When it comes to seeking investment; it’s no secret that it’s fairly competitive out there; whether you are the Greek government, the US government or a blue-chip company, fighting to get the best deal from investors has never been harder. There is still money there to be borrowed, but if you can’t convince the investors that you are a safe investment then you’ll struggle to get the deal you want.
The Greek government’s borrowing rates are at eye-watering levels (it’s not even worth quoting what they are as they’ll probably be higher by the time you read this) and Ireland, Portugal and even Italy are similarly troubled. The IPO market hasn’t exactly been booming in the last 12 months either but there are still some companies keen to come to market. According to Reuters; the $700 million Groupon floatation “opened the IPO window a crack earlier this month and now companies, including Yelp Inc, Angie’s List and even social-gaming giant Zynga, are climbing through it, too”. So while this may not be the start of a new flood of IPOs it does show that there are investors out there willing to put money into a business when they think it’s got some potential (the Groupon IPO was one of the biggest internet deals for years). In fact one thing the UK banks have been saying in recent months is that they want to lend to businesses but there just aren’t the opportunities for them to do so (this line has obviously come under fire from their critics who claim they are reluctant to take the risks at the moment).
So what can those seeking investment do to improve their chances of success? One answer is to simply stand out. While we don’t teach delegates in training sessions to meet investors dressed as clowns or enter the meeting by abseiling through the window (this last idea does seem to be one that Richard Branson can’t stop himself from doing), we do ask that the people we train do everything they can to stand out from their competition. Rather than gimmicks or stunts this, of course, usually means identifying the basics required (in presentations and Q&As particularly) and then getting these right – the truth is that if you can do this then you will likely already be a step ahead of the competition.
Analysts and fund managers sit through a huge number of company presentations searching for either the golden nugget that will boost their cash or perhaps just the reassurance their investment is safe. Chances are they’ve heard the same lines, in the same corporate jargon a hundred times, so speaking in plain English about the goals, values and strengths of your business is key, as is making sure you grab their interest. Giving them the evidence, illustrations, facts and figures (without drowning them in detail) will not only help to bring your story to life, thus getting it remembered, it will back-up and support your case, and in this environment, anything you can do to ‘bullet-proof’ your messages will make a world of difference.
Particularly in the next 12 months, companies who are in front of potential investors can’t risk winging it. With funding likely to be that bit more difficult to find, it’s going to be more important than ever before to make sure senior teams are prepared and ready to tackle anything a cynical analyst will throw at them – after all, you never know, you might not get a second chance – just ask Papandreou.
Written by Will Edwards – www.bluewoodtraining.com – November 2011