1st Edition
How to Attract Investors A Personal Guide to Understanding Their Mindset and Requirements
Investors are often looked upon as one homogeneous group of people with money ready to invest; however, this group is very diverse. In some ways, investors are like car buyers who seek common denominators in a car, such as the engine, wheels, brakes and seats, but the car they end up buying depends on personal preferences, needs and the money available. For investors the common denominator is the good business case, the ‘engine, wheels, brakes, seats’ being a comprehensive business plan. However, which business case they will prefer in the end depends on their personal preference and financial capacity.
How to Attract Investors takes the reader into the minds of the investors, addressing many of the challenges connected to investor search and negotiation and living with investors as co-owners. Even the finest skills of the brightest entrepreneurs wouldn’t be complete without the knowledge of the investor’s mind. This is the book that unravels it, layer by layer.
Investors and Funding
Introduction
The Deal Funnel: Survival of the Fittest
What Makes the Private Equity Sector so Difficult to Understand?
How It All Started
Venture Fund and Its Performance Challenge
Business Angels
Management of Risk
Conclusion about Risk Taking
How Difficult Can It Be to Convince Investors to Invest?
Attracting Investors
Investors and Funding
Funding via Debt, Equity or Public Grants
Grants as a Funding Source for Business Innovation
Business or Just a Dream: The Business Plan Puzzle
Introduction to the "Three Circles"
The Market
Technical Solution and "Missing the Beat"
Connecting the "Dots" or Missing Them
Sales, Selling and Product Delivery
Textbook Management and the Team
The Business Plan Puzzle
Competition and Competitors
Innovation, Products and Production
Marketing, Sales and Internationalisation
Operations and Management
Business Models and Value Chains
Business Model Concept
Business-Modelling Process
Timing
Competitor Analysis with Respect to Products and Business Models
ESCO Model as Remover of Customer Risk Concerns
IPR and Freedom to Operate
Patenting as a Business Strategic Decision
Certification and Regulatory Compliance
Agreements
Ready to Meet with Investors and Accept Their Investments and Conditions?
Funding, Liquidity and Investors
Investors’ Interest
Contacting Investors
Negotiation with Investors
Negotiating the Terms of Investment
Risk of Dilution
Investment, Management and Board
Do It Yourself (DIY) or Get Help from an Advisor
Life with Investors
Introduction
The Limit to Rational Decisions
Right or Wrong Decisions?
Relationship with Investors
Can We Learn?
How and Why Decisions are Made?
Negotiations and the Process
Board Composition
The Exit: A Dream Scenario or Nightmare?
To Sum Up
Annexures
Full Business Plan Checklist
Investor Search and Negotiation Checklist
References
Patenting and Other Forms of Intellectual Property Rights Protection
Examples of Strategic Steps to be Considered in an Infringement Case
The "Rosetta" Term Sheet
Investment Theory for "Dummies"
Further Readings and Few Abstracts
Biography
Uffe Bundgaard-Jørgensen has a 40-year career as an advisor on investment matters around the globe, including the World Bank and European Union. For 10 years he was CEO of a large Danish venture capital fund and has also served as a member of the board of numerous SMEs. Since 2000 he is CEO of InvestorNet-Gate2Growth, during which he has developed and conducted more than 150 ‘How to Attract Investors’ and ‘Horizon 2020 SME Instrument’ master classes throughout Europe.
Three co-authors from InvestorNet-Gate2Growth, all with an MSc degree from Copenhagen Business School, have provided direct and valuable contributions to the cases and the analysis: Rasmus Egvad has many years of experience working with private investors and coaching companies on how to attract funding. Louise Pierrel Mikkelsen has many years experience in screening, selecting and developing business cases, also for EU-supported business cases. Carmen Bianca Socaciu has extensive experience in practical business coaching.
"How to Attract Investors is extensive, very practical and truly hands-on, filling an important gap in entrepreneurship literature: a book that provides entrepreneurs with advice they can use and act on instantly."
—Marc-Michael Bergfeld, professor of global entrepreneurship and family firms, Munich Business School, Germany and managing director, CPG—Courage Partners Group, Germany
"An end-to-end approach to enticing and managing investors. Essential reading for entrepreneurs."
—John Straw, serial entrepreneur and author of iDisrupted and senior consultant at IBM IoT, McKinsey and IDisruptive, London, UK
"A must-have for ambitious entrepreneurs and recommended reading for all those working with entrepreneurs in the ecosystem."
—William Stevens, managing director, Tech Tour/Europe Unlimited, Belgium
"This book is a valuable tool to evaluate where to use the limited resources in order to succeed with the challenging task of securing liquidity for future growth, while still staying in control."
—Steen Donner, CEO of Scion DTU, Science and Technology Park, Technical University of Denmark, Denmark
