What companies like the investors?

Any successful company will sooner or later gets in a note to investors. But how to keep his eyes on me, and then convince to invest in your business? What is important to meet the requirements?

The company, which attracts investment, should be mature enough to "digest" embedded in it. Amounts received today, the Russian company in the form of investments, are rarely below $ 500 thousand if the enterprise has no resources to effectively use these investments, we have to honestly admit to yourself: this type of financing is not for me. In this case, better and easier to take an ordinary loan from a bank.

However, examples where investors have invested in the business, located at the zero stage of development, still exists. This experience has been a partner of investment fund Glean eagle Group, which in 1997 invested more than $ 240 million into the project, prepared by two entrepreneurs who have at the moment only a promising business plan and a license to provide mobile communications services. "But to us it was obvious that the market that were going to come our partners, great opportunities," - says managing partner of the fund Glean eagle Group Gennady Lozovsky. - "We, in fact, have created a company together with entrepreneurs. Our participation in the project was so deep that one of the foundation members had worked in its finance director. Such tactics dictated by the high risks that we have undertaken. And she herself justified. In the four years of joint management, the company became the largest cellular operator in their market. Today, its annual turnover exceeds $ 300 million. "

However, this example is the exception rather than the rule. If the company does not "killer" business plan, it is unlikely to attract funding, having no experience in the market. Besides, most of the investment fund has a clear sequence: not work with projects at zero phase.

Why prepare?

What are the signs by which to judge the maturity of the company? Extensive experience in their industry's market, solid momentum and growth potential. But this is not enough. Before you start looking for an investor, business owner must answer for yourself is not a simple question: "Am I ready to let people from outside to participate in the management of their company?". In exchange for financial investments the investor receives a share in the authorized capital of the company (usually at least a blocking stake) and a board seat. Many entrepreneurs are accustomed to single-handedly change their business state, it is not easy to accept such conditions and, moreover, change the style of leadership.

Thus, if the company intends to make a breakthrough with the help of investment in this important step should be carefully prepared.

The best way to approach the investor - is to look at your business through his eyes, to understand what benefits he is seeking, offering the company financing. Because, obviously, different types of investors (both financial and strategic) are looking at companies with different goals.

What do you want to know about your potential partner?

Future buyers are interested in and management team. He must be convinced that she has enough experience and knowledge to support the growth of the company. Therefore, before the deal, the representatives of the investor to gather information about the business reputation of the company, talking to her key staff. When it comes to production, it is likely the investor wants to ensure its security and to conduct environmental review.

According to the vice-president of Delta Capital Kirill Dmitriev, a full cycle, from the moment of acquaintance with a partner before the latter signed a contract to take 10 to 16 weeks: "Often people come to us a business plan for 120 pages, is that the description business fits in just one paragraph. But we believe the best three-five-page document. strict rules here, but it is very important that the document made clear the four aspects that concern investors: management team, business, the risk / return and a possible sale. Based on a detailed examine these issues, investors assess the probability of an adequate return on its investments and decides whether to continue to explore the business further. "

Success Factors

What should be the company to successfully pass through the sieve of all these checks? It must meet the following criteria. Market potential. This is perhaps the most important aspect that worries investors. Is there a market that is running a possible partner, the potential for development? If not, it is unlikely to show to your company's interest.

The ratings on the market. The greatest chance to attract investments are companies that take on the growing market leadership position. Depending on the strategy of the investor, this characteristic may be the main or retreat into the background.

Transparency and clarity. Almost all investors require companies to provide an audit of its financial activities. For foreign investors is especially important that all statements in the company was conducted by the international standard. Often the companies are required and that an audit conducted one of the representatives of the "big five". It relieves investors from the work on its cross-checking.

Jasna should be the legal structure of the company. If its assets are spread across different countries, it alerted the majority of investors. Primarily they involve the company, getting to know that, do not have to rack their brains than it actually owns and who exactly is behind it.

Prospects of selling a business. The ultimate goal of the investor - sale of its share of business, so it is very important even at the beginning of work with the company to see potential buyers of its share.

The effectiveness of investment. Any investor needs to know how its money will be used. It is therefore very important to prepare a business plan, which shows in what projects expected to invest the money, what results will make the company a few years and what benefit, respectively, the investor.

By transforming their businesses should start preparing for no less than a year. It is the time required from companies wishing to attract investments to rebuild the key business processes. But already during the first meeting with an investor must have a complete set of information in order to dispel any doubts about its future success of partnership.

What is different from financial investments from strategic?

The objectives of the two main types of investors - financial and strategic - in many ways are different. Financial investors (mainly private equity funds) tend to become partners of the company for a period of three to six years. Their representatives are involved in determining the basic directions of its development work on the board of directors. And after the company's value grows significantly, financial investors resell their shares.

The strategic investor is initially configured to a lasting relationship. Most of them becomes a major holding company, which invests capital in a promising company working in the same field that he is. The purpose of "strategists" - a long-term profit of the company. Therefore, they invest in a business partner of larger amounts and more actively participate in governance. For example, purchasing new equipment, are restructuring in the company of a system of financial control, adjust marketing strategy, develop distribution.