What Investors and Partners look for before Investing

A full snapshot of your intellectual assets and a considered and strategic plan for deriving value can help attract investors. What do they look for?

The General Picture

• The broad category (e.g. ICT/ Manufacturing/ Life Sciences) of your business.

• A description of your business in one sentence.

The Product/Service

• A complete description of your business and the product or service being developed.

• The value proposition describing the gap/ problem in the market that your innovation will solve, and why customers will purchase.

• Information on any sales of the product/service.

Market Information and Access

• The market that you will be targeting and why.

• The need in the market and how the new product/service will address the need.

• The current size of the target market. How much of the market can you expect to capture.

Note that where a new market is being created, solid information might be difficult to obtain.

• Where the market is located, and how can it be accessed. For example, is a partner needed who currently has the infrastructure in place to provide the access, or can your company do this alone?

• Who is currently in the market? Whether they are direct competitors and if so, what advantages your new innovation offers over your competitors’ offering.

• Information on indirect competitors and current products/services satisfying the needs of the market. For example, prior to video being available, cinemas fulfilled the needs of the market. Introduction of home video systems created a new market that had been previously satisfied. The market needed to be convinced of the benefits of buying a new entertainment system.

• Who future competitors are, where they are likely to come from and when they would be expected to enter the market.

• The barriers to new products/services entering the market.

Competitive Advantages

• Information on the intellectual property owned by your company and how it is protected. This includes patents, trademarks, know-how, trade secrets, designs, and methods.

• The sustainable competitive advantage the company has, and how you will maintain this when competitors enter the market to address the same problem.

• Your company’s core strengths and weaknesses.

Management and R&D Teams

• Brief bios with core competencies. Business Model – How the Business will make money

• A financial forecast over 3-5 years showing projected revenues, gross margins, total expenses, EBIT.

• When you would expect the business to break even.

Financing your Company

• The ownership structure of your business. Name/equity holders(s)/% ownership/cash injected.

• How much money you are seeking. The percentage of the company investors will own.

• What the money will be used for. Include materials, equipment, people, time, dollars, and additional technology, new office locations needed to develop and market the technology / service.

This information forms part of the operational plan within the Business Plan. Each major activity should be costed and briefly explained. A 12 month cash flow forecast should also be included.

• The risks faced by the company that could prevent it achieving its goals, and how these will be managed.

• The company’s current cash balance. If relevant, the company valuation at the last funding round.

• The expected monthly “burn rate” over the next 12 months.

• Who has been approached for funding (including granting bodies).

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GBSH Consult is a global management consulting firm proven in dealing with mergers and acquisitions. GBSH Consult supports clients in making their deals successful as well providing analysis, trends and recent M&A middle market transactions, deals and private equity investment. For more information go to www.gbshconsult.com