While entrepreneurs tend to be gifted with enormous passion, durability and vision to establish and expand their companies, many lack the specific expertise and experience to handle a capital raising or company sale processes much less appointing a reliable corporate advisor.
And this is logical.
We rely on specialists each day to help us with the most significant facets of our lives, for example, physicians to diagnose and treat medical problems. After all, we’ve got medical challenges infrequently (ideally ), yet these pros do this work every day and are incredibly well-versed in what’s required. The alternative (physician Google) is more economical, but there could be severe consequences with getting it wrong.
The same logic follows when relying on a corporate adviser to help grow your infant business.
As a guideline, unless your organisation needs more than $1 million in financing and you’re pitching to parties outside your loved ones, friends and partners, the expense of appointing an advisor does not warrant the cost. These kinds of investors understand you well, reducing the need for a sophisticated and comprehensive transaction procedure.
However, if you’re pitching to high-net-worth individuals, family offices or venture capital funds, you might benefit significantly from having an advisor.
Any adviser who lacks the acceptable licenses (including organising to acquire or dispose of securities) does not possess the essential expertise and credentials to help.
The adviser should also have relevant deal expertise. Advisors with expertise in mining prices, complex financial products, or billion-dollar trades will, for example, frequently lack the hands-on knowledge to help guide a little but fast-growing tech company.
Your advisor should be nearly as passionate as you are about your business. In the event you and your advisor are not enthusiastic about the prospects of your company, investors certainly will not be.
Finding a competent advisor that you trust and enjoy working with will be of enormous benefit when crunching out the nitty-gritty details of discussions, so your company can come from the process with the funding needed to realise its full potential.