Funding and Finance – Top Tips
At a recent MediWales conference on Funding and Finance, a panel made up of advisers from Brewin Dolphin, Geldards and PwC together with Mark Bowman from Pulmon IR and Paul Morgan from Biovici shared their top tips for successfully raising finance.
Here is a summary of the top tips from the panel:
Martyn Davies from Geldards
- Don’t leave it too late to get advisers on board. It is often a false economy to bring them in late;
- Speak to several quality advisers and proceed with the one you have a good rapport with;
- Don’t take more investment than you need, your valuation should only increase moving forwards, it is therefore better to raise more money later at a higher valuation;
- Don’t be afraid to ask questions, this may be the first time you have raised investment, there are therefore no stupid questions;
- Don’t try and do everything yourself, take advantage of your advisers and others in the business.
Phil Sampson from PwC
- Engage early – the more time you have to fully understand what will be required from a transaction and have support available, the more likely you have of getting the deal that is right for you
- Build up trust and rapport with your advisors – engage honestly with them, so that they have all the appropriate knowledge to help
- Make sure you get the right structure in your business as early as possible – leaving it until the last minute could generate unnecessary cost
- Be ready for an investment – sorting out any potential stumbling blocks before an investor looks at the business will help smooth the overall process
- Be aware, investments can take longer than you expect – factor this into any requirements you have.
Greg Tait from Brewin Dolphin
- Engage early with all advisers. If we can’t help you right now, we will signpost when we can and crucially, recognise when you need a different adviser or service.
- A reputable adviser will provide transparency in terms of service expectation and fees. By the same token, when engaging with advisers the more open you are the better the advice will be.
- Distinguish between personal and business goals. For example, if your long-term plan is to retire after selling your business, you need to understand what the business will potentially provide and whether this will be enough to meet your lifestyle aspirations.
- Don’t mistake your business for your pension and never underestimate the power of compound returns! You might think that you can rely on your business to fund your future, but saving as you go will create a better chance of success and pension contributions will often be the most tax efficient route to withdrawing cash from your business.
- Safeguard your company’s most precious assets, its key employees. There are two aspects here, firstly protect your business in case of employee loss, due to long term health or death. Secondly, employees have the same long-term planning questions that you do, so providing access to advice, can produce greater loyalty.
Mark Bowman and Paul Morgan
- Take soundings from your network about suitable advisers that have worked in the life sciences sector and go and speak to the advisers
- Make sure you use suitably experienced advisers – the lawyer who did your conveyancing may not be the right person to advise you on a fundraising
- Don’t hide anything from your advisers – any detailed due diligence by investors will discover any issues
- Do listen to the advice you are given – don’t think that you know it all
- Get your “house” in order in terms of IP ownership and contracts so that preferably your company owns the IP rather than having a short-term licence from a university
Brewin Dolphin Disclaimers:
- The value of investments can fall and you may get back less than you invested
- The opinions expressed in this document are not necessarily the views held throughout Brewin Dolphin Ltd.
- Past performance is not a guide to future performance
- This information is for illustrative purposes only and is not intended as investment advice.
- No investment is suitable in all cases and if you have any doubts as to an investment’s suitability then you should contact us.
- Please note that this document was prepared as a general guide only and does not constitute tax or legal advice. While we believe it to be correct at the time of writing, Brewin Dolphin is not a tax adviser and tax law is subject to frequent change. Tax treatment depends on your individual circumstances; therefore you should not rely on this information without seeking professional advice from a qualified tax adviser.
- Brewin Dolphin is authorised and regulated by the FCA.