This blog post may contain references to products or services from one or more of our advertisers or partners. We may receive compensation when you click on links to those products or services.
With the values of various technology companies increasing by the day and continuing to outperform the rest of the market, it's still a good time to ensure you're keeping your business investment-ready. There is still a lot of big money looking to invest in growing companies. This has created a unique opportunity for tech companies to get some big investments to help them scale their businesses. Read more in this article from Lowland Investment Company.
The changes brought on by the pandemic have spurred a growth opportunity for tech companies specializing in hardware and software development. There is a lot of potential to grow. Luckily, this isn't a trend that is expected to slow down anytime soon. Investors are constantly looking for the next Amazon or Microsoft. They want to get their money invested early and reap the rewards over the long haul.
One of the most important first steps for a startup looking to become investment-ready is to reach out to their inner circle. You want to reach out to your network to try to get the low-hanging fruit. You'll find a lot of different people in your network likely have a professional network full of people looking to invest. You'll find plenty that has existing client relationships with banks, angels, and more. They will be looking to invest cash in exchange for ownership equity or convertible debt. You will also find a lot of corporate finance specialists that can offer a lot of valuable and actionable advice to help you grow your capital or sell your company.
To maximize your chances of contracting and targeting the right investors, you're going to want to ensure you have a pulse on the marketplace. You need to identify the key trends and find investors with the experience needed. You can specifically look for investors that have shown an interest in buying similar companies. This can be done by looking closely at trade magazines and more. You want to speak with similar companies as your own that have had success at getting their business funded.
There are numerous different options available when it comes to finding money to support your scaling efforts. However, it's always worth noting that the best option available is likely going to be determined by the stage you are at in your journey. For instance, a venture capital investor is likely going to want a much more mature business with a lot of proven tech and stability. Whereas, a business angel will be much more willing to help a company that's introducing brand new software or a new app that needs more cash and less direction. Other funding options include crowdfunding, venture capital trusts, and pension funds.
To ensure that your business is positioned as a value proposition for a potential investor, you'll want to strengthen your back office and get everything in order. You don't want to ignore this area of your business and solely invest in the tech stack. For instance, this could be investing in an attorney to protect your IP, property investment or even getting your finances in order. Likewise, they'll want to look over employment contracts to ensure that the most valuable employees have a notice period. You may even want to place restrictive covenants for the employees deemed most valuable to your company. You can also leverage Enterprise Management Incentive Schemes to ensure you are providing ample reasons to stay with and to help grow your business.
Every business owner should be looking for different ways to get the long-term income streams they need for sustainability. For instance, manufacturers could end up looking into getting contracts with various customers for longer-term services like maintenance. If the business is not making money, this can help ease a potential investor's mind knowing they are on their way to securing profits in the future.
Any startup owner should look at the different ways to effectively differentiate themselves within the marketplace and to try to maximize their publicity as much as possible. This could be trying to obtain industry-specific awards, getting PR, or even presenting at conferences within the industry.
When you are aiming to increase the value of your tech startup, you'll need to be adequately prepared. You want to do the necessary due diligence to ensure that you are assessing the risks and all of the opportunities for your business. For a lot of owners, it can be increasingly difficult to manage both their day job and a new startup. By reviewing everything early enough, you can mitigate a lot of risks and position your business as a much more attractive investment opportunity for new investors. You want to get advice from legal experts from the field as it can play a big role in helping you get your business ready for an influx of cash from investors.
Become an Insider
Editorial Disclaimer: The editorial content on this page is not provided by any of the companies mentioned and has not been endorsed by any of these entities. Opinions expressed here are author's alone
The content of this website is for informational purposes only and does not represent investment advice, or an offer or solicitation to buy or sell any security, investment, or product. Investors are encouraged to do their own due diligence, and, if necessary, consult professional advising before making any investment decisions. Investing involves a high degree of risk, and financial losses may occur.
