Top ten tips for SMEs seeking equity investment

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There are more avenues than ever for smaller UK businesses to raise the capital they require to unlock potential and help accelerate growth. However, there are several important aspects that you should consider before proceeding to ensure your business is investment ready and that you achieve the best possible outcome. Alex Rothwell shares his top tips on how a business can make an impression with investors and raise equity finance.

Published: Jul 15, 2022
Focus: Insights

If you’re looking to raise money, there are currently more products and funding options than ever before. For a business owner this evolving market may prove daunting, therefore obtaining good advice to locate the right investor and ensure the business is investment ready is vital when seeking growth for your business.

1) Do your homework first

Before putting pen to paper on your business plan, it’s worthwhile doing some background research on your market and the opportunities it presents. You need to demonstrate that your business has the potential to make sales and generate cash. When analysing your market ask yourself

Is your market growing, is there continued potential for growth, and, if so, for how long and by how much?
How will your business achieve growth in that market?
What is the market size and how much you can sensibly secure?
Who are your competitors, and how are you going to compete?
What are your points of difference, and how can you exploit them?

2) First Impressions Count

A good business plan is key, putting your plans on paper serves two key purposes;

It challenges you to accurately evaluate the strengths and opportunities for your business, often helping you to self-assess areas for improvement and manage future plans.
It acts as a guide to your business for potential investors, representing the business in an accurate      and accessible manner.

It is important that a business plan is realistic and reflects the business’s history, current trading and growth strategy. Funders receive lots of plans which provide little understanding of what the business does and the true value it creates for its customers. It’s worthwhile asking a contact who is not involved in the business to read the report and offer their thoughts.

Before submitting a plan, make sure it has been proofread – we see many business plans with basic spelling errors and inconsistent formatting – remember the plan you send is our first contact with your company, and poor preparation of a business may suggest that the business and management team lack the professionalism required to succeed.

Financial Accounts and Forecasts matter

A prospective investor will also wish to see how your business has performed to date and how you forecast performance going forward, so your financials and forecasts need to demonstrate the same level of diligence and detail as the business plan.

Make sure your assumptions are realistic, and build in some contingency. If your business does not have a finance function or experience in accounts, employing an advisor can help ensure your forecasts will stand up to funder scrutiny.

4) Understand your options

Research the various SME funding options in the market, which vary depending on the needs of a business. There are a large number of Growth Hubs and Incubators in the North West region, which can provide help and advice for getting a company to the point of being investment ready and can also put you in touch with the sources of potential debt or equity funding suited to your business.

5) Understand your timescales

The time it takes to put various forms of finance in place can vary significantly. For instance, bank or mainstream funding usually takes a number of weeks to complete depending on the type of loan being provided, whereas equity funding can potentially take longer. It’s important to understand the timescales for your investor up front to ensure that it suits your requirements and that  the process goes as smoothly as possible.

6) Engage with advisors

Engaging with a business advisor may seem like an unnecessary extra cost to a growing SME business, but the benefits can ultimately save significant time and money in sourcing the best deal for your company. Remember, the time spent on researching and seeking funding is time not spent running your business, so any help and advice can be invaluable in the long run.

7) Maintain dialogue

Once engaged with a provider, make sure you keep in contact and inform them of your decisions. This will help them progress your application as quickly as possible. If you decide not to go ahead with any agreed funding, let the funder know as soon as possible – this may help any future applications should your circumstances or requirements change.

8) Be upfront with your business history

Every business is unique, though all come with both challenges and opportunities, and investors understand that. By being upfront with a funder about the business’s history and any issues faced, you are more likely to get a positive outcome. It is far better to talk through any issues faced by the business and lessons learned upfront, allowing the lender to consider those issues as part of their process.

9) Assess the whole investment offer

As well as the amount of investment available and the overall valuation of the business, there are other factors you should consider before deciding on a particular funding option/ provider, including future investment capabilities, board positions and any added value an investor can make to the business.

10) Make sure the investment works for your business

Getting the right investment package is crucial to any business looking to grow. Once you have received an offer from a funder, take a step back and ensure it works for your business. Could your business be better served with a higher or lower level of funding? Do the terms make sense for your business? Ultimately a well-structured investment should give your business the cash headroom to grow, but if you get it wrong, the business could fail to maximise its opportunities in the market, so it is a key decision for your business.


We recognise that entering into a new relationship with an investor can represent a significant milestone for any business. At Maven we aim to work collaboratively with each investee company, understanding their needs and helping them to achieve their potential, without taking control. Get in touch to find out how we can help your business.

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