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Gaining investor

How to win investor

Preparation of the strategy - description of activity and development plan

The first task of Companies in the way of raising capital, is the answer to the question whether the owners of companies are ready to welcome a new shareholder / shareholders and dividing rights and responsibilities. If the answer is positive then you can join in the preparation of documentation. Beginning to produce documentation is to set goals and how to achieve them - a good start to prepare the strategy. Document Strategy Companies should include: Business objectives, a description of the functioning and making money, the description of products or services, a description of the sector, competition, the way to achieve the objectives, the necessary expenditure of forces and means, precisely determine the potential of companies, and market conditions, capital needs - how much money the need for the implementation of the strategy, outlook, overview and management experience. The proposal for the investor should be well prepared.

 

selecting a consultant

In preparing the strategy, you can use the services of a consultant, but this administration or owners should identify with the Strategy. The strategy should be considered by the Management Company as their own. Consultant correct individual activities and adapt them to market practice. The task of the consultant is to cause the Company to understand the main principles of the process of raising money, preparing documentation in accordance with market practice.
How to choose a consultant? It is appropriate selection of a consultant who has experience in handling similar cases and achievements in the selection of investors and obtaining financing. Consultant may be a specialized company but also an accountant, a financier, a fellow businessman. The money paid for the Consultant are disproportionately lower than the benefits received from investors.

 

Checking competitiveness strategy compared with companies competitors.

Development of the company described in the strategy should be attractive enough to attract potential investors. Traditionally investors expect companies to develop faster than the sector in which it operates, the management was competent and enterprising enough to be able to solve common problems. The planned return on capital should be more attractive than achieved by competitors.

 

Choosing among investors Funds, Business Angels and individual investors.

Investors in the financial market can be divided into several groups:
Funds: Private Equity and Venture Capital, Asset Management, the funds industry,
Business Angels - brokerage houses, the group of investors, the company with a separate investment fund, individuals.
Intermediaries such as: Brokerage and Financial Advisors
private investors
Each of these groups has specific goals and preferences. Before choosing investors should check whether the investment profile agrees with their investment policy, the amount of investment suits their criteria and no conflict of interest, eg. Finance competitors.
The most important aspect of "walking through the market in order to raise money" is to verify the valuation of the business. There are a number of business valuation methods, the most widely used and at the same time reflects the current situation is the relative valuation to other similar companies or public companies. This method now reflects how much you can earn money without counting future income on paper. Conversations with a number of investors allow the valuation presented in the light of market requirements, which can often mean that adapt to the current market valuation.
The second thing is to become familiar with the expectations and preferences of investors. At the meeting we will find out what are the priorities of the investor, which draws attention to and what businesses are looking for. Even if you decide to cooperate with the investor - it made contact, which will be able to renew your opportunity.

 

Presentation of the project to investors

You should carefully prepare for discussions with investors. Investors have very a lot of meetings with companies and the flight will pick up important issues. If there is doubt or conflict of interest on the part of companies you should report it. Understatement or omission of important information will be treated as an attempt to mislead investors and the second meeting will not. The shadow cast on the credibility of the company immediately discredits it.
If investors will be interested in it further questions will be submitted for additional information. Then comes the time to meet with representatives of the fund management company, the project is pre-approved for financing and starts over it work together.

 

Investors examine the company - due diligence

At this stage, the investor carries out an examination of the company (called due diligence), including business analysis, financial audit and legal, organizational analysis. It requires a lot of information. In the process of due diligence involved the management of the Company.

 

 

Negotiations with investors

If the investor decides that the company can invest the money, we go to the next stage - negotiations in which the investor companies and the authorities establish the conditions for investment. Regards, in particular determine the parties, their rights and responsibilities, representation in the leadership of the Company, the management remuneration principles and to determine the final price at which the investor acquires a certain part / shares in the Company. Note - The company must be a capital company. In fact, the outline of the main conditions and the expected price of the transaction, are included in the investment agreement between the parties at the stage of due diligence.

 

The signing of the investment agreement

If the negotiations and due diligence will be completed successfully it comes time to sign it and goes to the company needed capital.
In some cases, the entry takes the form of a simple capital increase of the share capital in the Company. However, there can be used other ways to enter the capital. One of the most popular is the creation of a new company and bringing to it in kind of a business or an organized part of the entrepreneur on the one hand, and cash by an investor on the other side.

 

Acquiring money and realization of investments

After the signing of the investment agreement following the implementation of the strategy and the investment it is in the form of money transfer in accordance with the investment agreement.
Presented the investment process - from the start until the transfer of money to the account of the company - usually takes several months.
Active attitude of the board Companies and efficient cooperation with the investor accelerates this process.
The success of the process of finding an investor to a large extent depends on:
• Quality materials investment
• Preparation of the entrepreneur and his understanding of the whole process,
• How to implement this process,
• Rapid response to investor queries,
• Professional counselors.

KP Dragon Index

# Company Code Sector shares Outstanding Loc. FX price Market capitalization Weight free float free float
Weight (%)
City ($) (Local m) ($ M) (%) ($ M)
1 Astarta Holding AST PW Food & Agriculture (Sugar) 25,000,000 PLN 454.0 17.83 1,612 445.6 6.68% 36.21% 161.4 7.43%
2 Centrenergo CEEN Utilities (Electricity Generation) 369,407,108 UAH 11.02 0.43 4,070 159.8 2.39% 21.70% 34.68 1.60%
3 DUPD DUPD LN Construction & Real Estate (Development) 109,361,515 GBP 5.34 0.21 17.77 22.94 0.34% 53.10% 12.18 0.56%
4 Ferrexpo FXPO LN Metals & Mining (Iron Ore) 588,624,142 GBP 91.63 3.60 1,640 2,118 31.73% 25.90% 548.4 25.25%
5 Industrial Milk Company IMC PM Food & Agriculture (Crop growing) 31,300,000 PLN 71.95 2.82 319.9 88.42 1.32% 31.30% 27.67 1.27%
6 JKX Oil & Gas JKX LN Oil & Gas 171,723,145 GBP 4.44 0.17 23.18 29.92 0.45% 22.35% 6.69 0.31%
7 kernel Holding KER PW Food & Agriculture (sunflower oil) 81,941,230 PLN 434.4 17.06 5,057 1,398 20.94% 61.87% 864.7 39.80%
8 MHP MHPC LI Food & Agriculture (Poultry) 106,781,794 USD 263.6 10.35 1,105 1,105 16.56% 36.60% 404.5 18.62%
9 Motor Sich MSICH Manufacturing (Aircraft engines) 2,077,990 UAH 2,526 99.18 5,249 206.1 3.09% 19.06% 39.28 1.81%
10 Ovostar Union OVO PW Food & Agriculture (Eggs) 6,000,000 PLN 753.3 29.58 642.0 177.5 2.66% 31.80% 56.43 2.60%
11 Raiffeisen Bank Aval Bavla Financials (Banking) 61,495,162,580 UAH 0.27 0.01 16,757 657.9 9.86% 1.70% 11.18 0.51%
12 Ukrnafta UNAF Oil & Gas 54,228,510 UAH 124.5 4.89 6,751 265.1 3.97% 2.00% 5.30 0.24%
  Total or Average             6,674 100% 32.55% 2,172 100%

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