Plain sailing
Speed to market has been crucial for Vesper Marine
Wednesday, July 14 2010 || Starting out || BY Caitlin Sykes
Mark Robotham, general manager of the Escalator Investment Ready Service, outlines five points that identify an investment-ready company, with reference to Vesper Marine’s journey:
Realistic valuation expectation
Most entrepreneurs are out of touch with market valuations and the process of doing a clean deal. They forget to correctly account for the huge opportunity cost in closing a capital raising round. They attack the investment market with an overinflated assessment of their company’s worth only to become another entrepreneur claiming there are no angel investors in New Zealand.
Deal making is a three stage game
P&L forecasts; valuation model(s); and negotiate terms. Vesper wisely sacrificed a little on valuation for a clean deal (with few terms). It appointed new directors who can add value, and has investors capable of leading the charge if future rounds of capital are required.
Clear pitch
People need to understand what the company does and how it makes money. WatchMate is an electronic product with a clear product margin, supply chain and business model, with other strategic options open.
Sales momentum
Real customers mean real dollars coming in on a regular basis. Once you have nameable clients and sales, your chances of gaining investment skyrocket.
Clear beachhead market
This is preferably export with multiple revenue streams. Vesper has already begun exporting and had some experience with both leisure and commercial applications.
Coachable founder
Having worked with Jeff at Escalator I saw how he was open to seeing things differently and adapting.
