Raising Investment In A Challenging Environment

March 19th, 2020 Posted by Uncategorized 0 thoughts on “Raising Investment In A Challenging Environment”

There’s no doubt that business owners are, understandably, freaking out. It’s hard enough to raise money in a healthy economy, let alone when the stock markets are tanking globally. Raising investment in 2020 is going to be all about survival of the fittest. Not just surviving and thriving, but being able to communicate how well you’re doing that to potential investors as well.

Many startups are being advised to slow down or stop hiring, slash spending, work from home, cut out travel — and prepare for tough times ahead. Yet that’s little comfort to founders mid-fundraise — or with a short runway of cash — who are now wondering if, not when, they’ll be able to close their next rounds.

Regardless of how serious COVID-19 gets, the hit to the markets and the economy is already looking severe — and likely to last for some time. This is going to make fundraising hard for all startups.

Here are a few of our suggestions:

WFH to reduce costs: Many companies are able to reduce cash burn forecasts due to lower travel costs. You should consider ending your rental contracts at shared/flexible offices given that everyone is working from home.

Close the deal: If you are fundraising right now, do everything you can to complete that fundraising as quickly as possible.

Keep your milestones current: Make sure you have a clear sense of what milestones you think you need to hit in order to raise your next round — and think about how those milestones might change if your revenue plan is delayed.

Plan ahead and report: Start planning your fundraising a bit earlier than you might otherwise have planned. If you haven’t already implemented a steady measure of monthly reporting to your existing investors, now would be a good time to develop that discipline. You may need their support and the better you are communicating — the better.

We have a FREE Investment Ready webinar on the 23rd of March to help you with your investment readiness process. If you think your business would grow faster with a capital injection of £250k – £10m, we can help you be ‘Pitch Perfect’ and introduce you to potential investors in just 8 weeks.

You can still make progress in your business even if you’re working from home. To find out how you can attend, click here. 

If there’s anything you would like to discuss with our experienced team around the current uncertainty, please get in touch with us.

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