Startup to Scale-up – What funders expect at each stage

How is this book different from other startups books?

I think many books tend to take one of two angles. One is a much more academic, business course type book and the other tends to be, overly jargonised and I guess actually there’s a third, which is just focused on particular areas.

What I tried to do is take that whole journey. It’s 25 chapters, nice sort of bite-sized. And as I say, it’s really just meant to be an easy to read and easy to understand book that helps people on that journey.

That’s great, …an accessible book. On to the third question…

What are the common growth problems that are faced by startups? ...scaling wise

When businesses are looking to scale, they typically need some sort of finance. If it’s an early stage, early-stage business. It’s difficult to get bank debt because traditional banks look for three years worth of profitable trading, some of the newer banks will go down to 18 months, but nevertheless, you can only borrow really quite small amounts. If you’re looking to scale, you need larger amounts. So typically that means raising equity in one form or another.

Then you need to understand lots of different things, how to value your business, to make sure that you’re selling the right amount of equity for the right amount of money. And that’s guesswork frankly for an early-stage business, but it has to be informed guesswork, and we can help with that.

But again, if you don’t know, it’s not easy, so that’s one aspect. It also depends what type of business it is and what stage you’re at as to how much you want to raise. And then, where is the best place to raise that from? All of those areas potentially make it quite difficult and when combined, most businesses think it is a quicker and easier process than it actually is.

So you should expect, even when you’re investment ready, for it to take maybe six months. Whereas many people come to me and say, we need to raise equity and we need it in two months time. And that’s such a common conversation.

Okay. Interesting. So it’s just about being a little more realistic and practical?

It is, but it’s a case of understanding what is realistic, not what you think is realistic, but what the market thinks is realistic, and pitch decks is another very common conversation that we have. So we’ve worked with businesses, helping them to create the best pitch deck. So often the pitch decks that we see first are just never going to happen because they’re typically much too wordy, much too long.

And, statistically, a VC or an investor would spend three seconds a slide looking at the pitch deck. It needs to stand out. It needs to be interesting. It needs to have a visual impact. You need to be able to take in the information at a glance, but you also then need to have some information. But all the pitch deck is trying to do is to get them interested enough, to want to look at more detail in the next stage.

And that’s something that is a big problem.

That’s great that you’ve segwayed onto and partly answered the next question, which was actually about…

How important is branding, for startups from your perspective?

I think branding is the whole visual impact of the broader brand.

So think of it in terms of all of the things that you do is important. The name of what it looks like, everything. So if you look at my own business, Boom & Partners we are a, I guess you could call it a financial consultancy or a business consultancy, you know, potentially a boring type of business, but we didn’t want to come across as old fashioned and boring.

We wanted to come across as being approachable and friendly, but we’re not a marketing or an ad agency. So you can’t be too hip. You have to be a bit serious, but also a bit approachable. And that’s what we’ve tried to achieve in our own website and branding and what we are actually very often I’m told has worked extremely well.

And only yesterday here at the business show, we’d actually put things away and a lady stopped and saw the name of the company, Boom. And she said, wow, that must be a fantastic company. And that for me is going to stick in my mind.

And not just because of the name of the company, but then the branding aesthetic as a whole, like the cover of the book is orange, which, it’s my book nevertheless, it fits in with the orange of the business. So you’ve got that sort of tie in.

The logo of our business is meant to be sort of confident and happy, but also a serious angle to it. And I think what’s important, whatever you’re doing, you need to try and get across your personality in your business, but also look at it, what are your clients wanting to buy? So they’re the points I would go with, but whatever you’re doing, it needs to be in everything that you’re doing so that there is that tie in.

Consistency?

Yeah.

That’s great. Thank you very much for your time.

He also touched on the importance of branding for startups and that it is much broader than visual aesthetics.

To expand branding can be the purpose your business exists, the values and beliefs you hold as an organisation and how that will inform the company culture and who you will hire. The importance of placing your customers at the heart of your brand and how you serve the distinctly different from your competition.

Branding is broader than consistently applied visual aesthetic, but it’s the visual impact that hits the right emotional cords and gets the audience interested in the first place.

If you need help with strategically branding your startup, do get in touch.