speaks louder than words

Be honest, ask yourself what stage your business is at:

If you have a business idea but nothing tangible yet, don’t waste your time talking to investors. Instead invest your time into creating your product/service/app. It doesn’t need to have all the bells and whistles but it needs to deliver the essence of what customers are looking for. This is often called an MVP or minimum viable product. It allows customers to trial your product, give feedback and for you to understand what needs to change to meet your customers’ needs better.

You don’t have to spend a fortune to develop an MVP. In fact, it’s better if you don’t

How do you fund this? Invest your own money (if you can), talk to family and friends to see if they will lend/invest money or explore a start up loan (but be aware that you will probably have to start making repayments immediately so be sure you can generate revenue quickly or negotiate a repayment free period). You don’t have to spend a fortune to develop an MVP. In fact, it’s better if you don’t – the chances are your MVP will change when you get customer feedback.

If you have got an MVP, focus on getting your first customers – whether they are paying you or not. Being able to demonstrate you can attract paying customers is best, but honest – hopefully positive – feedback can be just as valuable. Work on really understanding your customers – who they are, why they like the product and how you could find and sell to similar customers. This information is gold dust for your marketing strategy. Tried and tested marketing strategies do attract investment.

Work on really understanding your customers…Tried and tested marketing strategies do attract investment.

And then? Well, it’s back to the three questions we started with. To gain investment, you will need to explain in detail how much money you need, what you will do with it and how that will grow your business.

Growth is the key here. Investors don’t want you to stand still. They want you to create value by finding better ways to work, developing new products, attracting more customers. Investment isn’t philanthropy. Investors want a financial gain and that is created when the business grows – fast.

Investment isn’t philanthropy. Investors want a financial gain and that is created when the business grows – fast.

If you’d like to speed up the process of getting investment, it’s worth talking to a professional. Someone who understands the process, someone who has “been there, done that”. Investors are looking for specific information when deciding whether to invest and it pays to get the inside track on what you’ll need to provide – as well as having someone to help you prepare, to challenge you and give practical advice on how to improve your pitch.

If your business is ready for investment, sign up to Fast Track to Funding – designed to save you time and make it quicker to attract investment.

If you’re not sure if your business is ready to raise investment and you want to learn more about your funding options, reserve a free place on the live and interactive webinar “Everything you need to know to raise funding – quickly”

How to succeed at crowdfunding: Free, live and interactive webinar

A free 60 minute, live and interactive webinar presented by experienced crowdfunder Hatty Fawcett, Founder of Focused For Business.

You will discover:

  • How to select your crowdfunding platform to attract the right investors.
  • The 7 essential elements of a successful investment pitch.
  • The secret of crowdfunding (that no one tells you) which is key to success.
  • How to set your crowdfunding target to ensure success – not failure.
  • The inside track on how to off-set risk to attract serious investors.

Places are limited to ensure a good interactive experience.  Please book early to avoid disappointment – scroll down to book.

As the webinar is online, there is no travel time, simply log from your computer wherever you are – all you need is an internet connection and a webcam. A login link will be emailed prior to the webinar.

There is no need to bring anything but please come ready to participate fully. Hatty will share specially prepared content, answer your questions about crowdfunding and give you the opportunity to learn more about the eight week online programme, Crowdfunding Accelerator.

BOOK YOUR PLACE NOW
Click on the “Select a date” link below to see all available dates and times for this webinar and to reserve your free place:

(If your browser does not display the booking form, click here to be re-directed to an Eventbrite booking form).

What people say about this webinar

“A very informative seminar that gave me a much clearer understanding of the different types of crowd funding available and which of these might be most suitable for my business”

“Hatty is a fountain of wisdom when it comes to crowdfunding.”

“Hatty is a great teacher! The rich content of the course kept me interested and helped me understand how crowdfunding fits into various financial offerings.”

“I found your webinar to be extremely helpful and would rate it 10/10”

“It was useful to interact with the others and it’s reassuring to hear your stories of fundraising.”

“I found the webinar useful and, as always, your tone and enthusiasm are very motivating. You would be a great person to work with because of your know-how.”

About Hatty

Hatty Fawcett raised £250,000 through crowdfunding and angel investment for her own business venture. She learnt the hard way what it takes to raise investment and now speeds up the process of getting investment for startups and early-stage businesses. Hatty runs Crowdfunding Accelerator an eight week programme designed to make it quicker and easier for businesses to prepare for crowdfunding. She regularly speaks on crowdfunding and is an active blogger on the subject of raising investment. Hatty is also a Regional Manager for Angels Den and is a Talent Spotter for The Start-up Funding Club.

