Do you have a business idea or model that investors would be interested in? Do you need support finding your company’s story and pitching it to potential funders?
We recently hosted a Business Growth webinar with Martin Murray, Investment Consultant at Dublin BIC. Martin spoke to us about what investors look for and how to get investor ready.
Martin has 30 years’ experience in telecoms and digital media. He is a senior business leader, founder, entrepreneur and mentor. Martin founded Interactive Return, Ireland’s first online marketing agency and successfully exited the business after it was acquired by Publicis, one of the largest Advertising Agencies in the world.
In this blog, we will cover:
- Dublin BIC – what do they do?
- What investors look for.
- Insight into the 10-slide Investor Pitch Deck.
Business Innovation Centre (BIC) – what do they do?
There are 4 BICs around Ireland; Dublin BIC, Cork BIC, West BIC and South East BIC. They are not-for-profit organisations and a part of the European Business & Innovation Centre Network (EBN). These organisations help businesses to start, grow and scale.
BICs typically operate as public-private partnerships, combining both government funding via Enterprise Ireland and private cash or similar funding opportunities.
Hands-on support – investor ready preparation
BICs will help you with business planning and modelling so you can present in front of potential funders.
Network opportunities - community and collaboration
Check out each of the BIC websites to find local and virtual events and workshops near you.
Connection to investors - access to finance
The Irish BICs are part of a network of organisations that supports the funding of Irish businesses. For instance, the Halo Business Angel Network (HBAN) is a joint initiative between the Irish BICs, Enterprise Ireland and InterTrade Ireland. HBAN is Ireland’s largest network of business angels and syndicates.
A hub for business - incubation centre
1) Dublin BIC manages two incubation centres, Guinness Enterprise Centre (GEC) and Space@DublinBIC, for businesses interested a working space to start a business.
2) South East BIC offers incubation space in Waterford.
3) West BIC offers incubation space in Galway and Donegal.
4) Cork BIC offers incubation space in the National Software Centre, Cork.
1) Market opportunity
When an investor provides equity finance, they look for a return on that investment.
Typically, an angel investor will seek a 5 to 7-times return on investment over a 5-year period. A Venture Capitalist (VC) may seek a 30-times return on investment.
This means that there must be a big market to provide a big opportunity for an investor.
A pitch deck will help you illustrate what work you will do and how you will penetrate that market.
2) Great team
There may only be one founder when a business is starting out – you may have amazing skills and great domain knowledge.
However, it is rare that a single person has all the skills to run a functioning business. For instance, it may be unrealistic that a single person can be responsible for manufacturing, operations, finance, and selling.
If investors can see a diverse skill set, this will help alleviate some of the risk involved with investing in a business. If the great team isn’t there yet, you should at least create a plan to recruit one.
3) Technological and commercial validation
Martin Murray, Investment Consultant at Dublin BIC, explains that it may be difficult to get funding with just an idea. If you’re at the very early stages of business development, start by going to your Local Enterprise Office (LEO) or Enterprise Ireland (EI). A small level of finance may be accessible to you there.
If you need a high level of investment, for example, seed level funding, you need to have a product or service with technological and commercial validation.
- Technological validation. This involves showing your product works and you have trailed it with customers who can vouch that it works.
- Commercial validation. This involves showing that you have spoken to customers who have committed or successfully purchased your product. You may already have revenue or growing revenues at this stage.
4) Startup/investor fit
When you’re researching the investment journey, it’s important to remember that business owners need to rigorously investigate the investor too.
Look out for: investor experience with Startups, investor experience with the industry, where the investor is in the funding cycle and their relevance to/positioning in an investor portfolio. Has the investor invested before? Do they intend to be in on the next round of funding too?
Ultimately, is this someone you want to do business with?
What goes into an Investor Pitch Deck?
1) Company purpose
Define the business in a single, declarative sentence. Make a simple, compelling, impactful and memorable statement about what you do.
Describe the pain of the customer and outline how the customer addresses the issue today. It’s helpful if you view this from the perspective of the customer.
Demonstrate your company’s value proposition to make the customer’s life better. Provide a high-level explanation that refers to the customer’s point of view.
4) Timing – why now?
Define recent trends that make your solution possible. Describe why now is the time to invest.
5) Market size
Profile the customer you cater to. Provide credible assumptions with numbers to back it up.
List competitors and competitive advantages. Show what barriers you need to overcome even if you have no direct competitors.
This can be the product line-up and/or development process. Investors may not be interested in the specific technology you’re developing, so ensure that you concentrate on the dimensions of your product that gives you competitive advantage and scalability.
8) Business model
This can include the revenue model, pricing model, sales & distribution model and more. Consider using the Lean Canvas Model here – a one-page business plan used to figure out your business and come up with a compelling narrative.
Who are the founders and management? Do you have a Board of Directors or Board of Advisors worth showcasing? Is there a team that has all the expertise to execute on everything you’re saying?
A high-level summary of the next 3-5 years. This includes the profit and loss, balance sheet, cash flow summary and cap table.
Key takeaways from Martin Murray, Investment Consultant at Dublin BIC
Check out big company pitch decks online
Companies like Airbnb, Facebook and Tinder have pitch decks online. One thing they have in common is that they have a look and feel that is appropriate to their business.
Have more than one competitive advantage
A good tip is to use the Lean Business Model and ensure that you have at least one competitive advantage in each of the sections. They can be razor-thin advantages, but apparent throughout the whole business model.
Start with Enterprise Ireland’s Competitive Start Fund (CSF)
The purpose of this fund is to accelerate the growth of Startup companies that have the capacity to succeed in global markets.
Visit the Dublin BIC and HBAN website
Getting investor ready can be a daunting and nerve-wracking process. But you don’t need to go through it alone.
Start by visiting the Dublin BIC website and investigate one of their pillar programmes. They can help you with business planning and modelling and when you’re ready, they can help you access finance through either private and/or public funding opportunities.
Want to get in touch?
You can also talk to your accountant about preparing financials for potential investors. If you don’t have an accountant yet, talk to our Client Services Team about our services. We’re here to help.