A company seeking investors competes for the attention of people who receive dozens of proposals a month. The difference between being read and being discarded almost always lies in the preparation done before first contact.
Many owners approach investors as they would a bank: last year’s accounts and a request for an amount. Investors — funds, family offices, private investors — read differently. They do not only ask whether the company can repay; they ask what it will be worth in five years and how they will exit. Preparing the company for that reading decides whether the conversation moves forward.
1. A clear thesis
Investors first look for a short answer to three questions: what the company does and why it wins; what the money is for; and what changes because of it. “We want to grow” is discarded. “Open three sites in Spain, where we already have customers, doubling sales in four years” is read.
2. Numbers that withstand scrutiny
- History: three to five years of accounts, with a normalised and explained EBITDA.
- Plan: five-year projections with explicit, realistic assumptions and a downside case.
- Use of funds: where each euro goes, and when.
- Business KPIs: margins by product, customer acquisition and retention, capacity — whatever matters in the sector.
Experienced investors automatically discount over-optimistic plans. A prudent plan, delivered, is worth more than a brilliant one that misses.
3. Documentation
- Teaser: one or two pages to spark interest, without sensitive information.
- Presentation: fifteen to twenty pages covering thesis, market, team, numbers and the proposed deal.
- Financial model: in a spreadsheet, so the investor can test their own assumptions.
- Data room: ready before it is requested.
4. Know your value and what you will give up
Before speaking to investors, the company should have a realistic view of its pre-money value and therefore of the stake it is willing to sell, as well as the rights it will grant: board seat, reserved matters, exit preferences. Unrealistic expectations end conversations; no expectations at all let the investor set the price.
5. Choose the right investor
Not all money is equal. A private equity fund brings discipline and experience but wants an exit in four to seven years. A family office may have a longer horizon and lighter demands. A strategic investor brings customers and know-how but may have its own agenda. The choice should start with what the company needs beyond capital.
6. Run the process
A capital raise usually takes four to nine months and consumes management time. Approaching investors in parallel, to a clear timetable, creates competition and shortens the process; approaching them one at a time weakens the negotiating position.
GestInvest prepares and runs capital raises for mid-sized companies, with access to investors across Europe, the Gulf and Brazil. Read more about capital and financing.
Frequently asked questions
How much should we raise?
Enough to execute the plan to the next meaningful milestone, with a safety margin. Raising too much dilutes unnecessarily; too little forces an early return to market.
Will the investor want to run the company?
A minority investor wants influence over major decisions, not day-to-day management. The limits are set in the shareholders’ agreement.
Do we need an adviser?
It is not mandatory, but an adviser brings investor access, prepares the documentation, helps set the value and lets management keep running the business.
