How can I attract new investors for a 31 year old family owned professionally managed Consulting and Soft Skills training company based in India?
The new investments will be essentially used for:
1.Setting up an Academy in India
2.Converting all materials to e-learning / anytime learning modules
3.Upgrade and further augment our IT competence.
4.Immediate growth in ASEAN region. Accord Business Solutions Pte Limited, our company in Singapore has been operational for 04 years and is doing good business
5.Start our operations in Middle East
6.Planned expansion to Bangladesh, Srilanka, Afghanistan, Bhutan, Nepal possibly Pakistan. These are known as SAARC nations
7.Consider possible mergers and acquisitions
India is all set for a massive leap forward because of the new Prime Minister and the new government that takes oath tomorrow. This is the right time for foreign companies to re-look at India.
As many of the other respondents have indicated, there is no one answer to either your general question, or the specific ones you've listed. So, instead of adding to the already good advice that others have given, I am going to take a slightly different approach and encourage you to think about what you want the company to look like AFTER you've expanded. For instance... Do you want to maintain full control of the company after the influx of capital? What level of debt are you (and the board) comfortable with? How comfortable are you having board members that are not part of the family? Answering these (and similar) questions will help you focus on what types of financing are appropriate.
Mr.Parshad. Since it is a 31years family owned company, start with the banks, specifically the bank your company is using. Your bank, If comfortable, would be a great help rather finding new investors, unless they are known to you and have an interest. Bank could give additional capital, bridge loan or collateral financing. Some banks- i don't know would be equity player? That is what you focus before going to outside investors with full plan and what kind of returns you have to offer. Since it is a family owned, investors might not be very interested unless you come up with strong and attractive package and plan. Pradeep Berry
1 - as a mentor I would not look at this as an investment as
a - a 31 year olf company should clealry have well structured resources
b- you can partner smaller firms in all of these area with infrastructure / so why do you need capital - a simplae franchise model would both benfit both parties and provide immediate resources
c - an academy is just a name / there needs to be far more logic in this statement and again shared resources can easily avjioeve this goal with very little new investment
d - if the companies are doing good business a portion of cash flow can lever investment
e - If you cannot afford something it is not wise to do it
f - I would seriously question management competance to handle such dramatic roll out based on capital alone, when human resources and orders are more important in this area than capital
g - why do you need investor capital for mergers and acquisitions, a sound business structure can easily be leveraged by a bank based on the companies asset base, and no investor is going to put up money for maybies
h - I would never base a business decision on politicians that is commercial suicide / they are merly civil servants paid to promote propoganda and have no real authority. Witing for a politician to act in a business climate is like waiting for paint to dry
India is a self made country with enormous capital resources in many business. A huge fault with all emrging countires is the belief that foreighn capital is the answer to their business
There are many ways Indian business could lever a succesful business, based on small share schemes or even the students taking equity for the duration of their courses and selling the equity on
I would not hold my breath for investors for a roll out plan of this nature, investots would want to see solid management in all these areas and a family owned business has it's own risks and challenges
good luck ut do what you can with your own resources in a strategic manor and leverage joint ventures there are many companies in the same boat who would benfit from shared expertise
The principle statement here investment in India but a business is about business. I hear nothing about students, profitability or targeted sector potential and who is apying for this training either
You have to plan the funding with the business plan. Set up the systems, plan the numbers, due diligence and the works.
There's a fair amount of preparatory work required for any longstanding business to be readied for the first round of funding ....
My suggestion would be to either engage an Investment Banker right away or use a Financial Expert to do the preparatory work first and then engage with the Investment Banking community with a better defined value proposition.
Without appropriate preparation, it would extremely difficult to derive an appropriate value proposition for the years which have gone into the business itself.
Hi you're telling me what you want to do, but you need to tell me as an investor whats in it for me, what will be my return on investment.
You need to create a compelling business case, highlighting the 31 yrs of experience, propitiable growth, showing that will continue with the move into new areas and new technologies.
Your competing in a very tough environment, and you're late to the party with e-learning capability. So you need to create a really compelling case.
Hope this helps.
