Equity finance is where you sell shares in your company in return for the money you need to grow your business. It's often called 'Investment'.
Equity investment can come from individuals with money, who you might hear called ‘angels’ or ‘high net worth individuals’ (HNWIs). It can also come from organisations who manage money on behalf of others in a fund, like venture capital firms (VCs), corporate venturing arms, or private equity firms (PE). Equity crowdfunding platforms are often used to bring together lots of investors on a deal.
Investors put their money into your company now, hoping you’ll grow the business over time, sell it for vast amounts of money, and they will at that point get an incredible return on their investment.
Not necessarily!
You may grow your business without it, or you might get funding from other sources like loans, grants, or R&D tax credits.
But ask yourself these questions:
If you’re an ambitious female founder that wants to scale your business and achieve your dreams, chances are you might need to get your hands on some rocket fuel to help you get there.
82% of businesses fail because of lack of funding. Don’t let lack of funding be the reason you don’t make it.
We don't believe it should be harder for you to raise investment, just because you're female. We know you have the inner strength and the capabilities to get there, and our goal is to level the playing field and help you achieve your dreams.
It's true that a lot less funding goes to start-ups run by female founders. In the UK, only 11.4% of venture funding goes to women led businesses.
Part of the issue is that less female founders enter the investment arena because we don't know how to navigate it, or we might feel nervous about whether we can be successful.
We want to open your eyes to the possibilities that investment in your business can bring, demystify the fundraising process, and empower you with the strategy, skills and support you need for success.
There are some challenges that many female founders experience when raising investment.
But we can push through these challenges together! Our mission at Enter The Arena is to give you the very best chance of a successful fundraise.
We'll show you how to smash through any limiting beliefs you might hold, and deal with fear of failure, if these things are holding you back.
We'll walk you step-by-step through your fundraise so you can run your campaign alongside growing your business and managing family life.
We'll show you how to build a powerful network of investors, and how to speak their language.
And we'll help you understand how to identify and deal with any conscious or unconscious bias you encounter along the journey.
There's a lot involved in raising investment... from getting your business investment ready, preparing your business plan, forecasts and pitch deck, determining your fundraising strategy, raise amount and valuation, knowing how to reach out and attract the right investors, how to meet with them and negotiate your deal.
Only a small percentage of those seeking finance are successful. So it makes sense to give yourself the very best chance of success by getting the support you need.
That's not to say you can't raise investment by yourself. Maybe you can.
But the risk is it will take you a lot longer, take a lot more of your precious energy and resources, and you will make a lot of mistakes along the way.
We're here to help. We'll empower you to develop your fundraising skills to the highest level and give you all the support and guidance you need along the journey.
The most important thing is to decide and commit to your results and then take right action by learning the skill you need to make it a reality.
When you invest in yourself, you invest in your personal growth and development, and that is something that will never leave you. Nothing is bigger than you. You decide who you want to be and step into becoming it by getting out of your comfort zone and doing it.
A well-run fundraising campaign usually takes at least 3 months, and will typically take 6-9 months.
However, if you don't know what you're doing, it can easily take you 12-18 months or longer to get your raise done. Or worst case, you'll spend all that time trying to raise investment and not succeed at all. That's not the outcome we want for you.
We're here to help.
Don’t leave it to the point when you’re out of cash. This puts you in a much weaker position because you’ll be at the point of desperation. We recommend you always aim to have at least 6-months’ worth of money in the bank.
The sooner you get started with getting your business ready for investment and preparing for your fundraising campaign, the better.
Fundraising is going to take hard work and dedication from you, that's for sure.
You may hear stories from other founders about how fundraising felt like a full-time job, and how they had to put everything else on hold whilst they were raising investment.
We don't believe that's necessary. With the right approach, and the right support, you can raise investment and continue running your business... and also have a life!
We design our fundraising programmes to take you step-by-step through the process, so you can raise the money you need without it sucking up all of your time. We know how busy you are, so the support we provide is flexible, with remote coaching sessions and online training resources that work around your schedule.
Prioritise the work involved if you want to achieve success. We recommend putting aside a couple of hours a day to work on your fundraising campaign, which you can flex up and down depending on what else you have to manage.
Fundraising can feel like a very emotional process, especially if your business' success or failure depends on the outcome.
As female founders ourselves, we absolutely understand the rollercoaster of building a start-up and securing finance for growth.
Our fundraising programmes not only guide you on the optimal way to raise investment but also help you build the resilience you need to manage the ups and down. We'll help you develop a bullet proof mindset and be by your side throughout your journey with all the support you'll need.
Investors want to know you have a great idea and a great team. You’ve got to be proving it, and you’ve got to have the potential to scale and exit.
Here are 5 questions to ask yourself:
1) Are you solving a real and pressing problem for your customers?
2) Are you proving this by generating growing amounts of revenue?
3) Can you see how the business can be profitable?
4) Are you doing it better than anyone else in the market?
45) Is there a vast market out there for you to capture?
If you can answer yes to all of those, then your business could be a good fit for equity finance.
