What shouldn’t you miss when sat in front of a potential investor? 

Realistic expectations and a realistic growth pattern.

Our partners WealthiHer shared their expertise and knowledge with our members last week whilst enjoying our first breakfast out of Lockdown!

With special guest speakers: Simon Michaels –  HW Fisher, Linda Plant – BBC ‘The Apprentice’ Interviewer / Linda Plant Academy and Lorraine Sellwood – St James’ Place Wealth Management. 

Moderated by: Tamara Gillan.

Covering everything from pensions to negotiations and relationships, it was truly an event that our members will remember.

A question that comes up from our members here at Home Grown is ‘What key information should you bring when meeting with a potential investor?’

• – How can you create the perfect planning horizon? 
• – What are the basics that you need to have to hand when sitting down in front of investors? 
• – Is there an investor cheat sheet?

No one wants to look ill prepared, especially when you’re venturing into funding for the first time. Here’s what our expert panel suggest:

Have a realistic growth path

Here’s Linda Plant’s advice:

“You have to show a realistic expectation. Show that you actually know the growth of your business by having a realistic growth path.”

She goes on to explain how angel investors can see straight through any holes and that it’s best to be conservative.

“You’ve got to know how and when your investor will get their money back, I think common sense places such a massive role in business and certainly I’ve learned that whenever. I interview the candidates on The Apprentice”

Simon Michaels advises that you make sure you know what the money is needed for.

“More often than not you’ll get someone asking for 250,000. They’ll have a clear plan for 200,000 but ask for the additional 50,000 for other ‘bits’…”

• – Have the breakdown of cash needed
• – Clear forecasting 
• – Steer clear of doing the ‘hockey stick type’ forecasts. 

A hockey stick projection, depicted below, is an unrealistic forecast for future sales growth. These projections portray a growth rate substantially higher than what the company has traditionally achieved, and oftentimes make the seller appear not credible.

“ … as an entrepreneur, you’re so passionate about your business and how you can make it work but saying in your first year you’ll make 300,000 and the next will jump into the millions is just looks silly and people can see through that….”

Thank you WealthiHer for partnering with us on our first breakfast back! Here’s to many more.

You can watch the full event here

© Home Grown Club