How to prepare for your next financing interview

Have a clear understanding of the financier’s rationale. What would entice a financier to provide you with the desired funds? Focus your approach on the financier’s appetite. Choose such financiers whose appetite is in alignment with your and your company’s strengths. Often times, fundraising companies do not speak with suitable financiers.

Have a clear understanding of the gaps that exist in your operation and business plan and how to mitigate them. It may be beneficial to your fundraising efforts to perform a due diligence investigation on your company/project before approaching financiers. Do speak with the financier about the gaps and how to mitigate them. In other words, allow intimacy (“into-me-see”) - this builds trust. Most transactions are ultimately decided by the perceived quality of the management team and, hence, the trust the financier has in the management team. You can assume that, eventually, the financier will come across such gaps in their due diligence investigation. Should you not have pointed them out already, and assuming such gaps are material, the financier may walk.

Have a clear understanding of your ask. What would you like to receive from financiers? Communicate this ask early on in your conversation with/presentation to a financier. Often times, entrepreneurs and businesspeople prepare presentations outlining who they are, what their technology is about, their company’s strengths, market potential, etc. before unveiling what they actually want from a financier. Financiers, however, will be able to listen much more constructively if they know early on what is being asked of them.

For standard due diligence checklists by type of transaction (equity, project debt, corporate debt) and more information on how to win over financiers and negotiate the financing you want, see The Decision-Maker’s Guide to Long-Term Financing – available here.