Guides and Advice

Getting investment-ready: 7 tips for start-ups

Published: 27th July 2021
Area: Corporate & Commercial

Tech companies have recently skyrocketed in value, and with plenty of cash looking for a suitable home, start-ups need to know how to land the best investor.

  1. Scope out interest

Reaching out to professional networks is a great first port of call for start-ups. From bankers to accountants, many existing connections will have established relationships with potential investors that could be beneficial. All it takes is an introduction and a good first impression.

  1. Take a deep dive into the sector

Knowing the sector and its trends inside and out is a great way to target the right investors. By exploring which investors are currently buying up similar companies, through speaking to successful counterparts or simply reading trade magazines, a selection of targets can be drawn up.

  1. Know what type of investor to target

There are two major types of investors: venture capital investors, who prefer more mature businesses, and business angels, who are willing to take risks and support new businesses with big ideas. There are also a range of alternative funding options such as crowdfunding, pension funds and venture capital trusts (VCTs).

  1. Remember that the business is more than just tech

Innovative tech alone is not enough to guarantee great investment. Choosing to invest in operations such as talent acquisition and IP protection, gives the business a stronger backbone, adding security for investors.

  1. Establish other sources of revenue

Having a diverse and long-term source of income can not only provide extra protection in the form of financial cushioning, but can also demonstrate to potential investors that the business is moving towards healthy growth.

  1. Prove what makes the business unique

In a saturated market it’s important to stand out. Positive publicity, including industry-focused awards and press features can cast a spotlight on the business and attract more investment.

  1. Carry out an internal review

Completing due diligence checks shows investors that the business is fully aware of the risks and opportunities that it holds. By undertaking a thorough internal review early on, start-ups can prepare themselves for any questions or requests from potential investors, keeping them on side and maximising value.

Specialist legal advice can help with this process, giving start-ups the peace of mind that they are investment ready.

Emerging tech start-ups have plenty of investment opportunities to pursue but finding and retaining the right one can be challenging. Robust preparation and future-proofed plans are essential when it comes to securing the perfect investor.

Get in touch to find out how our corporate team can help your start-up take the next steps on its business journey.

We have launched our guide to recovery and resilience, helping to support businesses and individuals unlock their potential, navigate their way out of lockdown and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.

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