Let me take you back four years to when I was an operations manager for a fast-growing tech company. We had it all, good investors, great clients, and terrible back-office systems.
It's always the way, look under the hood of any start-up or scale-up and it's always a lot of chaos. With a little bit of organisation.
My CFO came to me and said, “there are some new investors, and they need to see some information.” If the ground had swallowed me whole there and then I would not have minded.
I knew our data for our legacy clients wasn't great. I knew we had some hidden gremlins in the data. We were a great company, so how did we go about building out what we needed?
Start with WHY
If you haven't read Simon Sinek's book, start with why; you should. Understanding the WHY is a powerful way to build purpose and lead a company towards success. What is the collective cause or belief behind the organisation? How does your vision serve for future success? Why would someone want to invest?
Get the right team
You have to align your C-suite with the transaction. You need to sell it to them first because if they don't support you, you will fail. Then you can build out your transaction team, this should include senior representatives from:
- Finance
- Product
- Operations
- Sales
These people will be key to collating the information needed and implementing any fixes that need to be put into place.
Get your systems in order
A big challenge you will his is that your back office systems and processes may not have kept pace with your growth. When a company is starting out, they are very much focused on revenue and product. Many of the systems that were right in the beginning soon start to creak at the seams when a company scales. Sometimes when you split the data out of the systems you realise there are many inconsistencies, and investors don’t like to be fed garbage (or contracts written on napkins).
Due diligence doesn't need to be hard, but you may have some bitter pills to swallow!
These days potential investors, buyers and regulators are more diligent in their approach. You must get the data right to move forward. You not only have to prove you have a great product but that your business is sustainable for the future. In the current market, a business must either be sustainable or have demonstrated a good path to profitability.
Another big hurdle to overcome is the ‘child effect.’ When a founder looks on their business like a baby any criticism of the way things are done has to be handled gently.
In Summary
Everything doesn't need to be perfect, chase that and it's a 1 way trip to a stomach ulcer. Build out a cross-functional team that can help you collate the data you need. Get your systems in order. Lastly, your company isn't your baby.
Now there's a lot more to this topic than this short intro article. That's why we've teamed up with CFPro to deliver a live stream on this. You can register below.
