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Fundraising Simulator

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Topic 11, Lesson 1
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Top tips from a CFO/investor

Dan Wells October 26, 2021
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Mark Rodel-Duffy, an experienced CFO who now acts as a Portfolio CFO, shares his experiences regarding fundraising.  Mark has performed four significant fundraising rounds during his career to date, including an AIM flotation during the period.  Mark also has strong recent experience acting on the investor side of fundraising transactions to help them determine whether to invest during fundraising rounds.

During this video, Mark shares his experiences to provide you with a combination of both the CFO’s and investor’s perspective during a challenging fundraising process.  This includes many top tips within the following areas:

State how you will use the funds

You need to make it very clear why you need the funds and how they will help to drive value within the business, for example expansion into new markets.  This will be one of the first key questions that you will get asked if you do not properly cover it.

Highlight your management team

Simply put: “People invest in people”.  Your Founder and CEO will always have an amazing story and will love doing so!  It is important to include their dream vision within your presentation and the various steps required to deliver it.

Bring out your vision

You should present your financials in a way that brings out your whole story.  Think about your key drivers and how to present their trends throughout your historic information, current year results and future projections.

Know your market and competitors

Investors will scrutinise your level of competition, their recent activities and who they are hiring to form a view on the underlying trends within your sector and your competitor threats.  They will also assess the size of your addressable market and its level of growth or decline.  Check what your competitors are saying in public domains so that you are aware of what your investors will be hearing about your sector.

Brief your teams carefully

CFOs naturally spend most of their time working on your financials, such as the income statement, balance sheet and cash flow projections.  Investors will want to know a lot more about your various departments and will want to spend time with each team leader.

Check your sales figures

Your current sales pipeline forms a key part of your short-term projections and your potential investors will most likely talk to your sales team during the process.  It is essential that you are all joined up and telling the same story so that potential investors hear one consistent message.  A word of caution: your sales team will always be naturally optimistic and it is vital that they quote the same numbers as the rest of your management team!

Back up your numbers

Providing backing schedules to support your key financials as investors will have lots of questions about the breakdown of your numbers and how everything fits together.  Experienced investors will always ask you the question that you really don’t want them to ask you!

Hit your monthly budgets

Fundraising processes tend to drag on and cover many months.  It is essential that you achieve your budget and hit all of your KPIs throughout your entire fundraising period, otherwise potential investors may lose confidence in your ability to deliver your plan.  Try to provide your monthly updates as early as possible in order to impress them with your smooth processes.

Be aware of regulatory changes

Ensure that you are aware of the regulatory changes and policies that will impact on your sector in the short-to-medium-term as investors will normally pick up on key changes and raise questions about the impact of these on your business.

Master your presentations

When you are presenting, deliver your numbers with passion and use graphs or statistical tables to backup what you are telling them.  Rehearse well with your CEO and get somebody to watch your rehearsal and ask lots of challenging questions.