If you want to talk to someone about raising finance then get in contact with Ron G. Holland. You can Google him or you can find him here, for example, http://www.topbizguru.co.uk/. Ron has a book out on this subject that is mentioned here. I was at one of Ron’s presentations when he met Mike from Urban Mapz and I know that he raised Mike £250k during the most difficult financial times.
One company that I invested in kept asking for more money from me and its other shareholders. The investment opportunity originally came from one of my ( share ) brokers. ( Not proved to be a very reliable source of investment opportunities ! ). The management team were supposedly “ very experienced “. It was being run by a Venture Capital outfit. It was, of course, a “ surefire bet “.
After a couple of rounds of investing there was a big change in the senior management of the company and a new Chairman took over from the old Chairman and M.D. Clearly something had gone on !
In a letter announcing the change of management there was yet another request for more money. I decided to make an appointment with the new Chairman and flew up to meet him.
I said that I had obviously read what he said in his letter but I was looking for more detail on what had happened and why it might be worth investing yet more money bearing in mind that nothing much had happened with the money that they had already been given and that the old management team was now mostly gone.
Is this “ off the record Chris ? “ he asked. I said that I was happy for it to be if that was what it took to get the full picture.
“Well”, he said, “ the truth is that the M.D. and the Marketing Director ( a lady ) were having an affair and they spent more time in bed together than they did running the business “. In addition they had managed to establish a couple of businesses “ on the side “. These businesses included one that acted as a reseller to the business that I invested in which was basically a manufacturer. Profits from this business were going to the old M.D. ( They obviously had time for some things then I thought ! ).
I thanked the Chairman for his honesty and then asked him where, exactly, were the former Chairman and the Board of the venture capital company when all this was going on ??
There was, of course, no good excuse for this. These “ highly experienced people “ simply did not have their eye on the ball. They were not watching the business closely enough and the M.D. and the Marketing Director were able to run a business, unimpeded, in an awful state, establish side-line businesses and indulge in hours of sex together whilst being paid for it !!!
Morals of the story:
– Just because you have experienced people overseeing the company does not mean that they are actually doing their job
– Warning bells should sound when repeated requests are made for money
– If you are not getting regular financial updates there is probably something wrong
– Sex and relationships often get in the way of good business!
During a sale process the Boards of the acquiring company and it’s advisers are typically involved in the detail of the deal and certainly there can be emotion involved in the respective Boards views.
Chairmen, Non-Executive Directors and other investors in the company may be able to provide useful objectivity during the process. Sometimes they are not objective as they are too deeply involved or affected themselves but other times they are experienced, objective parties – which is why they hold the roles that they do. They will, more than likely, have seen it all before. They can calm or highlight certain situations from a position of detached perspective.
It is useful to have people like this around if you can find them.
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This blog post is a part of a series of posts describing The Sales Process – you can access the other parts of the series from the links below:
Given the allowance for the prospective buyers to digest what has been presented and then present back to you, you want to see indicative offers.
You should make it absolutely clear that there is a deadline time and date for receipt of indicative offers.
People may come back with a whole range of reasons why they cannot make that deadline, some reasonable and valid and some not.
It does not matter to you – you have a process underway and timescales that you are working to and if people can’t make it then they can’t make it.
He who hesitates is lost !!
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This blog post is a part of a series of posts describing The Sales Process – you can access the other parts of the series from the links below:
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