Get Funded Faster!
We are deep into planning 2017 at SurePath. As part of that process, we did a detailed post mortem review of the the fundraising deals that our clients closed last year. Below are the four attributes that every deal shared. Each of these was key to the success of the deal.
High Revenue Growth
While no fundraising round is ‘easy’, the clients that got the most and quickest investor interest had very strong top line growth. No client had growth below 100% per year. The best ones were growing 3x per year.
Public and private equity investors reward growth rate above all else.
Teams that can context switch
When we thought about the interactions that investors had with our clients’ senior leadership, one clear pattern that stood out was our clients’ ability to easily switch context. They could go from pitching a grand vision to dive deep into the weeds and details. Every CEO had a clear grasp of the drivers of the business as well as a grand, compelling, greed-inducing vision.
Leaders who learn
There is so much that is written about fundraising, yet every deal is different. Even clients who had raised before approached this transaction with open minds. They were open to guidance and input (in fact they sought it out). They learned and improved after every investor interaction. They had a high degree of self awareness and no ‘ego’ that would get in the way of their learning.
A solid finance function
Every CEO was backed by a solid finance leader (not necessarily a CFO). Even earlier stage companies that outsourced some of their finance function invested more in that service provider before and during the fundraising process to ensure they had complete and timely financial information. This was needed in order to build reliable forecasts, complete data rooms and respond to investor information requests.
An existing pipeline
Every CEO devoted a portion of their time on an ongoing basis to building relationships with the investor community. As a result, when it came time to raise capital, they began that process with an initial set of warm relationships rather than starting from scratch.
CEO commitment to the process
Finally, raising capital is time consuming. In all of our deals, the CEOs recognized this and committed to clear their schedules in order to prepare as quickly as possible and build momentum and urgency in the fundraising process. In some cases, making that time availability required adding to the senior management team in advance so that things would continue to run well during the fundraising process.
As you read this, there are probably few surprises. But actually delivering on all of these attributes takes considerable effort and preparation.
About SurePath Capital
Based in Toronto and San Francisco, SurePath Capital Partners is the only investment bank focused exclusively on the global SMB software market. We work with sellers in this market to ensure they are funded for growth and positioned for meaningful exits. In addition, we work with buyers in this market to help shape their strategy and execute acquisitions.