Growing

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Your company has received seed and/or first round funding and now you need more to take your company to the next level.

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Investors need detailed answers to:

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• What do you have?

• What do you need?

• What do I get?

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What Do You Have?

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You've used prior funding to bring your company to where it is today and now you need a plan to move forward. When you started your company, whatever the value was that justified your seed funding, it was most likely based more on a potential future value than existing value.   Now your company has existing value. Your new plan needs to demonstrate how you will grow your existing value into a value that will attract additional funding.

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Correctly assessing your existing value and defining a defensible future value will determine the success or failure of your offering to raise additional funding.   Financial statements alone, as important as they are, will not be enough.

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What do you need?

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Your Financial Plan (Pro Forma) will determine the amount of funding you need to meet your goals. Your most important goal, bar none, will be maximizing the value of your company. The ability to raise additional funds is directly related to your use of those funds.

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Balancing the trade-offs between your use of funds and the value your create is critical. If created value is too low, the investor's financial return will be too low. If expenditures are too low, the risk of realizing your projected value may be too high. Balancing financial performance with created value ensures investor risks are minimized and their return is maximized. Equally important, your offer to investors will be fairly priced for your existing investors as well as your new investors.

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What do I get?

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Answering the first two questions satisfactorily will establish credibility. The answer to this third question will determine the investor's willingness to participate in your offering.  What your offering promises to return will be weighed against the investment requested. The investor's perceived difference will be the investor's perceived risk.

 

Your goal is to minimize the investor's risk - the risk in his mind, not yours. The more credible your plan is and the higher the valuation, the lower the investor's perceived risk will be. A well balanced plan will minimize the risk to invest.

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