Q. How does partnering with a capital advisory firm like Bishop and Fang give start-ups the best chance of success? 

NB:

• Partnering with a firm like Bishop and Fang helps executives at growing businesses manage their time and takes away some of the burdens of the investment process

• A capital advisory firm also has specific expertise, for example with financial modelling, that can help make sure the facts and figures can be backed up

RS: 

• The enthusiasm that a capital advisory firm like Bishop and Fang can bring to the process is invaluable

• Their expertise in go-to-market strategies play a significant role in the process

Q. How does a business that is looking to raise capital value themselves?

NB:

It isn't an exact science, so there are a few elements to consider:

• How much investors are willing to pay in the marketplace

• Cashflow figures a startup can demonstrate

• The value of similar, more mature organisations can be a helpful guide

• Verifiable assumptions can also help to guide the valuation

Nick also noted that if a start-up has shown fast growth and is operating in a large market, there is more volatility which makes pricing more subjective.

RS:

• Reiterated that a valuation is subjective based on the types of investors you are dealing with

• A start-ups 1, 3, and 5 year timeline

• Revenue and growth estimates also play a big part

Q. How do you decide who is an ideal investor?

NB:

This is another way that capital advisory firms can assist, as this vetting process can be intense and involves a lot of effort with Directors. 

To most start-ups, the ideal investor is:

• Investors who are involved with the process and aren't passive, bringing value to the organisation by offering strategic knowledge or being able to open doors

• An investor that offers multiple rounds of investment, as this saves time and money on the future education and due diligence process 

RS:

With Lygon, it was important that friends, employees, management, family the chance to invest and be a part of Lygon's growth, but a key focus was:

• Figuring out exactly what we want from an investor, and have a clear understanding of how they will help Lygon grow as a business

Q. Advice for any start-ups going through a similar raise process at the moment?

NB: 

• Don’t underestimate the amount of research investors will do on your business

• However, the more research they do, the more likely they will be useful to you

Tricky questions include: 

• What level of traction does your organisation have?

• What is the product market fit?

• What is the total addressable market size?

• What calibre of people do you have on board?

• What is your USP?

RS:

The process felt very similar to an interview process. The whole of the business is under scrutiny and will be compared with competitors doing similar things. 

Tricky questions included:

• What are the contracts you already have signed?

• What is your business structure? 

• What is the information that has been presented, and is there confidence in the figures?