The first step in this case is definitely to put together a business plan. This will discuss your business, the owners, market, specific action plan, and financial implications (a DCF valuation would be nice). Also a slide deck presentation.
While you're doing the business plan, you should look around for possible investors, get a conversation started and send them your bplan/ slide deck for them to understand why it's a great opportunity.
Your investors could be (extended) friends and family, angels and VC firms and especially similar firms in these countries or your home country who might want to team up for a joint venture and gain international recognition. Possibly your government might have grants to offer as well since it is so progressive. Foreign investors always welcome! Let me know if you need further info regarding the bplan.
Hi Mr. Prasad,
Yes, this is a great time in addition with the positive political wind that can favor US interests as well in India.
What you can do could be list of things:
a - How do your value propositions convert to an ROI for the Investor (s)?
b - What is the track record on your 3Ds (Defects, Delays, and Deviations) to date?
c - How does your business proposal stack up to competition?
d - How will your product/service relate directly to the customer's EBIT?
e - What business pain points are addressed through your product/service model?
f - How do your business leaders come across as reliable to pitch this model?
g - What is your GRC (Governance, Risk, and Compliance) policy?
h - What CSR strategies do you have in place for your investors/community?
i - How will investors compare your model apples-to-apples basis with other offers?
j - What is the demand-to-capacity ratio (DCR) for the product/service you offer?
Hope this covers your question comprehensively and if you need further guidance, we can talk offline at a time mutually convenient. Good luck with the investors though.
You have a very well established business with some well known clients such as ABB and Accenture, so it should not be too hard to attract new investors. In order to assess how to attract new investors, it would depend on how much money is needed. Generally you would need to put together a full business plan, including your current P & L and your projected earnings and cash flow for the next 5 years. If you are looking for venture capital investment, this is usually only a five year investment before exit, so you would need to prepare your business plan to concentrate on business that will give the highest rate of return in that time period. All the best in your expansion.
Hello Shivanand , As you said 31 year old family owned professionally managed consulting , that means the company has its huge data of training programs & its huge data of clients , Managers of the company has to sit marketing plan on long term basis showing How much can be income for future , of course -its very important to know how much is the expected income , main points to be shown to investors - Size of the market - Estimated share of the market , estimated income .
Shivanand, the first question I would have is how much are you looking for from these investors? Since it is family owned, are all family members agreed that outside investment is necessary? Investors tend to shy away from family run enterprises because of inevitable conflicts that arise from within. It becomes tough to manage. I'm not saying that is the case with your business but that is how investors may look at it.
Also, what type of consulting services do you offer? Whom do you compete against in these different countries? What is your value proposition - your 'secret sauce'? How will you expand and build your customer base in these countries?
I would also leave out the IT competence upgrade. Investors don't pay for that sort of thing. The M&A should be an exit strategy and you should have candidates identified by now.
I usually do this as a consulting assignment so this is as far as I can go. If you are interested, you can private message me.
Hello Shivanand. Thank you for the question. First, it seems that you are planning a lot of activity around an influx of investment funds. From an investor perspective, I would want to know what is your current market and level of earnings, then the proposed market(s) and anticipated growth rate for your company (revenue, earnings, etc.) and then the detail on mandatory upgrades that make it possible. I would anticipate an investor would most likely follow the logic of investment in growth as follows: (1) Accelerate corporate growth in Singapore which as been operational for 04 years and is prospering, (2) Initiate Middle East operations using the model and experience from our Singapore operations, (3) enhance product offerings through new E-learning / anytime modules, and (4) Solidify timeline and triggers for expansion to SAARC nations using established models or potential mergers and acquisitions. The Academy in India may be a blessing on the side and may provide knowledge workers for your consultancy but the time line between start-up and product is a bit long for most investors....certainly not first on their list. If there is a more specific link between the Academy and the new business growth points, then be specific about it and by all means, include the Academy in your proposal. Remember, you want to attract new investors so talk in terms of return on investment, time frames to achieve each new level of performance, etc. In short, have a well grounded business plan covering growth, revenue, costs, risks etc. Good luck and let me know if I can be of specific assistance.
You need a rational plan that shows how the additional funding will grow the business. Show a timeline for revenues and profit. What is the exit strategy and how long to exit.