This is where a business is selling part of it’s equity to raise finance. Normally the business is growing or becoming established and an investor needs to be taken on board to put cash in.
Equity finance is not straightforward and can be a prolonged process with no guarantees of success. The key things for a business to consider before seeking equity finance are;
- Prove the business model, show that it is capable of making profits
- Show the skills of the people within the company
- Put your own cash in first and get other investors on board who know you and trust you
- Get your pitch right. Seeking equity is not the same as normal business borrowing
- Marketing plans need to be watertight and thought through
- It is not like Dragons Den, the real world of equity finance is much different
There can be a lot of work required to take a business from a standing start to being investor ready. Lime Consultancy work with a network called BAFI who have access to over 900 active business investors, as well as family trusts, corporate funds and other cash reserves.
What To Do Before Equity Finance
Before you start to put your business out for investment then make sure you cover off these key areas;
- Have your pitch right, it is not an easy thing to achieve on your own so be open to taking advice. Your pitch is about why someone should invest in your business. It is 100% different from a business plan
- Marketing. The majority of equity finance deals are done for growth of a business. Marketing is key and a solid marketing plan is a necessity. It is worth taking marketing advice and getting some impartial input, using just your opinion on something is always a concern for investors. If you want impartial help then have a look here
- Get Investment. If you can get investment from friends, family or people who know you then an equity investor is more likely to follow. It is less likely that an investor will want to be the first one to commit
- Uniqueness. Give some thought to what makes you and your business unique. Sometimes this is not as easy as it sounds, as above please be open to third party input and comment as even the negative comments can be massively positive when it comes to securing equity finance
Why Use Lime Consultancy?
Lime Consultancy can help make sure you get your business ready and take you through the whole process, if you want more details then contact us on 01293 541333 or via the website.
Our big USP is that we can provide access to a database of investors, trusts and corporates who are looking for opportunities to invest. We also have a network of specialists that can work with you to make your pitch the best it can be.