Part 2: Heading for Entrepreneur Country? Successful entrepreneurs share their learnings at the latest Forum
This is our second installment from our trip to the Entrepreneur Country Forum this week. We are sharing a few snippets and learnings from some of the new speakers that stood out for us, read part 1 here.
Tim Levene from Augmentum Capital (a VC with a difference)
Interestingly, Tim has changed hats – he was an entrepreneur seeking funding 4 times over the last 15 years for his businesses, and now he is on the other side of the table as a VC. He believes that other funds are missing a trick only investing in businesses over £10m, and so Augmentum Capital focuses on those below £10m.
Tim spoke about the changed economic environment. It now takes on average 26 months to raise capital, and where once the bull market meant mediocre and sometimes even poor businesses got investment, now only the very best will. So he had some golden rules for those seeking VC investment:
- Have a very clear exec summary: without it you won’t even get through the door. In one simple sentence you need to be able to explain in plain English exactly what your business does and what ‘problem’ it solves for the customer [that’s the customer proposition I go on about!]
- Research the VC: Know about them and find one that has invested in businesses similar to yours.
- Create a sense of vision: all business plans have a hockey stick Yr 3 financial projection, [Tim largely ignores it] the vision is more compelling
- Chemistry does matter
- Prepare yourself for significant distraction looking for funding, so make sure the business is still running well while this is happening
- Always have a back up investor, in fact have several options until the VC agreement is actually signed
- But… be selective and don’t tout yourself around too much, as it is a small world
- Commit to a realistic timeframe – it will be at least another 2 months from committing to funding to actually getting the cash
- Be clear on the investment plan – you don’t want to have to go back on the VC hunt 18 months later
- Value realistically – price your business fairly, if it is worth more, it will get bid up
- Don’t choose your investor based on money alone and don’t get bullied on terms.
Our favourite quote from Tim “success raising money does not mean business success, generating revenue is the real success”.
Tomorrow’s edition will share Martyn Dawes views on how to start with a scale business in mind.