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Hannah’s top tips: How to prepare for your business or charity to raise investment

by Hannah Sheath

At ClearlySo, we want to scale social and environmental change by helping impact-focused business raise investment. As well as matching entrepreneurs and businesses with investors, we spend a lot of time with management teams helping them prepare for investment.

This blog explores the benefits of early preparation, managing investor expectations, and offers a simple how-to on preparing to raise capital. It’s pretty detailed – so if you’re in a rush, we’ve put ten top tips for preparing for investment below.

Why prepare for investment?

Thorough preparation goes a long way to gaining and retaining investor confidence, keeping timing on track, and ensuring the overall success of the capital raise. When you’re raising investment, you’re also trying to run your business; proper preparation will ensure the process is as smooth as possible, and prevent it from interfering with actually running your business.

Management teams that have planned ahead tend to have spent longer thinking about their growth strategy and financial assumptions, giving them a more robust and coherent business plan and more confidence in their financial projections. Both coherence and confidence present well to investors; preparation is absolutely vital.

A well-prepared investment proposition will reduce the last minute stress of pulling information together on demand, giving you confidence in your growth plans. It means you will be able to concentrate on running the business, dealing with questions from investors as they arise.

Positioning yourself for investment: 6 things to consider

You should start preparing for investment as soon as you begin to contemplate raising capital. As well as writing a business plan and building a financial model, there are many other things you need to consider to position to your business in the best possible light for investment. These include:

Impact measurement

Impact-focused investors will want to see evidence that your business is as socially or environmentally impactful as you say it is. Work out how best to measure your impact, start collecting data and measuring results as soon as possible to prove your impact works. If you need help on this, there are many companies who can help – for example, Intentionality – or see our Guide for the Ambitious Social Entrepreneur.


Investors are more likely to invest if they know who you are. Ensuring you have good PR campaign will help get your name out there and raise investor interest. It takes time to build up reputation, so start making PR contacts and publishing success stories early. Social media matters, too – an engaged community of customers and sometimes even potential investors can help add credibility to your investment case.


A strong management team is essential for investors. Spend time recruiting for skill gaps to ensure you have the right management team, board and advisors. If you are raising money to build your management team or hire a key member of staff, identity who that person is, initiate discussions with them and get them to agree to join before you start speaking to investors – you can then sell them to investors as part of your proposition.

Tax relief

There are tax reliefs available for certain companies; these minimise tax payable by investors, increasing their returns and making investment more desirable. Check if you can benefit from the SITR, EIS or SIS schemes and ensure you allow enough time to get these in place.

Financial track record

Investors will want to see that your business is profitable and has a track record of growth. If you are running a charity, they will want to see strong revenues that demonstrate your ability to take on future investment. Think about when you buy assets, take on more staff or move into bigger offices as these will have an impact on your profitability. If you have large, one-off outgoings, make sure you can justify them and highlight these as anomalies. Think about how your track record will read to an outsider, and understand your weaknesses before an investor points them out.

Ask the experts for help when you need it

Raising investment can be tough, especially for startups where the entrepreneur’s time is focused on building the foundations of the business. There are grants available to provide investment readiness support for businesses looking to raise capital; these grants often pay the fees for you to work with advisors like ClearlySo to get you investment ready (for example, we are an approved provider on the Big Venture Challenge, The Big Potential and Big Potential Advanced funds). Make sure you apply well advance of when you need the capital, as the application process can be time consuming and the investment readiness work normally takes 3-6 months.

Investment Materials

Executive summaries, business plans and financial models

Investors will require a two-page executive summary of the business (also known as a “teaser”), alongside a business plan and a financial model. They will also want to meet the management team, normally through an investor presentation for which you will need a slide deck that tells the story of your business, outlines its need for investment and shows what you will spend the money on.  

Investment requirement

Be clear about want from investor including size of raise, valuation, timings and deal terms. Ensure what you are asking for is reasonable and matches your growth plans (unsure on valuation? Check out my previous blog for a step-by-step guide).

Investor list

Spend time thinking about where your investors are likely to come from to ensure you are targeting the right type of investor and position the investment opportunity accordingly. In general you are more likely to successfully raise money from someone who you know or has a link to your business or someone who has made previous investments of a similar type. Track everyone who you have approached and their responses in an investor database. If you work with someone like ClearlySo to help you raise capital, knowing which investors you have already approached will ensure work is not duplicated as your advisor starts to sell this deal to their own investor network.

Due diligence

Having reviewed your investment materials, if interested, investors will send you a list of due diligence questions for which they will require answers. Try think ahead and answer any difficult questions upfront in the business plan – and read my colleague Hayley’s blog on the thirty-odd questions they might ask you. Investors will have a list of information they need to receive beforehand, and it can take a long time to gather information; you don’t want to miss investment/credit committees because you didn’t plan for this in advance.

So, yes, preparation is key. It gives you peace of mind and will let you focus on running your business, not panicking that you’re one step behind your potential investors, or making mistakes in your documents that will damage your credibility. And, from experience, here are my top ten tips:

Top 10 tips:

1. Don’t underestimate the time it takes to prepare investment materials, meet and pitch to investors and gather due diligence information. Plan the capital raise around critical points in the business and your personal life.

2. Know your requirements: know what is required of you and when. This will help you manage your time and ensure you are available during key points of the capital raise.

3. Thoroughly prepare investment materials: make sure they are consistent and accurately portray the business. Any inaccuracies will be spotted by investors and detailed questions asked during due diligence.

4. Keep to promised timings: undelivered promised will damage your credibility.

5. Marketing is key: get your name out there early.

6. Know your impact: collect data, measure results and prove your business is impactful.

7. Prepare due diligence information: determine the key areas of due diligence and prepare for them in advance.

8. Don’t hugely overstate your valuation: it’s great to have an ambitious valuation and you can negotiate with investors to agree pricing, but be careful of setting your valuation too high.

9. Build the right team: Spend time ensuring you have the right management team, board and advisors.

10. Remember it’s a two-way process: Think about what you want from investors and prepare your own questions too.


And, as always, If you’re looking to raise between £200k – £2m from individual investors, or between £2m and £20m from institutions and you would like some investment readiness support, please do get in touch.

Image: Flickr / Creative Commons /Ken Douglas