We were delighted to welcome Anglia Capital Group to the Akcela Incubator, Norwich City’s only startup incubator, to discuss all things investment. Supporting early businesses understand what it takes to get support and investment to grow their businesses. A big thank you to Andrea Finegan, Non-Executive Director of Anglia Capital Group for finding the time to make it to give the presentation at short notice.
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There were of course some interesting discussions and key points raised through the discussion of fundraising, and what investors are looking for in any business. Here are some of the key takeaways.
Interestingly, one of the key components of asking for investment is the people. What have they done previously, how invested are they in the business from both a time and fiancial commitment. This doesn’t neccessarily mean that they have put lots into the business, but the opportunity cost of being a founder over having a job. Are they genuine, authentic and believable. All of these elements support in getting investment for the business.
Preperation and Realism
When you are looking for investment, you should be prepared and have a realistic valuation of the business. The view was that at SEIS stage, most businesses would have a valuation somewhere in the region of £1m to £2m, which could be viewed as a “sweet spot”. Of course this is a very broad view and not the overarching truth. However, coming to an investment group pre-revenue, with a £50m valuation, probably won’t end with an investment in most (reads all) cases.
The other key point is preperation. Good understanding of the financials, a solid business plan, all information available will help an investment go through quickly for an early stage startup.
Remember the Exit
Whilst some Angel investors may be there to invest on a personal and value based approach, many are looking for a return. Usually this is a 10x – 20x return so, if you raise £150,000 be prepared to answer how over a 5 – 7 year period, you feel that an Angel will be able to get a return of £1,500,000 to £3,000,000. This can range of course, but having some sort of understanding of the exit is critical.
As the day progressed there was some excellent talks over lunch and as a community as founders continued to share their experiences of starting a business and the challenges and wins they have had. Keep posted as we look forward to our next meeting, which we will be announcing very soon. Which promises to be an absolutely epic event.