Bridget Reynolds’ Post

"𝐈 𝐨𝐯𝐞𝐫𝐩𝐚𝐢𝐝 £2𝐌. 𝐎𝐮𝐭𝐝𝐚𝐭𝐞𝐝 𝐯𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐬𝐭 𝐦𝐞 𝐝𝐞𝐚𝐫𝐥𝐲. 𝐍𝐞𝐯𝐞𝐫 𝐚𝐠𝐚𝐢𝐧." Sadly this happened to one of our clients, who overpaid by £2M for a company that couldn’t deliver on its promises. Imagine investing in a promising tech startup, convinced by their impressive pitch and glowing projections. You go ahead with the deal based on an outdated valuation. Six months later, the market shifts, and the startup's growth stalls. The outdated valuation didn’t reflect current market realities or potential risks. By the time the issues became apparent, the money was spent, and the return on investment wasn’t forthcoming. This painful lesson underscores the importance of accurate, current valuations. They provide a realistic picture of a business’s worth and help investors make informed decisions. At bizval, we interrogate every aspect of a business’s financials, market conditions, and potential risks to safeguard you from overpaying and ensure your investment is sound. The takeaway? Always base your investments on thorough, up-to-date, and trusted valuations. It’s not just about avoiding losses—it’s about making smart, strategic choices. Stay informed. Know your value. Make wise investments. P.S. Update: Our coaching at Outcomes Business Group UK has empowered the new owner to revitalise the business and set it on a path to success. Together, we have developed efficient new routes to market, built strong trust within the marketplace, and fine-tuned the services offered. With a dedicated and powerful team executing flawlessly, customers are now delighted and wholeheartedly supportive of the business. #BusinessValuation #SmartInvesting #Entrepreneurship #StrategicPlanning #BusinessGrowth

Start up businesses have a 20% failure rate until the end of the 1st year, 30% until the end of the 2nd year, 50% until the end of the 5th year, and 70% failure rate until the end of the 10th year per the Bureau of Labor. The number one reason why? Running out of cash. Running out of cash is due to a combination of reasons, but here are the top 3: 1) Poor financial planning- Most likely an accurate forecast was not prepared, or it was but was built off inaccurate assumptions and was underestimating expenses (or overstating revenue), failing to allow the business to create an adequate emergency fund. Cash forecasting isn't just for startups, ALL businesses should have one of these and reviewed often. 2) Failure to secure financing in time- I always tell my clients to get that Line of Credit now, because when you need it, you wont be able to get it. Failing to get as much funding as your hoped for or to have availability to pull funds from a line will have you running out of cash in no time. 3) Excessive spending- Most business owners feel they are in competition with others and feel the need to grow quick, fast. This tends to lead to excessive spending in a business that outpace the revenue coming in. This is why it is important to have a trusted advisor on your team to predict for those rainy days and be more proactive than reactive. It is easier to predict the struggle that will be coming up and pivot, than to come up with solutions once you are already struggling with your hands and out of cash. #accountant #businessowner #ceo #entreprenuer #smallbusinessowner #startups #cfo #cashforecast #growth #scale

𝐑𝐚𝐢𝐬𝐢𝐧𝐠 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐆𝐮𝐢𝐝𝐞 𝐟𝐨𝐫 𝐒𝐭𝐚𝐫𝐭𝐮𝐩𝐬💰 Startups, despite being full of ideas and ambitions, still struggle to secure funding. They face challenges while pitching for funds and make mistakes along the way. These tips can help entrepreneurs in successfully raising capital 👇🏻 1. Clarity on business model: Vital for startups, it outlines how your company creates, delivers, and earns value, including target market, revenue sources, costs, and partnerships. It helps in understanding the market position, make informed decisions, and communicate effectively. Investors value clear models with numbers and projections, indicating market understanding and profit potential. 2. Tailor The Pitch to Your Audience: Every investor likes different things. When you talk to them, present your pitch in a manner they would find attractive. It's like speaking their language. 3. Build a Strong Financial Narrative: Investors want more than just a cool idea. They like to see a strong money plan. Your idea should talk about the current money situation, future plans, and how they'll make a profit. Working with financial experts, like Chartered Accountants, can help make this better. 4. Total Addressable Market (TAM): Total market demand is essential for startups to gauge the potential size of their market and inform business strategies. Understanding TAM helps in identifying opportunities, allocating resources effectively, and positioning for success. 5. Diversify Funding Sources: Smart entrepreneurs don't depend on just one source for money. Getting money from different places is a safer alternative. It helps handle risks better and make startups more flexible in the changing economy. 6. Transparency and Due Diligence: Investors like it when startups are open and honest. Being clear about your business, finances, and growth plans makes them trust you more. So, always be ready to give clear and accurate info. 7. Plan for the Long Haul: Fundraising isn't just for current needs; it's a strategy for the future. Entrepreneurs should think long term, understanding that today's funding will fuel ongoing growth and success in the coming years. In the evolving landscape of funding, follow these tips to achieve positive results. And get your finances sorted with financial consulting/ CA/ virtual CFO or any of your trusted help.💼 #CASwapnilbansal #Mastrics #funding #raisingcapital #entrepreneur #founder #entrepreneurship #startup #business #startupguide #startuptips #finance #finances #financing #CA #CFO #financialassistance #virtualCFO

