Get Noticed and Get Funded

Get Funded and On Better Terms With  Customized Risk Guarantee Coverages

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Finance | 5 Min Read

Be Memorable To Get Funded

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You’ve developed a product or service, you have the right team in place and have sales data to prove there is a ready market. You’re ready to start -up or scale up and need capital. You decide to go after private equity or a private loan. 

You want to get funded. You want great terms based on a high valuation for your company.

​I’ve taken multiple companies from start-up through a series of private equity rounds and credit facilities all the way to exit.  In every case, there was a focal point that distinguished our pitch from every other company to get us noticed and get us funded.
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The story you tell investors must be captivating, credible and memorable to have any chance of convincing an investment committee that your company has the potential to score a multiple on their investment.
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So today I am going to share five steps that will get you noticed and get you funded on better terms and better valuation using risk guarantee insurance coverages.

HOW TO GET NOTICED
​AND GET FUNDED

The Best Way to stand out and raise capital is by offering something no one else can

It sounds obvious and simple on its face but creating an investment opportunity that no one else can offer is the surest way to get funded.  Of course, it’s easier said than done.  You must cover the basic requirements that all investors look for then add something that catches and keeps their attention.

By following the steps I’m about to share, you’re going to demonstrate your potential value to the investors and make your company a must have investment so that you have the best possible chance of hearing “yes” when you ask for the capital you need.

1.      Be Disruptive or Create a New Market

You must be able to show your company will disrupt the normal market dynamics of its industry and take advantage of an unexploited macro-economic or micro-economic weakness to achieve better margins, betters sales or other factor that will produce previously unheard of income levels for that industry.

Alternatively, your company may be able to show that it is creating an entirely new market for a revolutionary new product or service.  The result is the same.  Your company will tap a previously unknown market to generate its projected revenue.  

Do your market research and demonstrate the support for your projected market.
     
Show: Incredible revenue potential 

2.      Leadership Matters

The backgrounds and experience of your founders’ team is an essential component to a successful capital raise.  Do a thorough background check on every principal. It’s what the investor will do, and you do not want any surprises during your pitch.

A clean background check must be attached to targeted experience that supports your business plan.  Each key person must show a quantifiable contribution to the achievement of your projected revenue model. 
       
Show: Strong leadership with a track record of success

3.      The SWOT Analysis

SWOT stand for Strengths, Weaknesses, opportunities and threats.  A SWOT analysis is your guide to telling the story of your company and the opportunity it represents. Strengths and weaknesses are internal to your company.  You have control over them and can change them.  This is the story of your team, your patents and intellectual property and your management processes.

Opportunities and threats are external. This is your market analysis that shows the opportunities you can take advantage of.  It also shows the threats to your business model and how you will protect against them.  You can’t change the threats from your competitors, prices of raw materials or customer shopping trends for example. Your defense strategies to mitigate the risks is the way you show investors you’ve done your research and have analytical support for all the assumptions in your financials.

In the end, the strategy that results from your SWOT analysis should be your 1 minute elevator pitch which clearly explains what you do, how you make money and the direction you’re headed. 
       
Show: One-minute to memorably sell anyone.

 4.      Practice, Practice and More Practice

You, or your investment banker, will be sending out a 2-page slick that summarizes the investment opportunity.  Funds will use this as the initial screening device when deciding whether to invite you to meet and make your pitch.

Your pitch deck should be no more than 10 slides and no more than 20 minutes.  Never read content on the slides. The slide should frame the talking point without distracting from it. You want your audience looking at you not the slide. Remember, you will have already sent the investors your materials. 

The actual pitch meeting is a test of you as the spokesperson and your character to lead the company.  At the same time, most of the meeting will revolve around the investors’ questions probing your weaknesses, business model risks and your exit strategy.

You need to show you put in the work as a demonstration of who you are and how you intend to lead the company all the way to a successful IPO, partial or complete sale.
   
Show: You want to win - Put the time in to be prepared.

5.      Credit Enhancement

Finally, consider how to enhance the credit of your company.  Your credit rating is a factor of risk that you have control over.  You outline all your risk factors in your business model and define how you will mitigate the risks.  When taken together, the risk mitigation strategies indicate your ability to achieve your revenue projections and pay your bills.  Your revenue projections also indicate what you company valuation will be.

Ultimately, many of the risks are out of your control and investors know this.  They decide to bear the risk because the potential reward is high enough to justify the investment over the expected investment horizon.  That’s the whole point of pitching them on your company but sometimes your risk mitigation strategies are not enough to convince them to move forward.

What you need is a 3rd party balance sheet with the financial strength to guarantee your performance. It may be insurance that guarantees your revenue projections will be met in the event your buyers default. It could be intellectual property defense coverage.  Or, it could be a policy which guarantees the value of your intellectual property allowing it to be used as collateral.  

Most investors and founders do not even know it’s possible to guarantee revenue projections and even fewer have implemented such risk mitigation practices.  Investors will notice you when you explain in your investment summary that you understand the potential cashflow risks and have a solution which replaces lost revenue or covers unexpected expenses.

We’ve used Performance Guarantee Insurance a half a dozen times to enable companies to raise hundreds of millions of dollars.  It is the final piece of the investor pitch puzzle that made the companies stand out from everyone else by reducing the risk to investors making the investment.  Performance Guarantee Insurance got them a “yes.”

Show:  What no one else can provide – Reduced Risk With The Same Upside

Taken together these five steps will get you noticed and get you funded.  It takes a lot of preparation and planning by leadership before the company is ready to pitch to a private equity firm or private lender. Don’t rush it.  Take the time to diligently prepare, practice and implement every part of the pitch process and show the investors why you’re the best opportunity to achieve their investment goals.