This article is a continuation of How to prepare a company for successful equity raising? (Strategic track. Part 2) .

Question: “Are the company’s strategic goals aligned with market dynamics and technological trends?”

• Strategy and Implementation Plan. The next step is to define strategic goals and develop a roadmap for achieving them. For investors, it is important to see not only ambition but also how it will be translated into a concrete action plan.

• Strategic vision and goals – the foundation on which the investment appeal is built. They must be clearly linked to the results of market analysis – its opportunities and threats – and to the business model and the company’s current state, including its strengths and weaknesses.

• Market position and growth ambitions: target markets (segments) and the target share in those markets (segments) that the company plans to attain within a 5-year horizon. It is important that these goals correspond to the market life cycle;
• Competitive advantages: the factors of competitive strength through which the company intends to secure and strengthen its market position – product quality, reliability and speed of execution and delivery, cost efficiency, level of service, strength of the brand;
• Product and technological development: directions for expanding the product line and developing new technologies that will ensure differentiation and margin growth;
• Financial targets: target levels for sales, EBITDA, margins, Return on Invested Capital (ROIC), and Free Cash Flow. These goals define the level of ambition and serve as a test of the economic feasibility of the strategy (in conjunction with the financial model);
• Increase in equity value: indicators of shareholder value and returns to the company’s shareholders at an acceptable level of risk.

• Strategy Implementation Plan (Roadmap). If the strategic vision and goals define the general direction of development, the roadmap shows how the company plans to implement its strategic intentions. For the investor, the roadmap demonstrates that the company is capable of managing growth, not just declaring ambitious goals.

• Priorities and phasing.
  Step-by-step implementation of the strategy across 0–1 year, 1–3 years, and 3–5 years, allowing short-term achievements to be balanced with long-term projects and goals;
• Business model transformation / strengthening
  Identification of blocks (in BMC terms) for transformation or strengthening: new segments and products, sales channels, cost structure, etc.;
• Growth paths
  Will the company achieve its goals through organic development, M&A transactions, or a combination of both?
• Projects and initiatives
  Programs to improve the quality and stability of the customer base, modernize production capacities, enhance operational efficiency, enter new market segments, update products or services, develop R&D and introduce innovations, digitalization, etc.;
• Organizational development
  Strengthening management team, introducing new management practices, improving interaction and teamwork;
• Management system
  Implementation of projects to improve management systems, including automation, structural changes, etc.
• Resources and budget
  Financial resources, competencies, and technologies required for strategy execution;
• Control and monitoring mechanisms
  A system for managing strategy execution: control points, progress metrics, scenario planning, and strategy adjustment in light of external circumstances.

• Financial modeling is a tool that translates the company’s strategy into figures and allows the investor to assess whether the declared goals are achievable from an economic perspective. For the company, it is a “stress test” of the strategy: the model shows whether it withstands realistic development scenarios, ensures growth in shareholder value, and provides sufficient returns for both founders and investors.

• Transparency
  the model must be structured and clear to the investor, with well-defined assumptions and logic;
• Integration with strategy
  all initiatives in the roadmap must be reflected in the figures;
• Focus on cash flow
  cash flows are more important than accounting profit;
• Realism
  assumptions must be comparable with industry data and benchmarks;
• Flexibility
  the ability to quickly adapt to changed inputs.

• Sales: growth drivers by segments, customer groups, and products; the impact of market factors and strategic initiatives;
• Cost of Goods Sold (COGS): direct and variable costs, contribution margin, gross profit, and gross margin;
• Operational expenses (OPEX): commercial and administrative expenses, EBIT, EBITDA, and net profit;
• Capital expenditures (CAPEX): investments in capacity, equipment, technologies, R&D, digitalization, payback periods, and impact on business scaling;
• Net Working Capital (NWC): changes in inventories, accounts receivable and payable, NWC requirements;
• Capital structure and debt level: Debt/EBITDA, cost of capital (WACC), availability of financing, and the ability to service debt;
• Financial statements: balance sheet, income statement, cash flow statement (sustainability of FCF generation and ability to finance growth and pay dividends);
• Investment value and return on capital: DCF, ROIC, IRR, EV/EBITDA multiples, sensitivity of returns to key drivers;
• Scenario modeling: base, conservative, and optimistic scenarios, analysis of the impact of market shocks and strategic decisions.

• Risk Analysis
  When developing a growth strategy, the question arises: what factors could hinder its implementation, and how prepared is the company to operate in uncertainty? For owners, this is a familiar part of business, but investors want to see that potential risks are not ignored, but built into the company’s management system.

• Market and competitive risks
  linked to changes in demand, price competition, new entrants, and technological shifts. The company mitigates these by monitoring segments and consumer trends, and by adapting pricing, product portfolio, and sales channels;
• Operational risks
  arise from supply chain disruptions, dependence on specific counterparties, and production bottlenecks. They are minimized through supplier and customer diversification, backup capacities, and quality control;
• Financial risks
  include rising interest rates on loans, increasing leverage, and currency fluctuations. These risks are managed through stress testing, debt level policies, hedging, and working capital control;
• Legal and regulatory risks
  are linked to changes in taxation, licensing, and industry regulations. To mitigate them, companies implement compliance, legislative monitoring, and adaptation of internal policies;
• Technological and innovation risks
  arise from technology obsolescence, cyber threats, or failures in R&D. They are reduced through planned investments, cybersecurity measures, and systematic innovation management;
• Organizational and human capital risks
  relate to dependence on key individuals and the team’s lack of readiness for scaling. These are addressed through succession planning, incentive programs, and cultural development;
• Reputational and ESG risks
  include product quality, as well as social and environmental responsibility. They are managed through ESG initiatives, quality control, and transparent communication.

HOW TO TURN STRATEGY INTO RESULTS?

A brilliant idea is not enough. Without a clear strategy, even the most promising company remains a set of disconnected initiatives, unable to ensure active growth and achieve strategic goals. Strategy is not an option, but a necessary precondition for business development.

From Ideas to Action

A full strategic cycle consists of three elements: formulation, formalization, and consistent execution. Only in this way does a company’s strategic vision turn into concrete results, giving investors confidence that the invested capital will drive business growth and increase shareholder value.

To grow, a company needs not just a strategy, but a cycle: formulate, formalize, and implement:

• Formulation of strategy is not for the sake of the process
  It sets a common direction, aligns the work of departments, and turns intentions into a system that answers key questions: where is the company going to compete, and how is it going to win this competitive battle? But if the strategy exists only in the founder’s mind, it remains a personal vision, not a management tool.
• Formalization of strategy turns ambitions into measurable goals
  Developing and fixing objectives disciplines thinking, helps identify weaknesses and eliminate contradictions. It also plays a key role in communication, creating shared understanding of tasks and benchmarks – from the Board of Directors and top management to line employees;
• Execution of strategy is where the real value lies
  A strategy without execution is just a loud statement without action. Consistent execution is a critical factor: translating long-term goals into operational tasks, assigning responsibility, and embedding a control system. At the same time, combining flexibility with focus becomes the main driver of success – enabling the company to adapt to market changes without losing its strategic course.

For investors, it is important to see not only an effective and well-founded strategy but also the readiness for its implementation. Strategy is part of management, and a necessary condition for its successful execution is its integration with company’s management system.

It is also essential for the investors to see financial calculations confirming the required returns, as this directly reflects the interests of both investors and founders.