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You won't get investment because...

Discussion in 'General Business Forum' started by Mark T Jones, Mar 2, 2018.

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  1. Mark T Jones

    Mark T Jones UKBF Enthusiast Free Member

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    Aimed at all those posters who come here looking for investment.

    Investment is a serious business; investors are busy people. Very busy indeed. They also place great value on their time. They are literally inundated with random propositions (I'm not an investor, and even I get my fair share) - most of which remain unopened.

    The very fact that you have come on here tells me that you aren't investment ready, because:

    • You have to appear investable. Time after time this comes up - investors invest primarily in people. Not ideas - they are 10 a penny. They also look for a viable business with proof of concept, revenues etc- but far more important is you - the person who is going to drive their business to success. They don't want to pity you, nor do they want to think you believe the world owes them a living. They want to see and hear a strong, motivated, business-minded person who can go through good times and bad to make the business a success.

    • You have to have done your research. Not just on your business itself (more later..), but on investment and investors. 'Which is better, loan or investment?' is the type of question you ask in the research phase, not when you are pitching for investment. That just makes you look like an amateur. Investors are individuals with - often large - egos. They want to know how you have selected them as a likely partner - what synergies there might be between your business and theirs. Similarly, they want a sensible proposition on the table. To achieve that you have to have put a realistic valuation on your business - slightly optimistic is normal - wildly optimistic will go straight to the shredder.

    • You have to have an exit. Investors are in it for the money, plain and simple. They make money in 3 ways:
    1. Management / consultancy fees.
    2. Dividends.
    3. Exit.
    They will set their own fees, which will vary dependent on the required input.

    Your plan needs to realistically show how they will earn dividends, and above all how they will get their big pay day on exit - trade sale, flotation, MBO etc - as a rule they will be looking to at least treble their investment in 3 - 5 years.

    • You have to have a sensible business plan. Not a glossy 100 page 'sales prospectus / product description / work of fiction', but a straight forward functioning plan which clearly shows how the business will operate, what the significant steps will be to achieving smart goals, a sensible cashflow projection showing both the need for finance and the return to your investor. When questioned, you need t fully understand your plan, so if you do pay a professional to do it, you must be closely involved.
    So, by all means come on here to ask questions about investment, or ho to put your strategy together - but posting half-baked investment request will only mark you out as an amateur, a chancer and - ultimately - uninvestable.​

     
    Posted: Mar 2, 2018 By: Mark T Jones Member since: Nov 4, 2015
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  2. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

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    I will also add that you do not know who is reading and watching here

    I wont say much(privacy is paramount) but we do know that an investor that most people would like to work with reads this along with at least two MPs

    So unlike most of us here it is very important how you present yourself online
     
    Posted: Mar 2, 2018 By: JEREMY HAWKE Member since: Mar 4, 2008
    #2
  3. The Secret Strategist

    The Secret Strategist UKBF Newcomer Free Member

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    Nice article.

    I was speaking to an investor a few weeks ago who said she always looks to achieve deals which are 60/60 split. Both parties need to feel they are getting the better deal. She said you’d be surprised on the amount of business’s that want her money yet expect her to not be involved at all.

    I suppose the key thing for businesses to consider is the difference between engaging with an investor or simply applying for a bank loan. There is a difference & people need to be mindful of that.
     
    Posted: Mar 2, 2018 By: The Secret Strategist Member since: Jan 26, 2018
    #3
  4. Mark T Jones

    Mark T Jones UKBF Enthusiast Free Member

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    Very true - investors are people, not cash machines; investees must understand that they are entering into a relationship, not just a transaction.
     
    Posted: Mar 2, 2018 By: Mark T Jones Member since: Nov 4, 2015
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  5. Mr D

    Mr D UKBF Legend Free Member

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    Have lost count of the starry eyed business people who think they can ask for £30k, it won't cost them a penny and they'll get that £30k up front in a couple of weeks then the investor will sit back and wait for the dividend cheque in a couple of years time.

    Or the ones who want 100% of the expansion / startup / growth of the business being funded by other people. No skin in the game, nothing from FFF.

    Reality as some of us know is .... different.

    Came across someone on the forums last night who seemed unaware of paying legal costs. Winced when I saw it.
     
    Posted: Mar 2, 2018 By: Mr D Member since: Feb 12, 2017
    #5
  6. Mark T Jones

    Mark T Jones UKBF Enthusiast Free Member

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    And got bolshy when you mentioned it LOL
     
    Posted: Mar 2, 2018 By: Mark T Jones Member since: Nov 4, 2015
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  7. Mr D

    Mr D UKBF Legend Free Member

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    Yes I noticed that. :)

    Seriously it appears some want investors to be big versions of the local bank manager. Chat over a cup of tea, print paperwork, sign and you have the money in your account.

    Or there used to be an advert for Carlsberg beer that suggested if they ran a bank they'd make things far better for you... probably the best lager in the world. :)
    May colour some people's expectations.
     
    Posted: Mar 2, 2018 By: Mr D Member since: Feb 12, 2017
    #7
  8. The next Steve Jobs

    The next Steve Jobs UKBF Regular Free Member

    175 11
    Q ) Why do investors invest in people...mostly

    A ) Because a 'switched on CEO' can create or run virtually any business

    And that eliminates 90% of the investors risk 'right there and then

    More importantly than that, a switched on CEO will have the instinctive vision required to scale nationally, and globally and can spot icebergs before they've even been created because they can see the future almost as clearly as the present


    On rare occasions a company will have stumbled onto a winner but lacks the management skills and rescource base to maximise the companies potential... law of the lid...here a visionary investor can step in and effectivley scale the business with the originators yeilding some control in exchange for a slice of global profits.
     