The most common request I get from inexperienced founders is help in raising capital. They assume once the cheque is in the bank then success is at hand. Far from it. It's not pitching to an investor and banking the money. The investor's objective An investor is well aware of the risks involved with a startup. A significant amount of capital is required before a product becomes commercially viable. As such, the investor has two objectives. Minimise risk and limit investment. In other words, to squeeze maximum returns without losing money. What investors want from the founder Investors are looking for prudence. They are interested in efficient utilisation of their funds and expect a return on every dollar invested. It's why VCs expect founders to pay themselves a low salary. Having a passion for your business is fine on the proviso it's grounded in pragmatism. What investors want to see Whether an investor will have any involvement in your startup differs on a case-by-case basis. However, they will appreciate transparency. Founders who demonstrate they are adroitly deploying their capital, delivering reliably on projections and responsible financial behaviour generate credibility. It's about financial capability An experienced founder executes their plan, anticipates funding requirements, and builds relationships with investors. This establishes credibility which the founder banks for the next capital raise. To meet this requires building up the financial capabilities of the business. A learning inexperienced founders should heed. +++++ P.S. Follow me for daily insights on finance, entrepreneurship, SaaS, leadership, and random thoughts #finance #financematters #founder #saas #entrepreneurship #startups #capitalraise #financialcapability #funding

Pre-seed 💴 how do you value your business? 👉 You might take an analytical approach, For example ▪ Forecast £50m in revenue in year 5. ▪ Apply revenue multiple (say 5x) ▪ That gives £250m “Exit” value ▪ Assume investors want 100x multiple for their risk, ▪ And you’ll get a valuation of £2.5m today Mathematically, this approach seems sound. 🚨 But realistically, what are the odds of meeting your forecast? 👉 What about the market benchmark? ▪ Look for comparable startups  ▪ How much did they raise? ▪ What percentage of equity did they offer? Use these as a benchmark for negotiation. Carta has some good data on this. Note: It’s US data, so you’ll need to halve the amount. But most startups raised their pre-seeds from friends and families.  🚨It can be awkward to negotiate with them. They just WANT to give you the money. 🙂 👉 Then consider SAFE, CLN, and ASA. ▪ These instruments convert into shares in a priced round later. ▪ For example, when you raise Series Seed or Series A from a VC ▪ Your friends and families will get a discount of 20%-30% That being said, there’s a time and place for analytical tools. But remember this: the point of putting together a forecast model ✅ Ironically, it is never about the forecast. ✅ It is the logic of the assumptions that matter. After all, in life, few things are certain: Death, taxes, and startups missing their forecasts. ☠ 💰 📈 #startups #entrepreneurship #venturecapital

Outstanding post Ivan Hoo. It is amazing how many start-ups use few or no analytics in valuing their start-up during pre-seed funding. Or they say something like, "Look at X Company in this field. If we can just take away 3% of their business, we will be worth $50 million! It will be easy! Look at all these advantages we have!" A word about SAFEs (Simple Agreement for Future Equity). A number of these SAFEs end up not doing a formal valuation because the company never gets off the ground, doesn't ever manufacture anything or can't get any substantial sales. The start-up folds before they can do a formal valuation. So the SAFE ends up becoming a SAFN: Simple Agreement for Future Nothing.

