Guest Post: Funding Tips from Scale FinanceMarch 11, 2015 10:08 AM
This guest post comes to you from Gary Hayes, COO and Managing Director of Scale Finance, a big supporter of the HQ Raleigh community!
Are you an early stage technology company thinking about raising growth capital? We work with many entrepreneurs just like you. Here are some helpful tips that you should keep top of mind as you navigate the minefields of the capital raising process:
- Every successful entrepreneur must have a good grasp of their numbers. Understanding your “burn rate” and your “cash runway” are just simple examples of this. You must know how much you are burning every month and when you will run out of cash.
- Sloppy or poor record keeping can be a turn off to investors as it can affect your credibility with them. If you can’t take care of the easy stuff why should I trust my capital with you?
- Understand who your customer is and what the sales cycle is. What does it take to close a customer? This will evolve overtime, but understanding the dynamics that are going on here are critical. The CEO in the early days must be the Chief Sale Person as well.
- If you sell a product that has direct costs associated with it you need to have a good handle on those costs and how they can be reduced overtime with scale. Being able to demonstrate improving gross margins with a credible story will create greater interest with investors.
- Understanding your customers and suppliers and how you can maximize cash flow by negotiating favorable terms is critical and if done right can reduce some of the need to bring in outside capital.
- Raising capital is a time consuming process and will be a huge distraction. The CEO needs to be as efficient as possible as you can’t take your “eye off the ball” relative to running the business while at the same time meeting with investors.
Scale Finance works with HQ members to help you navigate this process. Learn more and ask questions at Gary's office hours on March 17 from 10AM to noon.
Scale Finance provides fractional based accounting services to early stage technology companies across the southeast as well as transaction advisory support to companies raising growth capital. Stay tuned for our new and improved Scale Back Office Solutions that can provide you with dedicated accounting manager support at an affordable fixed monthly cost.
Scale Finance is your long term partner for affordable integrated finance solutions that help you scale. If you want to find out more please contact Gary Hayes at firstname.lastname@example.org.