Investment graph

So, you’re ready to hit the gas

As business consultants, we encounter a lot of businesses that are tacking up a growth curve, or exiting the ‘elbow of the curve’ and anticipating explosive growth. These companies range from technology startups, to mature companies and companies at all points along this spectrum. No matter if your company is a technology company, a non-profit, a manufacturer or a family-owned business, growing entails overcoming a set of constraints that tend to be similar across industries and across companies.

Very often, once the ‘recipe’ for growth is in place, the slope of the growth curve will be gated by the amount of investment that a company can afford to allocate to the activities required to support a new, more aggressive trajectory. Obtaining the investment you require in order to ‘hit the gas’ isn’t a deterministic process. But you can tilt the odds of achieving a positive outcome in your favor.

Is your business investable?

Every entrepreneur and business owner believes that their idea or company is capable of attracting investment, from angels, VCs or banks or other sources. The statistics don’t support this perspective, but if you assess your investability from the investor point of view, you can identify opportunities and gaps that can engineer an approach that has a much higher probability of ‘making the cut.’

When we work with companies that are seeking investment, or believe that they require investment (which is not always the case), one of the first activities that we perform is determining that company’s investability. C-leveled’s approach to assessing investability comprises evaluating these six criteria:

  1. Management Team
  2. Market Opportunity
  3. Go to Market Strategy
  4. Intellectual Property
  5. Stage Of Development
  6. Proforma

While your mileage may vary a bit, these high-level investability drivers are consistently good predictors of successful and unsuccessful fundraising efforts. And once you attach a weighting system to these criteria, you can apply this simple model to virtually any company, in any industry.

We’ll explore all of the investability drivers in future blogs, but the rest of this piece focuses on the most important aspect of determining investability and increasing the level of investability.

Management Team – the #1 investability driver

You’ve probably have hear the -ism

“I’ll invest in a stellar team, pushing a less-than-perfect product, over an average team pushing a great product; every, single time.”
-Said every savvy investor, ever

So, how does your team stack up? Here are some things to think about:

  • If your company is an early-stage organization do the founder(s) possess any startup experience among them?
  • Dow the owners / founders have previous industry experience directly relevant to the new growth market(s) that they’re pursuing?
  • Does the leadership team possess a complementary set of skills?
  • What are the levels of business knowledge or product knowledge that reside within the leadership team?
  • Is the team able and willing to add complementary talent, and enable that talent to perform?
  • Is your team capable of challenging each other, and disagreeing respectfully and productively?

There are no perfect teams, and the concept of a ‘dream team’ generally doesn’t translate very effectively to the real world. Nonetheless, honestly assessing your team through the eyes of a potential investor will identify strengths that you can stress, and identify gaps that you can begin to address.