Lessons From Tim Jackson
How To Attract Investors
Recently Raising Partners were at a dinner with Tim Jackson investor, entrepreneur, writer and founder of Lean Investments. Usually making investments of between £10,000 and £500,000 at seed stage, Tim shared his top four things he looks for when considering an investment.
Team – How investable are the team? It’s not about how much experience these individuals have in their field as inexperience in an industry often leads to innovation. It is also very telling if entrepreneurs and their team members are willing to give up their well-paid, salaried jobs in the pursuit of their business. If you aren’t committed and willing to invest in your idea then why should anyone else?
Traction – How far have you got with your business with no investment? Press features and a website don’t cut it, investors want to see tangible results. What sales are you making? If you are building an app then the important thing is your engagement rather than your users. Anyone can download an app but getting people to engage with your product and build a community online is very different.
Market – What is the size of your market? Is it growing and is there enough people in it that you can realistically reach and sell to?
Barriers – What barriers to entry are there for the competition? If you have something that can be copyrighted, patented or trademarked then make sure you have done this. Investors want businesses to be competitive and sustainable on multiple levels not just price and user experience.
It was when discussing barriers that Tim made the observation of why Richard Branson has been so successful building his empire – he has entered highly regulated markets that are notoriously difficult to work in; trains, planes and banking. These industries are also renowned for offering a poor product and service, meaning the Sir Richard’s Virgin empire only has to be a tiny bit better than the competition to attract and retain customers.
Finally, we asked Tim what one thing instantly puts him off a deal. The answer? Being asked to sign an NDA. When you consider the volumes of business plans investors read, it is highly likely that someone at some point in time will be doing something similar to you and signing an NDA makes navigating future investments potentially a legal minefield.
If you are a business owner, you will know first hand that one of the most important things (and arguably one of the hardest) about running your business will be financing it. Whether it is raising money from friends and family, getting a loan from the bank or taking private investment from VCs. Cash is king and if you don’t have cash in your business before too long you won’t have a business.
As much as I would love there to be, over the last few years I have learnt that there isn’t a one size fits all, yellow brick road to success for raising any kind of funding for your business. Every raise, just like every pitch, every business and every team, is different.
At Raising Partners we thought we would clear a few things up around SEIS & EIS tax relief and why both are so important to your fundraising process.
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Raising Partners is an innovative investment consultancy which partners with businesses of all sizes to secure investment through angel networks, VCs and crowdfunding.
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We provide a comprehensive service for entrepreneurs, start-ups or established businesses looking to raise equity investment. We work with companies to deliver a tailored level of service with our typical project timeline ranging between four and six months.
We’ve raised millions for businesses around the world. From AI shopping platforms to raw dog food, we’ve got a wealth of cross-sector experience.
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