The journey towards raising capital & the hunt for global unicorns

By: Moonis Kamil, Business Angel & entrepreneur

The journey towards raising capital is first and foremost about money. Both for the company searching and for those about to invest, it’s all about minimizing the risk & increasing the profit. That’s great! But for both the investor and the company searching for investments there a lot more to it. The considerations behind the investment, all the thoughts prior to it for both parties on the journey is often difficult to address, measure and weigh.

In “the good old days” in was purely capital that got all the focus. Meaning, who can bring the most money at the best possible currency rate. But in time it has expanded with another factor – “smart money”. Meaning, who can deliver more than just money? Such as, invest time, experience, management experience, board work, celebrity factor etc.

As a company searching for investment/capital you must know your needs beyond the capital you are searching for, and you must navigate in a large jungle, containing everything from private equity to large corporate financial and institutional investors. The jungle has so many roads towards capital:

We have the independent, professional private investors, Business Angel associations where “angels” invest either on their own or as a syndicate, all as either passive or active investments. We have the family owned funds, public growth funds, larger and small capital funds, and we have the less familiar “ROCK-STAR” investors. All successful entrepreneurs that can “Talk the talk & walk the walk” and bring an x-factor to the table.

Everyone invests with the purpose of obtaining the largest possible, multiple return. But occasionally there are investors with a higher purpose globally or internationally, or in popular terms ‘purpose driven investors. And some of those also have a passion for creating a humanitarian difference in the world.

Who is the right investors for your company depends a lot upon what your company needs besides the money.

What do the investors consider?

As a starting point you search for the next global unicorn. But in broad terms no investor knows for certain, how to create a global unicorn and what the certain signs are to ensure, that they have their hands on a company that could potentially become one. That is why as an investor you aim to have a wide variety of “greater” questions answered as a first step, for example:

  • With what purpose was the company started and what is the mission and vision of the company?
  • Is the companies value proposition large and at the same time validated based on the global mass market? (What difference does the company make in the world/canvas model)
  • Has the company proven its value proposition and in what markets?
  • Is the companies Proof of Concept fulfilled and in what degree of validation, if not – what does it take and what is the plan for POC?
  • When does the Company Break-Even?
  • When is the company ready for internationalization and how?
  • If the company succeeds, what value/meaning does it contribute to the industry/market/world/population?
  • Is my investment meant to cover an operative hole, or does my entire investment go towards creating growth? (it gives better ROI per 1 Dkr. invested in growth instead of 1 Dkr. invested in OPEX)
  • How difficult will it be for the company to scale globally compared to their competitors?
  • The team’s composition, the personalities behind it, own resources invested, the degree of ‘Taking a risk’ etc.
  • The drive and resilience of the team:

– What drives the members of the team?

– Why did they start their business?

– With what purpose?

– What is their ’craving’ and how much do they ’crave’ it?

– What are the members demons and can they handle internal disputes/differences in opinion/adversity etc.

  • The teams’ competence field (what do they need now, and what will they lack in the future)
  • What level of understanding their organizational development is present at the current management? (A startup management isn’t necessarily the best operational excellence management in a few years, and next time they scale professionally there might be a different management need)
  • The teams’ empirical foundation as individuals and as a team (experience/track record) to achieve success
  • When will the company be threatened, by what/whom, on what stages and in what markets?
  • What stage of investment is the company currently on (FFF, SEED, Series A..B.., IPO etc.)
  • When and how does the company get to the next stage and what will the financial rate be?
  • Can I/we bring the company to the next level med experience, network etc.?
  • Can this investment bring the company from its current investment level to the next, and is it clear how?
  • How many iterations does the company product/service lack before it is pitch perfect for the market and how much money does it take to get there? (Even though they say the product is ready, the experienced investor knows that product development is an ongoing task)
  • How realistic is the teams’ growth strategy for the company (Marketing and the sales plans proficiency and financing, the maturity of the company’s inner operating core as they grow, the need for management competences etc.)
  • How much time should the investor give to guidance, sparring and managing the business management?
  • What would a foreign VC say about the case and do we have any indications that this case can raise international capital as well?
  • Can the business model with its margins carry sustainable growth in the future?