    Last edited: Mar 19, 2018
    Posted: Mar 19, 2018 By: The next Steve Jobs Member since: Mar 19, 2018
    #8
  9. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

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    But surly this is the job of the local coastguard
     
    Posted: Mar 19, 2018 By: JEREMY HAWKE Member since: Mar 4, 2008
    #9
  10. The next Steve Jobs

    The next Steve Jobs UKBF Regular Free Member

    175 11
    I can assure you its the 'day job' of every truly successful investor and entrepreneur on the planet, lol

    Our ability to predict the future sets us apart from the animals, some humans are more gifted than others .... my businesses plan extends out to 3500ad


    ... It's going to be a triple rainbow
     
    Posted: Mar 19, 2018 By: The next Steve Jobs Member since: Mar 19, 2018
    #10
  11. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

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    Thank you for that
    I'm always keen to learn more :)

    Is the coastguard gifted or does he just do that because he did not want to work in the coffee shop on the beach
     
    Posted: Mar 19, 2018 By: JEREMY HAWKE Member since: Mar 4, 2008
    #11
  12. Mr D

    Mr D UKBF Legend Free Member

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    Can run virtually any business?

    Great. There's a furniture restorer looking to sell his business a couple of weeks back. A switched on CEO should be able to do that.

    Or there was a few months back a blacksmith shop going a few miles from me. owner retiring. Blacksmith work? A switched on CEO should be able to do that.
     
    Posted: Mar 19, 2018 By: Mr D Member since: Feb 12, 2017
    #12
  13. The next Steve Jobs

    The next Steve Jobs UKBF Regular Free Member

    175 11
    In the UK many coast guards are volunteers...in every society there are those who take pride in 'being the sheep dog's

    1066 was the last time this island was invaded and overrun, since then succesive generations have INVESTED in institutions such as the fire service the NHS and of course 'Baywatch' .....rampant capitalism leads to rampant exploitation ... so sometimes it's better to invest in a nation than a company to do a particular job


    Ps. Your living on a planet without an asteroid defence, our species needs to invest in a Panglobal organisation that will NEVER miss the ball...its extinction garanteed otherwise!

    The cost amounts to approx £1 a year per person ....this figure remains true for global populations of 500 million to 50 billion ... that's my other day job, developing the global tech and infrastructure for an asteroid defence system.
     
    Last edited: Mar 19, 2018
    Posted: Mar 19, 2018 By: The next Steve Jobs Member since: Mar 19, 2018
    #13
  14. Mr D

    Mr D UKBF Legend Free Member

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    Yes, even if the nation does a bad job of things. Hence the rise in private care providers with the support of a chunk of the public. Funded usually only in part by the NHS.
    You got a hospice in your area or using the NHS end of life care system?
     
    Posted: Mar 19, 2018 By: Mr D Member since: Feb 12, 2017
    #14
  15. Mark T Jones

    Mark T Jones UKBF Enthusiast Free Member

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    A switched on CEO could do these things because they run businesses and employ the skills to do the job. Which is really the point
     
    Posted: Mar 19, 2018 By: Mark T Jones Member since: Nov 4, 2015
    #15
  16. Mr D

    Mr D UKBF Legend Free Member

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    Maybe I misread what the other poster was saying then.
     
    Posted: Mar 19, 2018 By: Mr D Member since: Feb 12, 2017
    #16
  17. The next Steve Jobs

    The next Steve Jobs UKBF Regular Free Member

    175 11
    Clarification

    START UP CEO's need to be 'even more switched on' than those running established companies because early INVESTORS are specifically looking for ZERO TO HERO personality traits.

    Bill Gates and Steve Jobs are poles apart personality wise, what counts is the right kind of personality for the specific tasks ahead, as the company grows rock stars give way to technocrats

    I highly recommend watching THE PIRATES OF SILICON VALLEY if your involved in social tech, consumer tech and related global enterprises
     
    Posted: Mar 19, 2018 By: The next Steve Jobs Member since: Mar 19, 2018
    #17
  18. Mr D

    Mr D UKBF Legend Free Member

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    Good thing neither have zero to hero personality traits then. They'd have joined the uniformed services.
     
    Posted: Mar 19, 2018 By: Mr D Member since: Feb 12, 2017
    #18
  19. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

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    My question to you is
    You have just joined a business forum and made these statements

    Did you not understand that even the dumbest members on here already knew that :):mad:

    Furthermore nobody on here wants to be like Jobs

    He is dead ! :eek::eek:
     
    Posted: Mar 19, 2018 By: JEREMY HAWKE Member since: Mar 4, 2008
    #19
  20. The next Steve Jobs

    The next Steve Jobs UKBF Regular Free Member

    175 11
    Clarification

    IF your the CEO of an established business then potential investors will want to see a clear paper trail and probably want to observe your workflow procedures. They will also want to get a good feel for how employee teams work together.

    They will also be looking for potential 'barriers to scaling' and be keen to discuss 'workarounds'

    Investors will also be taking stock of your mental flexibility and openness to new ideas, after all growth tends to involve a fair bit of change and it's the potential growth factors that they are attracted to in the first place.
     
    Posted: Mar 19, 2018 By: The next Steve Jobs Member since: Mar 19, 2018
    #20
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