Business
Fundraising
and exits are
processes,
not events
Henry James Morley
You’ve grown your business and now you need
to take the next step. How do you make the right
decision about the route you need to take and
what do you need to do to achieve it?
When it comes to start-ups, the sweat and
hours that have been put into the product/
technology by the developers, endless sales
pitches by salespeople at conferences and
thousands of hours on conference calls
formulating strategy are key success factors,
but they are not used as benchmarks to
measure success, because they are not
tangible.
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Fundraising and exits have double-sided
importance for companies, they have an
important role alongside the previous topics in
the success of a company and are often used
as the key benchmarks to measure the success
of a company, founder and team. The choices
founders make with regards to fundraising
and exits (including whether to not take capital
and who the investors/buyers are) are crucial
for defining whether a company makes it
or breaks as well as how it is benchmarked
against its peers. require convincing a second party (investor or
buyer) to be interested enough in the company
to put their money down. Some key lessons in
how to do this, resulting from supporting tech
companies from across Europe with Business
Development, Fundraising and M&A include:
For some companies, growing through cash
flows, raising no capital and staying private is
both feasible and the best possible route. For
others, raising hundreds of millions of dollars
in venture capital is the only way to succeed
however scary and risky it seems at first
glance. Such is the case for a company finding
itself in a winner take all environment, and in
most cases, where there is an exit, through
which the founders sell a majority stake in
the business to an investor or strategic player
in the market or list on a stock exchange.
Selling the company can enable the company,
product and team to grow far beyond what
they could do on a standalone basis and
an IPO (initial public offering) can give the
company additional funds to grow, as well as
put the pressure of the public markets to work
on creating a sustainable company. •
In order to be able to make the right decision
about the direction of the company and
route taken: no funding, funding and/or an
exit - founders need to be fully aware of the
options available to them. To be successful
in fundraising and exploring exit options it
is paramount to understand that these are
not purely events, they are processes which
require a significant amount of preparation,
persistence and a touch of luck to pull off.
Fundraising and Mergers & Acquisitions (M&A)
•
•
•
•
Show that you are addressing a large
enough market to interest investors who
want to make >10 X on their investments
Prove that you are the best team to capture
that opportunity (tech talent, experience
and character are key)
Be positioned in line with the key trends of
their industry. Why will you be around in
10+ years time?
Exposure. Exposure. Exposure. Put your
company out there in front of the public,
users, customers and iterate fast if you
need to
Engage with as many different market
players as possible on an ongoing basis
(investors, partners and even competitors)
and be open to different ways of working
together
The most successful founders are able to
maintain a dialogue on an ongoing basis
with investors and partners, on top of (and
without distracting them from) the incredibly
tough job(s) they already have of running the
Operations, HR, Strategy, Sales and Product
Development. It is by continuously engaging
with key players in their ecosystem (investors,
partners and even competitors) that they are
aware of the options available to them and
thereby able to make the best decision for the
company. As with all other parts of company
building, when it comes to fundraising and
M&A, as a founder you cannot afford to wait,
you need to be persistent and ready to be
decisive once options arise.
Henry James Morley is originally from the UK and grew up in Spain.
Now living in Vienna, Henry is a Director at i5invest and as part of his role,
supports companies across Enterprise Software (including Open Source),
Cybersecurity and Healthtech with Strategic Partnerships and Corporate
Development. Prior to i5invest he worked in Corporate Strategy roles at OMV
and Adidas after gaining a BA in Business Management and Spanish from
Newcastle University. www.i5invest.com
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