All the bullits above are just some examples of the many questions an investor would want answered.

The right match is crucial

It is important to remember, that investors are humans and humans are different, at various stages in their life’s, driven by different things, and with different backgrounds, paradigms, purposes, visions, demons, ego’s, competences etc.

A bad match or a rejection does not necessarily mean, that there is something wrong with you or your company. It is just a bad match sometimes also on a human level. And the match on the human level is super important, so both parties in the investment search should consider that carefully and talk about it at an early stage.

It is important that the investor you end up finding, believes 100 % in the companies’ larger purpose, and best case can identify him/her self with the purpose and play an active role.

Majority as well as minority, each and every one has feelings invested in their company, and wishes in the best possible way to contribute, no matter how, when or with what ownership they entered the company. You succeed as a team and celebrate as a team. THERE IS NO ONE-MAN ARMY!


Kapitalrejsen & jagten på globale unicorns

Af: Moonis Kamil, Business Angel & iværksætter

Kapitalrejsen drejer sig først og fremmest om at skaffe penge. Både for virksomheden, som søger og for den/de der skal investere, drejer det sig om at minimere risiko og højne afkast. Det er jo alt sammen fint. Men der ligger så mange overvejelser og tanker bag, for begge rejsens parter, som mange gange er svært at italesætte, måle og veje.

I ”gamle” dage var det kort og godt 100% kapital man fokuserede på. Altså, hvem kan komme med flest penge til bedst mulig kurs. Med tid er begrebet blevet udvidet med ”smart money”. Altså, hvem kan levere mere end penge? At investere sin tid, erfaring, netværk, ledelse, bestyrelses arbejde, kendisfaktor osv.

Som kapitalsøgende skal man selvfølgelig også kende virksomhedens behov foruden kapitalen der søges og kunne navigere i en større jungle, indeholdende alt fra private equity til større corporate finansielle og institutionelle investorer. Junglen har så mange kapitalveje:

Vi har de selvstændige, professionelle private investorer, Business Angel foreninger, hvor ”engle” investerer solo eller i syndikering, alle sammen enten i form af passive eller aktive investeringer. Vi har familiefonde, offentlige vækstfonde, større og små venture kapitalfonde, og så har vi de mere eller mindre kendte ”ROCK-STAR” investorer. Altså succesfulde iværksættere som, kan ’talk the talk & walk the walk’ og komme med en x-faktor.

Alle investerer med det formål at få størst mulig multiple tilbage i afkast, men imellem findes der også investorer, som investerer med et større formål globalt eller nationalt, eller mere populært sagt ’purpose driven investors’, og nogle af dem brænder også for at gøre en menneskelig forskel i verdenen.

Hvem der er de/den rigtige for ens virksomhed afhænger meget af hvad virksomheden præcist behøver udover penge.

Hvad kigger investorerne så efter?

I udgangspunktet kigger mange efter den næste globale unicorn. Men i grove træk så ved investorerne ikke, hvordan man med sikkerhed skaber en global unicorn og hvad der er sikre tegn på, at de har fat i en virksomhed, der potentielt kan blive det. Derfor går man som investor i stedet efter at få besvaret nogle ”større” spørgsmål i første omgang som f.eks.:

  • Med hvilket formål er virksomheden startet og hvad dens mission og vision
  • Er virksomhedens value proposition stort og samtidig valideret gyldig på massemarkedet globalt? (hvilken forskel gør den i verdenen/Canvas model)
  • Har virksomheden bevist denne value proposition og i hvilke markeder?
  • Er virksomhedens Proof of Concept gennemført og i hvilken valideringsgrad, hvis ikke hvad skal der så til og hvad er planen for denne POC?
  • Er virksomhedens Proof of Business gennemført og i hvilken valideringsgrad, hvis ikke hvad skal der så til og hvad er planen for denne POC?
  • Hvornår er virksomheden break-even?
  • Hvornår er virksomheden klar til internationalisering og hvordan?
  • Hvis virksomheden lykkes, hvilken betydning får den i branche/marked/verden/befolkning?
  • Skal min investering dække et driftsmæssig hul, eller går al min investering til at skabe vækst? (der er bedre ROI på 1 krone investeret i vækst fremfor 1 krone investeret i OPEX)
  • Hvor svært vil virksomheden have ved at skalere globalt iht. konkurrence?
  • Teamets sammensætning, personlighederne bag, egne ressourcer investeret, graden af ’hånden på kogepladen’ mv.
  • Teamets drivkraft og modstandskraft

– Hvad er de forskellige drevet af?

– Hvorfor startede de denne forretning?

– Med hvilket formål?

– Hvad er deres ’sult’ og hvor ’sultne’ er de?

– Hvor ligger deres dæmoner og kan de håndtere interne stridigheder/unigheder/modgang mv.?

  • Temaets kompetencefelt (hvad har det brug for nu og hvad vil det mangle)
  • Hvilket niveau er forståelsen for organisationsudvikling på hos den nuværende ledelse. (En startup ledelse er ikke nødvendigvis den bedste operational excellence ledelse om nogle år, og igen når der skal skaleres professionelt er det måske et andet ledelsesbehov)
  • Temaets empiriske grundlag individuelt og kollektivt (erfaring/track rekord) for at opnå succes
  • Hvornår vil virksomheden blive truet, og af hvad/hvem, på hvilke stadier og på hvilke markeder?
  • Hvilket investeringsstadie er virksomheden på lige nu (FFF, SEED, Series A..B.., IPO, mv.)?
  • Hvornår og hvordan kommer virksomheden til næste stadie og hvad vil kursen da realistisk være?
  • Kan jeg/vi få virksomheden hen til det næste stadie med erfaring, netværk, mv.?
  • Kan denne investering bringe virksomheden fra nuværende til næste investeringsstadie og er det helt klart hvordan?
  • Hvor mange iterationer mangler virksomhedens produkt/ydelse før den er pitch perfekt til markedet og hvor mange penge skal der bruges til dette? (selvom mange siger at produktet er klar, så ved den erfarne investor at produktudvikling aldrig bliver færdig.)
  • Hvor meget realisme er der i teamets vækststrategi for selskabet (Markedsføring og salgsplanernes duelighed og økonomi, modningen af selskabets indre driftskerne i takt med vækst, behov for management kompetencer mv.)
  • Hvor meget tid skal investoren give til at guide, sparre og lede driftsledelsen?
  • Hvad vil en udenlandsk VC sige til denne case og har vi nogle indikationer på at denne case kan rejse kapital i udlandet også?
  • Kan forretningsmodellen med dens marginer komme til at bære sin egen vækst i fremtiden?

Ovenstående er blot eksempler på nogle af de mange spørgsmål en investor ønsker besvaret.

Det rette match afgør alt

Det vigtigt er at huske, investorer er mennesker og mennesker er forskellige, i forskellige stadier i deres liv, drevet af forskellige ting, og med forskellige baggrunde, paradigmer, formål, visioner, dæmoner, ego’er og kompetencer mv.

Et dårligt match eller en afvisning er ikke ensbetydende med at du, I eller virksomheden fejler noget – Det er blot et dårligt match og nogle gange også på det menneskelige plan. Og matchet på det menneskelig plan er super vigtigt, så det bør begge parter kigge godt efter og få talt omkring tidligt!

Det er vigtigt at investoren man finder, tror 100% på virksomhedens større formål og i bedste fald kan identificere sig selv med formålet og spille en rolle.

Majoritet som minoritet, alle og enhver har følelser for deres virksomhed, og ønsker på bedst mulig vis at bidrage uanset hvordan, hvornår og med hvilket ejerskab de er kommet ind i virksomheden. Man lykkes som et hold og fejler som et hold. THERE IS NO ONE-MAN ARMY.