Seven in ten (70%) businesses that have attempted to raise capital have failed at least once, according to the independent investment service firm, Smith & Williamson.
The reasons behind this are varied.
1. Week Management Teams
Half of respondents (45%) among 501 scale-up companies and more than 500 non-scale-up SMEs in 2018 said that their management team wasn’t strong enough.
2. Fragile Business Models
One in three (27%) said their business model wasn’t good enough.
3. Bad Finances
One in five (22%) admitted to not having a good enough handle on their finances.
What the expert says
John Morris, Partner at Smith & Williamson, said: “Securing investment into a business shouldn’t be a blind leap of faith. Preparation is key. To be investor-ready, businesses must ask themselves difficult questions and demonstrate they have a strong management team in place, something that is crucial for investors. Equally important is the level of ambition displayed and a degree of certainty on future plans and objectives.
“Even with these measures in place, securing investment is never easy. Getting high-quality and relevant advice right from the outset can significantly improve the chances of businesses securing funding. This mind-set will see the number of firms successfully raise external finance increase and, importantly, reduce the number of those experiencing funding regret.”
Find out more here.