How do investors evaluate a company?

Investors allocate time and resources to analyze investment opportunities when approached by companies and advisors. Although there are many nuances in each case, Investors generally focus on the following points:

• Business model. Is it clear enough? Is it based on identifiable key strengths over competitors?
• Formalized strategy. How detailed is it, and can it enable the company to grow in its core market and take advantage of new market opportunities?
• Top management. Do key managers have proper qualifications?
• Company’s target markets. Are they clearly defined?
• Financial projections. Are they realistic and yet ambitious?
• Return on investment. Is the investment good enough to generate the desired rate of return?

Why is strategy important?

An in-depth analysis of Strategy and financial model and interviews with founders and top managers precede final decision-making by Investors on viability of the deal and its proposed terms.

Investors lack significant time and resources to analyze all incoming investment opportunities. Therefore, it is critical that the founders put their best foot forward in approaching Investors: this may be their only chance. The whole deck, including Strategy, must be polished.

ink Advisory assists companies planning to raise capital and/or planning to grow through M&A with formulating and testing Strategy.

A properly designed Strategy also serves as a starting point in performance improvement and shareholder value growth projects even if the company is not seeking funding or expansion through M&A at the moment.