I love helping founders, teams and businesses thrive – even in the face of adversity. Digging, delving, identifying potential and opportunity, guiding ambition, challenging the status quo, encouraging ‘step back and look at this differently’ and seeing sales roll in [amongst other things!].
A perpetual question, of course, is around raising investment. For women, this can be a particularly arduous task with less than 2% of investments going to female-led businesses, globally. This number will, eventually and slowly, improve thanks to the heroic efforts of a few inspirational women this year to build new funds. [Update November 2024 – £250m has been secured by the Invest in Women Taskforce and this fund is currently open – closing date 23 December 2024].
However, moaning, constantly and openly about how difficult it is, as a woman, to raise equity investment just isn’t the way forward. I can feel myself recoiling, physically, when I hear even the edge of this conversation, again.
I raised equity funding for SnapDragon, nearly £4m, long before 2% was a general topic of conversation. Perhaps I was ‘just’ lucky? Perhaps I was in the right place at the right time? But I prefer to think, and I trust our investors would agree, that a great business, proven potential – ideally sales, the right team, an MVP, product market fit and a TAM worth going after, get you in front of investment committees.
It certainly was not an easy process. Several seed rounds, with ‘tranched’ milestones and eyewatering legal fees [beware!] but for SnapDragon it was what we needed to grow. As a sole, non-technical, female founder building a tech business I needed the funding to build the team, to build the tech. I couldn’t code, and didn’t have a spare few million myself, so there was simply no choice.
But, you might not need to raise investment. Many businesses don’t. If you’re not building something expensive, or not having to manufacture and generate stock, and can sell time to generate cash, then you may never need it. Shorter term finance options may well be better for you, such as a loan, an overdraft or invoice finance. Raising equity investment is not a badge of honour – it’s a necessity for some of us – particularly when building complex technology – but it’s certainly not for all.
The very, VERY best thing you can do to prove the viability of your business is to generate sales. I cannot emphasise this enough. Sales prove someone will pay for your product. Sales made [to someone who isn’t a family member or friend (!)] corroborate your ambition that your product/service delivers value. Sales to different types of customer, whether you use personas or industries, generate further endorsement of future potential.
If you do think investment is what you need, do your research carefully.
Find relevant investors who invest in your space and whose portfolios you can interrogate to see what they are really like to work with.
Finely tune your pitch to each group so your relevance and potential are quickly understood.
Never underestimate the importance of sense-checking your presentation. While you know your business inside-out, anacronyms and assumptions can lose busy people in minutes.
My gut feeling about choosing the right investor/s is based on how I have felt at 2am when rejigging, re-analysing or reforecasting for [what had seemed like superfluous] additional analysis. [And believe me, raising investment during Covid meant a lot of this!]. If working away, or the thought of having to continue working away at 2am, made me cross, I stopped.
If I was 2am ‘happy’ to deliver what had been asked for, I continued … and the rest is history.
I recently heard the founder of BrewDog [who has seafaring experience] give his own analogy of this, imagining being on the high seas, on a trawler, with the persons in question and making it through the night – was a win. If lifeboats were to be deployed, it was not.