What people say about Crowdfunding Accelerator

“Hatty is a great teacher! The rich content of the course kept me interested and helped me understand how crowdfunding fits into various financial offerings. This course has given me confidence on how and when to organise a campaign.” Sue Frost, Co-founder Curamicus

The Crowdfunding Accelerator was an excellent way to explore the concept of crowdfunding in a real hands-on and practical way which resulted in having everything I needed to proceed.” Claire Timbrell, Co-founder The MacGuffin Project

“Hatty was a fantastic coach helping us create a short pitch, ensuring the delivery of key investor information in a simple but effective way” Gill Hayward, Co-Founder, YUU World

“Hatty made the daunting process of accelerating my business a simple, outlined and structured process. As a company we have gained direction, professionalism and valuable information through her insights”. Arun Thangavel, Co-Founder, Hollabox

How do you value a startup – in the real world?

The internet is littered with stories of astounding startup valuations, achieved within just a few years of a company’s birth. I think my favourite in recent months is the aptly named Improbable, a UK tech simulation company, which raised $502 million (£390 million) in a funding round in May 2017 at a valuation of over $1 billion, making Improbable a unicorn (a business valued at $1 billion or more). The company was just 5 years old.

Are such valuations the stuff of dreams, make-believe and fairy stories? (Surely that choice of the name “unicorn” isn’t used without irony!) How do you value a startup in the real world?

“A startup needs money. It makes the dream come true.”

Now, don’t get me wrong. I expect a founder to be bullish and full of optimism for their business. No one is going to invest in a business you’re not excited about. The issue here is that investment for early stage businesses is vital. It is literally the lifeblood. It is what enables you to build your prototype, test routes to market, build market understanding and provide the funds for growth. A startup needs money. It makes the dream come true.

“A “deluded valuation” can close doors before you’ve even had a chance to say ‘Hello'”

But, a “deluded valuation” can close doors before you’ve even had a chance to say “Hello, I’m Rumpelstiltskin”. Why would you close doors before you’ve even started a conversation?

Established businesses have it easy. When you’ve got predictable revenues there are numerous ways to assess and measure business value. (If you ever find yourself having trouble sleeping, take a look at this Wikipedia article listing ways to value a business. Startups and early-stage businesses are anything but predictable – they may not even have revenue. In such circumstances, the only business valuation that matters is when two parties agree to buy and sell.

“The only business valuation that matters is when two parties agree to buy and sell.”

But how do you get to that point? Where do you start? How do you evidence your valuation? How do you negotiate to reach agreement?

Startup valuation is a negotiation – but not one that exists in the founder’s head. One that is grounded in fact, displays careful planning and contains a dose of realism.

There is nothing more likely to cause a potential investor to walk away than a business valuation justified in the following was:

“I’ve looked on crowdfunding sites and another company that’s not as good as ours is valued at more”

“That’s how it’s done “in the Valley””

Instead, real world valuation starts with:

  • Facts – that demonstrate what you have achieved in the business and that there really is a market that is willing to buy what you offer
  • Financial forecasting – not “finger in the air” stuff, but grounded spreadsheets that demonstrate a founder’s understanding of market drivers, costs and diversified revenue streams
  • Strong team – the right people with the skills and experience to make the financial forecast a reality
  • Credible exit – which demonstrates not just an attractive return for investors on paper, but a believable route to selling shares so that the return can be realised.

Then, it’s a conversation between grown-ups – exploring assumptions, plans and options. The length of that conversation being tempered by the speed at which the business needs the investment!

By Hatty Fawcett, Focused For Business

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If you want to learn more about practical business valuation for startups, sign up for the live and interactive online masterclass “How to create a business valuation that gets your startup funded.”

You might also like “How to value your startup: A brief, practical guide.”

“Speaking the language of investors made it quicker to find investment” says Jason Kirk of Kirk & Kirk

Jason Kirk co-founder of Kirk and Kirk, an upmarket eye-wear brand, is a very credible founder and business owner. He and his business partner Karen built and sold a successful business prior to starting Kirk and Kirk, they both have over 20 years’ experience in their industry, their latest business has made good progress and they have raised investment before (for their first business). You might think that they would find it a breeze to raise investment. And yet, when they were looking to raise investment for Kirk and Kirk they sought external support and advice. Hatty Fawcett of Focused For Business caught up with Jason to find out why.


Hatty: You decided to raise investment from business angels rather than any other source, why was that?

Jason: We didn’t need a huge amount of money, about £150,000. We were eligible for SEIS (Seed Entreprise Investment Scheme) which I knew would make us appealing to angel investors so it felt like a logical place to start. I was also interested to see what sort of angel we might attract and whether they might bring additional value to the business in the form of contacts or skills, as well as their money.

I’d also decided against going to the banks because they tend to be slow and expensive. The amount of work involved measured against the amount of support you end up with from the banks is, at best, frustrating.

Hatty: You had raised investment before, for your previous business, so people might assume you knew what was required. Why did you decide to get external support in preparing for investment?

“I really want to ensure I was speaking investors’ language. I know how time consuming raising investment can be. I wanted to get it right first time and avoid going backwards and forwards with investors and spending too much time on it.”

Jason: Yes. I’d raised investment before but this was a different business. Enlisting the help of someone who knows how to tailor a document to the needs of a specific audience is very time efficient and should lead to better results. I really want to ensure I was speaking investors’ language. I know how time consuming raising investment can be. I wanted to get it right first time and avoid going backwards and forwards with investors and spending too much time on it. Raising investment can be a big distraction from the day-to-day running of your business if you’re not careful!

