Funding & Finance
Do you actually need it? Extra financing normally comes at a premium – it will probably cost you a lot of stock and at an investor friendly price. Do not leave it too late to raise cash – if you need it by next month you are probably too late so start preparing for that fire sale! Make sure your cash flow reports give you the correct information; weekly, if not a daily position, is essential. You should be able to forecast the exact time that your company runs out of cash. Give yourself a six months run at getting new finance because if you don’t you will quickly discover that a healthy position has turned 180 degrees overnight. By then it will be too late to ask yourself whether your finance director is up to the job.
Be sure that you can articulate precisely when, how and to what the financing will be committed. Avoid ‘working capital’ funding (bad message) – expansion funding (good message) is much better.
If nothing else be able to articulate accurately the exit plan for potential investors. Absolute precision with timescales and numbers is essential.