Yes I will chime in on this one. Address these things to position yourself for a better valuation - First off, the whole beginning of the concept of funding began with providing capital to things we can touch and see in person. The struggle many startups have is they are asking for credit/funding for things that don't exist yet. Know why our economy does this and thrives on the concept of credit. Secondly, they are making predictions they do not have a crystal ball for. Like we have billion dollar projection on year 5. That may be very real, but consider, you have not even gotten to 10mm. Getting to 10mm is one thing, getting to 100mm is a whole other. You can't skip b to get to c from a. Thirdly, it is all about traction. And when you have none, wow business is expensive!! Bootstrapping a little bit longer, can save you and give you a better valuation. VCs and any investor you do not know well is very unlikely to put money into your company without any customers, existing investors or revenues. So raise from people you know. The only exception to this is people who play the same game as you e.g. I worked in real estate for 20 years, so approaching an investor who worked in the same area of real estate for 20-30 years as well is more likely a possibility especially if you do not know them. For example a Marine were to come to me, say hey I got an AI idea with no traction for the modern warfighter, I will be much more appeased to listen. If a civilian who was never in the military comes to me and says that, I will be more questionable. Lastly, there are valuation pre-money software companies like Eqvista - see link below I posted - to help you out and guide you along the lines of an appropriate valuation. These companies have softwares and consultants, many of them to advise you correctly, but your best bet is to just hire a fraction investor relations executive, likely someone with experience dealing with VCs/investors already, or someone who is a VC/investor. Valuations are like oil checks, you should have one done every 6 months or so, especially as a pre-seeder/seeder founder. #valuations #vcfunding #venturecapitalist https://lnkd.in/g2UJZ5Us

Seconding my friend Thomson Dawson view. (You can listen to our dialogue on this on this link https://lnkd.in/dpJTUs3J ) A part of it , is investors are getting wiser . I have been judging pitches for a few years . The type of questions used to be around acquisition and a ridiculous growth number off a small base which is wrong approach, zero customer segmentation and of course #branding not brand #strategy.... A more sound approach is zooming in on - product customer fit , cash flow, leadership which lack of these have proven to be the cause of the failing startup ecosystem and yes they became employees again . What I also observed is that not all that glitters is gold . fab idea , jazzy marketing, founders who are super stars on social media...but zero business fundamentals. I decided a year back never to take start-ups as clients no matter how much funding they got . Advice - take a business course first . #enterpreneurship #startups #growth

Not every opportunity is worth chasing. The wrong one can destroy your business’ momentum. Momentum is the initial growth needed to become a flywheel, making it easier to keep growing. Mess with it and you’ll have to start over again. Expanded in a new city without checking regulations? You can get fined up to $1 million per violation in the US. Acquired a new customer without checking the numbers? You might be servicing them at a major loss. The best opportunities are the ones with high impact and high feasibility. You already have the infrastructure in place. You have the expertise to service the client. But you just need the cash flow to fund it? This is where we come in to save the day. Many businesses come to us to secure their best deals. We fund them the cash needed to keep their momentum going. That’s why they call us Momentum Capital Funding. DM me “CAPITAL” if you’re building business momentum. Momentum Capital Funding, LLC - We provide the capital you need to keep growing, funding up to 90% of the total amount of your invoice. #startups #growth #strategy #business #entrepreneurship Data sourced from the US Bureau of Industry and Security.

Brilliant startups begin to fail because chasing money never ends.   Many of my clients are startup and early-stage entrepreneurs seeking better strategies to create and communicate their value to the investment community.   In the never-ending quest for capital, their energy and focus shifts from creating value for customers to getting funded by an investor. With investor’s money in hand, it’s like winning the lottery. But what happens after these newly minted entrepreneurs get funded?   They find themselves as employees again.   In service to their investor partners/masters.   Investors don’t invest in a founder’s dream. They invest in a business that has a sustainable profitable market. They want a return on their investment as quickly as possible.   The pressure is on to turn everything into money. Financial return rather than value creation starts to be the main driver of business strategy.   I see that trend changing.   More and more enlightened entrepreneurs and savvy investors are creating a purpose-driven business, creating new value rather than competing for the value created by others. They are beginning to realize that “shared values” attracts the right investment, the right team and ultimately higher value customers who represent their bigger future..   Their businesses are growing and prospering on the creative plane rather than the competitive one. #whitehotcenter #founders #privateequity #valuecreation #investmentcapital