Hatty: You’re right. Raising investment is a full-time job – on top of the full-time job of running your business! Raising investment gets an awful lot easier when you have a lead investor, someone willing to back your business and say why they are doing so. How did you go about finding a lead investor?

Jason: I didn’t have a huge network of investors so I admit it was daunting knowing where to start! But having worked on what I need to say to investors with you, it gave me confidence to go out and start talking to people. I remember you encouraged me to talk to everyone! Telling them about the business, what we had achieved and what we wanted to do next. I spoke to so many people I began to get board of the sound of my own voice!

“It’s definitely easier to attract other investors once you have a lead investor.”

But it paid off, one of the people I spoke to – looking for their feedback, I wasn’t actually asking for investment – was an active angel investor and he liked what we were doing. He agreed to be our lead investor. It’s definitely easier to attract other investors once you have a lead investor.

Hatty: That’s very true. A lead investor really gets things moving. I know it worked for you and, with the support of your lead investor, you were able to complete the investment round. Thinking back on the process of raising investment, what advice would you offer to anyone preparing for investment today?

Jason: I’d use an experienced pro to help you prepare the documents and figures you need because it saves a great deal of time and makes your investment look more attractive to potential investors.

Hatty: Have there been any surprising outcomes from raising investment?

Jason: The investment has allowed us to make significant progress in a relatively short time frame. In fact, we’ve achieved the milestones we set and are ready for our next round of investment!

Jason worked with Hatty Fawcett of Focused For Business to prepare for investment, with the specific objective of developing a strong summary of the investment opportunity (in the form of a one page executive summary) and a credible business valuation.

If you would like help preparing for investment, book a free funding clinic with Hatty Fawcett or attend a live and interactive, online masterclass that gives you the tools to prepare yourself for investment.

Giving you the tools to raise investment: Online masterclasses for start-ups, founders and early stage businesses

This online masterclasses series is designed to give startups the tools and information they need to prepare for investment in a focused, actionable way:

How to write an executive summary that attracts investors
Learn to create an executive summary for business angels or crowdfunding investors that really sells your investment opportunity.
Find out more and book a place

How to create a business valuation that gets your start-up funded
“Real world” business valuation for start-ups and early stage businesses looking to raise angels investment or crowdfunding.
Find out more and book a place

How to find investors and move them from “Doubters” to “Shareholders”
How to find, warm up and close deals with business angels and crowdfunding investors.
Details coming soon

How to pitch your start-up to raise investment
Develop the range of different pitches you will need when raising angel investment or crowdfunding.
Details coming soon

 

 

How to create a business valuation that gets your start-up funded

Business valuation...the most common deal breaker

A down to earth, step-by-step approach to creating a business valuation for start-ups and early-stage businesses looking to raise angel investment or crowdfunding.

You will:

  • Learn what a business valuation is and how it changes over time
  • Become familiar with the terminology used to express a business valuation
  • Discover the evidence you will need to justify your business valuation
  • Understand what investors look for when assessing value in a business
  • Undertake a practical exercise to identify the drivers of revenue in your business
  • See a worked example of a financial forecast
  • Receive a valuation calculator

Places are limited to ensure a good interactive experience.  Please book early to avoid disappointment.

Duration: 1 hour 45 mins
Location: online using Zoom video conferencing
Presented by: Hatty Fawcett, Focused For Business

Book your place on the next masterclass

If you can’t see the booking form, book your place via Eventbrite

About Hatty

Hatty Fawcett is the founder of Focused For Business  She raised two rounds of investment for her own business venture and now supports others in raising investment, predominately through business angels and crowdfunding. She runs a series of online masterclasses and Crowdfunding Accelerator, an eight week online programme of workshops and mentoring that makes it quicker and easier to succeed at crowdfunding. Hatty also offers free Funding Clinics to founders and business owners raising investment. Hatty regularly speaks on the topic of raising investment and is an active blogger on the subject.

What people say about working with Hatty

“Hatty is a great teacher! The rich content of the course kept me interested and helped me. This course has given me confidence.” Sue Frost, Co-founder Curamicus

“The webinars from Hatty are great but the best bit is the interaction with the other participants and hearing how they are approaching their journey to investment.” David Toscano, Cin Cin Italian Canteen

“Hatty was a fantastic coach helping us create a short pitch, ensuring the delivery of key investor information in a simple but effective way” Gill Hayward, Co-Founder, YUU World

Hatty’s content was excellent and I learnt far more than I had imagined. We had a good laugh whilst getting some serious work done.” Sharon Maddy-Patel, Maddy Lou Shoes

“Hatty made the daunting process of accelerating my business a simple, outlined and structured process. As a company we have gained direction, professionalism and valuable information through her insights.” Arun Thangavel, Co-Founder, Hollabox

You can read more about Hatty on her LinkedIn profile.

Book your place on the next masterclass