An unprecedented amount of growth capital is available for the taking—but only if your company has a good idea and a solid business plan in place. Predicting a record-setting year, PitchBook recently reported VCs infused high-growth U.S. startups with $150 billion worth of capital in the first half of 2021. The bulk of it went toward late-stage VC investments ($108.8 billion so far this year vs. $109.8 billion for the entirety of 2020).
This isn’t just about Silicon Valley tech startups. Interest is high for emerging growth companies focused on the post-pandemic life and workforce (e.g., health care and internet companies), and all types of industries are getting attention, including agriculture, fintech, energy and car companies.
As we dig our way out of the pandemic, we are in a unique moment where there is a lot of capital available, and companies wanting to take the next step in their growth journey need to be ready. Here are the essential steps toward pursuing the next round of funding for your company.
- Know your market. What market are you going to serve and how? How is your app, device, service, or product any different than what’s out there? How will you proceed? The importance of a great idea can’t be understated but you can’t rely on that alone—you need to know that a market exists at a high enough level that can sustain your business.
- Have a clear business plan. Build out a three or five year plan that includes your goals and how you plan to reach them, along with your understanding of your customers, product, and people. Include goalposts so that you can take stock of how far the company progresses and make adjustments as necessary.
- Have a clear story to tell. Investors are looking for credibility—they’re more likely to take you seriously if they can see you have the solid backing of customers or a notable investor. This can lead to the opportunity to tell your story, so be sure you have a succinct, compelling story to tell. When pitch time comes, don’t plan to read from a 15 page, single-spaced document. Rather, you’ll need a handful of slides and a confident, captivating, well-practiced, short speech that will hopefully lead to a fruitful discussion.
- Be able to demonstrate your value. Your pitch needs to go beyond words—you’ll want to also show potential investors why your company is worth their time. You can do this by being prepared with a demo of your software, for example, but be sure what you’re showing is impressive, easy to follow, and bug-free. Also show them proof that others in the marketplace believe in the value you are claiming. How have you solved your customers’ problems? Do you have clear and compelling case studies or client testimonials to share? Can you put them in touch with a customer? Any of these ideas can add to the credibility of your story.
- Tap your network. Reach out to connections you’ve built, to understand how those before you were successful in pursuing growth capital. Every connection you make can get you closer to the potential investor who can help you.
- Be dependable. Investors have hundreds of choices and limited time. If you don’t get back to them when you said you would or provide the information you promised to send, they will move on to the next entrepreneur or promising venture. As much as possible, always underpromise and overdeliver. Be timely in your responses. And do everything you say you are going to do.
Setting Up the Company for This Next Stage of Growth
Putting your idea out into the world, and asking for something in return, easily becomes an all-encompassing endeavor. You can lean on the expertise of financial consultants who can help you solidify your business plan, widen your network and prepare your pitch deck when the time is right. RoseRyan can be your strategic partner through every step of your next capital raising effort and beyond.
As an entrepreneur, you know the promise your company holds. We are here to help you see it through—by supporting you with the business side and getting you closer to your many goals. We can help with the things you don’t know that you don’t know. Learn more about how we support emerging growth companies, and tell our team about your latest challenge.
As CEO of RoseRyan, Dave Roberson leads the day to day business and builds upon the finance consulting firm’s established reputation for guiding companies to greatness. RoseRyan Founder and Chair Kathy Ryan named Dave to the CEO post in January 2020, about two years after he led a large RoseRyan engagement that provided transitional services for the Symantec-DigiCert divestiture. Dave previously served as a senior vice president for Hewlett-Packard Co. and president and CEO at Hitachi Data Systems.
