Guide

Secure equity investment

Pitch smart to secure equity finance

Pitching your plan or proposal effectively to potential investors is important. Try to anticipate the questions and concerns that investors may have and show the benefits of their involvement. For example, you could emphasise the:

  • amount of investment required
  • terms you're proposing - eg share of control, skills, timescale of investment
  • ability of the management team to proceed with the plan
  • likely return on any investment

Make sure your presentation is informative, relevant and engaging.

Many investors will also be interested in your personality, so be enthusiastic and passionate about your business and its potential, without being unrealistic about its prospects.

Tell the company how you can improve their business. Be specific - have figures, outcomes and scenarios prepared and ready. Listen to what is asked, take notes, be open and flexible, and be prepared to come back with revisions and further ideas.

Provide detailed information

You will also need to provide detailed, credible and professionally presented information for the investor. This should include:

  • historical and forecast financial information
  • business policies and procedures
  • customer and supplier details

If the potential investor is interested in collaborating with you, you can start negotiating key issues in detail - eg respective responsibilities, growth targets, the investor's exit strategy, service contracts, warranties and indemnities. You should also specify how the investment relationship will be managed and what involvement they'll have in the company.

If your pitch is successful, you'll need to draw up a plan of how the investor will fit into the way you manage your business.

Some investors may be more of a 'sleeping partner'. They will invest money in the business and share in its profits, but will not take part in running it. Others may want to be actively involved in the management of your business.

You won't have to give up day-to-day control but you will need to negotiate with your investors about the level in which they become involved.

Download private equity guidance from the British Private Equity & Venture Capital Association (BVCA) (PDF, 1.11MB).