Global Entrepreneurship Week – Getting your business investor ready

It is Global Entrepreneurship Week, and fitting that we celebrate and support entrepreneurs making great progress in our country. I think for so many salaried staff, the world of anxiety, pressure and rich experience of entrepreneurship is such a world away from the comforts of their 9-5. So, a great opportunity to dip the toes in the exciting world up entrepreneurialism.

I was fortunate to have been invited to give a talk at The Hub, a created habitat for social and innovative entrepreneurs in the Johannesburg CBD. My brief was to address the considerations of small business looking for investors to get onboard and assist them in growing.  It was a great experience to relay some of my learnings of going through the challenges of an entrepreneur, as well as being able to look at businesses from an investment angle.

The rough flow of my talk went along these lines. Please excuse the shorthand, but just wanted to give the gist of what I covered.

Look at the basic growth of a fledgling business:

  • Ideation
  • Development/Prototyping/Conception
  • Market penetration
  • Revenue
  • Growth in sales, staff, profit
  • Additional lines of revenue or release of new products

This paints a risk profile – returns should be commensurate with the associated risks

Important to know the difference between debt and equity

Also think about what you want to give away

Types of investors sitting on the risk spectrum

How to better position yourself to be invested in

  • Personal credibility
    • Being a success in everything you do
    • Get good brands behind you
    • Invest in your network
    • Invest as much as possible
    • Be SARS compliant
    • Learn about governance and company structuring
    • Get online
  • Passion and enthusiasm
    • Get to know the industry intricately
    • Show that you’re in this, 100%
  • Intellectual assets
    • Create barriers to entry
    • Patents and logos and trademarks
    • Choose partnerships
  • The intricacies of your business – from an investors point of view
    • Scalability
    • Industry trends
    • Co-investors
    • Returns expected
    • Alternative revenue streams and quality of earnings
    • Exit strategies
    • How the investor can add value. Are they the right investor?

    There are many more to add to this, so feel free to comment and add, based on your experience.

    Read more about Global Entrepreneurship Week here.

    Find out about The Hub here.

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