intelligent

Proving your start-up has long-term potential can be a difficult task , but it is essential if you want to encourage investors to open their wallets . Rich Abrahams , Chief Investment Officer of Sprout , explains how SMEs can approach the process of securing venture capital . He speaks about the five Ms to help get SMEs on the right track .

ECURING VENTURE

CAPITAL ( VC ) can be a game changer for start-ups and small businesses , providing a huge cash boost to maximise their growth trajectory .

But scoring VC funding is tough to get . Even as global VC investment topped a whopping US $ 1.1 trillion between 2021 and 2022 , less than 1 % of start-ups managed to secure these coveted funds .

With competition for financing fierce , convincing investors to open their wallets can be challenging . It takes more than just matching the right business idea with the right investor . Meticulous planning and prep work is critical , with a solid grip on what criteria investors prioritise .

From communicating a compelling value proposition to demonstrating strategic advantages , target market opportunity and growth runways , there are a variety of factors that VCs analyse . With so many potential considerations , it ’ s tricky to know where to start in converting the right intel to the right people , in the right way .

In my experience , when reviewing opportunities , VCs tend to emphasise what

I refer to as the ‘ five Ms ’ – Management , Market , Model , Momentum and Money .

Management – assembling an A-team

First and foremost , VC investors place great emphasis on the quality and experience of a start-up ’ s founding team .

Start-ups should showcase their management expertise in an authentic manner . Investors tend to prefer supporting entrepreneurs with

Rich Abrahams , Chief Investment Officer , Sprout