But there's a lot more to raising investment than having a great business!
Benchmark your current potential to raise investment and identify how to increase your chances of securing funding by taking our Female Founder Investability Scorecard ™
Some investors focus only on funding tech businesses. However, tech itself is a very broad definition. Many businesses these days have a large technical element to them, even if the products they sell aren't 'tech'.
Some investors prefer to zone in on specific non-tech sectors that they have expertise in, where they feel they can add most value.
There are also many investors who look more broadly at investment opportunities, building a portfolio of start-ups across many vertical industries. They will look at the potential for return on investment over the medium to long term, irrespective of the business.
The most important thing is finding investors that are the right fit for you and your business. We will guide you on how to do that, and if you're on our Fundraising Masters programme, we'll connect you to the right investors where appropriate too.
Investors often prefer to back businesses they know and understand; that they can relate to.
85% of angel investors, and 95% of Venture Capital partners, are men. So if you have a product or a service which serves a female market, for example in the fertility or menopause sector, or in the female fashion and beauty industry, does that mean that male investors won't be interested?
Absolutely not! But you need to know how to speak the language of investors. How to frame the opportunity in a way that they will understand. If you're not able to do that, they will never get it.
We'll help you get that right.
99.9% of start-up businesses aren't profitable when they go out for investment.
It's very normal for investors to back founders when they are in pre-profit phase. That's because they know that you have high growth potential, and need funding to help you get there.
Investors will however look for signs that your business is generating traction and is also growing month on month.
If you want to get a better sense of whether your business itself is likely to interest investors, then we'd recommend booking a Discovery Session so we can make a full assessment for you and advise on what to do next.
Many successful start-up businesses are founded by a single person. As you grow, you will no doubt build a talented team around you.
There are some investors that are happy to back you at a really early stage, when it's just you, and others that prefer to get on board when you're further along and have brought in others with the skills and experience to support you on your growth journey.
So having a co-founder isn't the be-all-and-end-all!
As always, the question is finding the right investors for the stage that you're at. We'll help you get that right.
If you're a solo-founder, in our experience, it's even more important to get the right support to help you on your fundraising endeavours. When you don't have a business partner to bounce off, navigating strategic and tactical challenges, along with the emotional side of fundraising, can be really tough on your own.
There are many types of investors:
Friends and Family - people you know personally
Start-up accelerators - These are programmes to support founders on their growth, which sometimes come with investment either on acceptance onto the programme, on 'graduation' or when the business meets certain criteria. They usually run from a few months to a year.
Angels - High Net Worth Individuals (HNWIs), who may be professional investors, or those who invest as a sideline. They are often entrepreneurs who've exited their own businesses and want to reinvest in the start-up ecosystem, people who have lots of experience in the start-up world, and are often those with successful corporate careers.
Angels Syndicates - This is a group of individuals that come together to invest in a business.
Venture Capital firms (VCs) - These are organizations who have a fund of money they have raised to invest in start-ups; that money coming from many sources including private wealthy individuals, pension funds, family offices, insurance comapnies, and other corporates.
Corporate Venture - Investment that comes from a single organisation, who may invest in start-ups because they see strategic value in the deal.
Family Offices - These are firms that manage the wealth of a single ultra high-net-worth family
Crowdfunding - Crowdfunding platforms enable you to promote your business and investment opportunity to a wide audience who can then invest as little as £10 into your business. This allows you to bring together hundreds of smaller investors into your investment round, and all the other investor types listed above can also take part if they want to.
There are pros and cons to working with each type of investor, and the right path for you will depend on your long-term goals, potential for growth, current stage of business, industry and several other factors.
Your fundraising strategy is a very personal thing, there is no right or wrong. We'll guide you through deciding which route to take.
Absolutely! Just check out our Fundraising Stories podcast to see many inspirational examples of women who've raised whilst pregnant.
Embarking on a fundraising campaign whilst your pregnant has the potential to add stress into your life, on top of feeling tired, hormonal and all the other challenges you naturally go through when carrying a baby. And of course, timing wise, you might even find yourself with a new born whilst you're closing your round.
At this time in your life, it's even more important to get the right support so you raise the finance you need in the right way, without undue stress. We can also support you in handling investor conversations around your pregnancy and how you'll manage the business and your family.
You don't need a fully produced business plan to raise investment. Nobody wants to plough through a 40 page document to assess the opportunity.
However, you need to capture the key things that investors want to know about your business:
1. Vision - what your personal vision for what you want to achieve, and why?
2. Problem - how large and acute is the problem you're trying to solve?
3. Competitive landscape - how are people trying to solve this problem right now, and why isn't that good enough?
4. Solution - how does your offering solve the problem, and why is it the best way?
5. Opportunity - is this an identifiable, large and growing market?
6. Competitive Advantage - what's your unique selling proposition and how will you maintain this?
7. Customers - who specifically are your early adopters, and which customers will then follow?
8. Business Model - how will you make money and what's the lifetime value of a customer?
9. Route To Market - how will you reach your customer, and what are the costs and timescales involved?
10. Traction - what proof do you already have of product to market fit?
11. Team - does your core and extended team have the right skills, experience and drive to take this idea forward?
12. The Promise - what are you going to do next and what results do you expect to deliver?
13. The Ask - what are you looking for from investors?
All this sounds simple, but there's a lot that goes into each of these areas, and you've got to know exactly how investors are going to interrogate your plan, and how they might perceive the opportunity.
