What should scaling companies look for when seeking investment?

The importance of finding the right investor was one of the main themes discussed at last month’s inspiring Scale-up Masterclass organised by Silicon Valley Comes to the UK. We take a look at what this means for growing technology businesses in our round-up.

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To find the right investor you should consider the best fit for you personally as the entrepreneur, your business and its stage of growth. There are various legal and technical details that investors, be it Angels, VCs or private equity firms will include in their investment offering.

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While those details are important to get advice on and thoroughly review, finding the right personal fit for you and your business is crucial. 

Before you go out to market in search of investment, think about the following areas:

What stage is your business at?

Is it Angel/ Seed or Series A funding that you are looking for? There are different investors for each level of investment and it’s important to find those who focus on your area. 

What are you looking for in an investor?

Do you want someone who is extremely hands-on and plays an essential part in scaling the business, or someone who simply backs the management team and is there for ad-hoc advice and regular reporting? Again, there are different investors with different characteristics and styles, so be mindful of this and focus on finding the right match between your style, what you are looking for, and what their style of involvement is. Choosing to partner with an investor who you feel you can always approach means that even if you face challenges, you would be able to have a sensible conversation with them and resolve any issues without consternation. This way you can avoid falling back to worst-case legal wording in the formal documentation.

What is your niche?

There are funds focused on deeptech, proptech, B2C, backing female leaders, the list goes on. If you want an investor with specific knowledge and experience, do your research and approach those with the relevant expertise. It also goes without saying that a B2B investor will invest into a B2C business, so knowing the investor can save wasted time.

Investors will be a core part of your business for their entire investment horizon, typically between 3-5 years, but can sometimes be up to 10 years. Therefore finding the right fit of investor for you and your business is crucial to ensure success and growth in your scale-up journey.

For more information about Silicon Valley investment in the UK, click here for our partner Silicon Valley comes to the UK (SVC2UK) who bring together some of the best UK scale-ups with mentors and investors from the US.

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