What makes a company attractive to investors? by Fiona Timba, NEF Class of 2015
People. It all comes down to people.
On 13 November 2014 the New Entrepreneurs Foundation hosted their second speaker event of the 2014/15 programme. An accomplished panel consisting of David Gregson, Senior Advisor of Phoenix Equity Partners, Gerry Murphy, Senior Managing Director of Blackstone Group and Chris Hodges, Investment Director of the Business Growth Fund spent an evening discussing what makes companies attractive to investors. The panel represented the various types of investor groups that start ups can expect to come into contact with during the different stages of their entrepreneurial journey and the room was filled with entrepreneurs searching for the Holy Grail, investment … or at least the answer to the question what would make these investors invest in them? What is the elusive X Factor?
It’s quite common to hear that when starting a company one of the most important things to consider is the team that you surround yourself with, but it was surprised to hear that even post-revenue, when investing (in some cases billions of pounds) that profit was not the driving (or only) consideration of investors. The panel were in agreement that just as much as they invest in a company, they invest in the people who run the company. As such the people who run the company have to interest them and have to be likeable.
What does this mean for start-ups? Well at every stage and with every new hire you have to think carefully about the team your creating and ask yourself:
- Does your business proposition have a right to exist and
- Is your team fit for purpose?
If you can answer these questions in the affirmative, you’ll be one step closer to securing that Holy Grail.
by Fiona Timba, Class of 2015