We'll work with you to nail your plan, make sure it's as robust as possible, with the detail that investors need to see.
Once that's done, we'll support you in communicating all this in your Pitch Deck and Financial Forecasts, which are the two key documents that will support your discussions with investors.
There are pitch decks…. and there are pitch decks!
We don't believe in using templates. How will that make you stand out from the crowd? You must make your pitch deck unique to you. And if the narrative that you’re communicating isn’t powerful enough, the deck will be irrelevant, anyway.
First impressions matter. You have one shot at communicating with an investor and you don’t want to mess it up. You must get trusted feedback on your deck before you show it to potential investors. It has to be beyond compelling: the right content, a strong narrative, and outstanding presentation.
We'll show you how to create a winning pitch deck that will attract and convert the right investors for you. And if you need help in producing it, we can support you with that too.
If you want to raise investment, you’re going to need to get your head around the finance side of things.
The financials of your business are the machine room that shows how well you’ve been doing, what’s going on right now, and where you’re heading. It’s critical you have a handle on this.
You need to develop enough financial literacy to hold your own in a conversation with an investor, otherwise it’s unlikely they’re going to trust you with their money.
You don’t just need to get good at the numbers side of things for the sake of raising investment. Financials are an aspect of business that any entrepreneurial leader worth her salt should want to get to grips with and ideally master.
Our programmes will empower you to get a strong handle on your financials, build a financial forecast that will support you in raising investment, and be able to talk through your numbers with confidence
Determining the valuation of your business can feel quite challenging.
It's a balance between a valuation that's both attractive for investors, and for you.
Data shows that female led businesses achieve valuations up to 60% lower than their male counterparts. That's not the result that we want for you. If your valuation is too low, you might end up selling more equity than you need to at an early stage, which can massively reduce the potential you can make down the line when your company is successful.
Ultimately, your business is worth what someone is prepared to pay for it
The most important factor in determining your valuation is what you and your investors believe your business will be worth in the future, and whether you can give them a great return on investment.
What will influence your valuation most are:
There will also be work to do in understanding the typical market valuations for a business like yours, so you have a sense for what the market will bear.
Our goal is to support you in achieving the right valuation for your business, so you can build long-term value. We design our programmes to help you do just that.
Many female founders worry they don't have a roladex of high net worth individuals or professional investors they can call on for investment.
In fact, most of the founders we work with have to start from scratch.
We'll show you how to build a powerful network, and if you're on our Fundraising Masters programme, we'll connect you to our network of investors too.
Remember, investors are people too, and they are looking for impressive start-ups to back, as much as you need their funding to grow your business.
But it can feel a bit intimidating, especially if you've never raised investment before. Investors will often have a lot more experience in putting together funding deals, and the last thing you want is to feel on the backfoot.
The key to feeling confident as you go out to speak to investors is partly to do with preparation. We'll support you in everything you need to get ready for and run your investment campaign. But confidence also comes from knowing how to build a 'fundraising mindset'. Our programmes include tools and techniques to shift your thinking and approach, help you build guts and tenacity, and get your confidence sky high.
Investors have the potential to add an enormous amount of value to your business, not only from a financial perspective but also in terms of skills, experience and connections.
But equally, there are many horror stories where founders have lept into bed with the wrong investor. An investor who's hindered not helped. Or worst-case scenario, ousted the founder from the very business they built.
If you've never raised investment before, it's hard to know how to separate the good eggs from the bad, or protect the interests of both you and your business.
We'll be by your side to show you exactly how to attract and secure commitment from investors who are a great fit for you, and how to structure and negotiate an investment deal that builds value for you in the long term.
As a founder, you ultimately carry the responsibility for your success, or for your failure.
You’re the one that’s built your business, put together your strategy for growth, and you must do the hard work in preparing your investment pitch, running your campaign, getting commitment from investors and implementing your growth plans.
What we do is help you get the results you deserve. We'll provide you with all the training, support and guidance you need to be successful on your growth journey and fundraise.
But ultimately your success will depend on you, your business, and the work you put in.
We're very selective about the clients we work with. If we don't believe you have a business that has the potential to raise investment, we'd rather be honest with you, and point you in another direction.
Over 50% of the founders we work with raise investment. We're very proud of that outcome. To put this in context, only 1% of those founders seeking finance in the market are successful. So we think our numbers speak for themselves.
The best place to start is by taking our Female Founder Investabiliy Scorecard ™.
This free, confidential test measures your potential to raise investment by analysing your performance across 5 key areas. Your unique score will reveal your personal strengths and weaknesses and deliver practical, actionable tips to improve your results and help you secure the funding you need.
Take the 10 min test now, and get started on your journey to raising investment!
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