FIP 009: Raising Equity Investment with Patrick Watson

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In this episode, Patrick Watson talks us through the process of raising equity investment for social enterprises. Based in South America, he is Director of I-DEV’s Global Investment Advisory Group. He’s worked for KPMG and Inter Pipeline Fund, a multi-billion dollar energy infrastructure company.

Some of the things you’ll learn on this podcast include:

• We go back to basics and talk about liquidity in emerging markets, and how difficult it is compared to more developed economies;
• We delve a little into why there is a scarcity of investment finance in emerging economies, such as less money;
• We talk about debt “with equity like features” and vice versa, and we talk about why an investor might prefer that option;
• How to best prepare for going out to investors and what to say;
• Great tips in how to build your financial model and a few important things to know, including how to break down how you intend to achieve the growth you state in your financial model;
• We discuss a little about when equity investment makes sense and when grant funding might be more appropriate;
• We talk about developing a strategic plan for investors and why it’s important;
• Then other materials you need to have ready, such as your investment deck (and what it should contain), 1-2 page investment teaser, a non-disclosure agreement, and your “data room” ready for due diligence;
• We talk about the mindset you should have when talking to investors, who are essentially buying into your business and helping you realize your vision;
• We talk about how the social enterprise could approach investors with a term sheet already worked out;
• Some of the common pitfalls seen by social enterprises when seeking to raise equity finance, including going to too few investors in the initial stages and lack of detail around the growth projections in the financial model.

Resources:

• www.idevinternational.com

Connect with Patrick:

• Twitter
• Facebook
• LinkedIn