July 30, 2011 at 02:06What is needed to attract investment? Or who?
I must say right away that all the information below is my personal observations and conclusions.
Having worked for some time in an investment company, I realized how unstructured this segment of the business is, how undeveloped it is. The funny thing is that the country has a huge number of ideas (especially in IT), a huge number of people (if we talk about private, sole investors) with money who are eager to invest them somewhere, but no - they cannot find each other ...
Of course, by - the situation with funds is different, funds are easier to find ... However, there are two points: first, funds (especially Russian ones) are rarely invested in startups. It's hard to talk about the reasons, there are many of them ... Many startups want to get money quickly, and when dealing with the fund, you rarely make a deal faster than in a year.
Secondly, in order to receive funding from the fund you must convince ALL decision makers.
Thirdly, funds do not invest for at least a little longer: they should have a exit strategy in a couple of years, so under a contract you usually have to buy back their share in three years. But you can’t save so much money by that time! And you just may not be interested in this.
Fourth: if you do not expect an exponential increase in turnover / profit, but you need a small amount (for example, recently I was answered a request about a promising company in need of $ 4 million, and from the IT fund, that the scale is too crayon).
And to be honest, the fund will never have close relations with you or delve into the problems of your business, but a private investor can become your dad and mom in one person, give valuable advice (these are usually very experienced people in business), yes and agree to much more favorable and convenient conditions. Although, of course, this is not always the case.
Only, as I said, finding private investors is much more difficult. And here, companies such as ours are most useful. Such companies have accumulated client bases, both private and private, they will always delve into the business to find, bring to light all the most interesting aspects and indicators of your ideas and business, will give you valuable advice, because they, like you are interested in getting you money.
In addition, such offices can attract not only investors, but also borrowed capital. For example, you attract part of it from investors, and part (after all, why give someone your share in the business), for already attracted money, take from credit organizations. And here you alone will have a hard time, because you have to be able to do business with them too ...
I work for Beford Investments, which is involved in attracting financing for investment, development projects, business development projects, including start-ups, as well as deals with transaction support, business valuation, preparation of documentation, presentations for investors, adjusts the strategy, if necessary, consulting - in general, the whole package in this area. The company works in many industry areas, including IT. Do not consider it for advertising: IT startups are of little interest to us, because we work for a percentage of the amount, and in this segment the amounts are small compared, for example, with raw materials projects. I give this information only so that you understand where my opinion comes from.
I’ll probably end with this for today, and if someone is interested, and you want to know what information you need to provide to investors, banks, how to present it, or maybe something else - please write in comments, and I I will try to supplement my post with this information!
UPD I dragged the topic from "Startups" to "I am PR", because the people immediately began to minus. He scratched his head and decided that it probably looks like PR, although I honestly did not think about it. If possible, I ask those who did not like the article to comment on the reasons. Thanks.
UPD2. Sorry, I overlooked many mistakes and typos - I guess it's time to sleep. Thanks to variable for pointing out some of them.
Having worked for some time in an investment company, I realized how unstructured this segment of the business is, how undeveloped it is. The funny thing is that the country has a huge number of ideas (especially in IT), a huge number of people (if we talk about private, sole investors) with money who are eager to invest them somewhere, but no - they cannot find each other ...
Of course, by - the situation with funds is different, funds are easier to find ... However, there are two points: first, funds (especially Russian ones) are rarely invested in startups. It's hard to talk about the reasons, there are many of them ... Many startups want to get money quickly, and when dealing with the fund, you rarely make a deal faster than in a year.
Secondly, in order to receive funding from the fund you must convince ALL decision makers.
Thirdly, funds do not invest for at least a little longer: they should have a exit strategy in a couple of years, so under a contract you usually have to buy back their share in three years. But you can’t save so much money by that time! And you just may not be interested in this.
Fourth: if you do not expect an exponential increase in turnover / profit, but you need a small amount (for example, recently I was answered a request about a promising company in need of $ 4 million, and from the IT fund, that the scale is too crayon).
And to be honest, the fund will never have close relations with you or delve into the problems of your business, but a private investor can become your dad and mom in one person, give valuable advice (these are usually very experienced people in business), yes and agree to much more favorable and convenient conditions. Although, of course, this is not always the case.
Only, as I said, finding private investors is much more difficult. And here, companies such as ours are most useful. Such companies have accumulated client bases, both private and private, they will always delve into the business to find, bring to light all the most interesting aspects and indicators of your ideas and business, will give you valuable advice, because they, like you are interested in getting you money.
In addition, such offices can attract not only investors, but also borrowed capital. For example, you attract part of it from investors, and part (after all, why give someone your share in the business), for already attracted money, take from credit organizations. And here you alone will have a hard time, because you have to be able to do business with them too ...
I work for Beford Investments, which is involved in attracting financing for investment, development projects, business development projects, including start-ups, as well as deals with transaction support, business valuation, preparation of documentation, presentations for investors, adjusts the strategy, if necessary, consulting - in general, the whole package in this area. The company works in many industry areas, including IT. Do not consider it for advertising: IT startups are of little interest to us, because we work for a percentage of the amount, and in this segment the amounts are small compared, for example, with raw materials projects. I give this information only so that you understand where my opinion comes from.
I’ll probably end with this for today, and if someone is interested, and you want to know what information you need to provide to investors, banks, how to present it, or maybe something else - please write in comments, and I I will try to supplement my post with this information!
UPD I dragged the topic from "Startups" to "I am PR", because the people immediately began to minus. He scratched his head and decided that it probably looks like PR, although I honestly did not think about it. If possible, I ask those who did not like the article to comment on the reasons. Thanks.
UPD2. Sorry, I overlooked many mistakes and typos - I guess it's time to sleep. Thanks to variable for pointing out some of them.