Investment readiness is the capacity of an enterprise to understand and meet the specific needs and expectations of investors, and it plays a critical role in shaping whether a businessreceives investor funding. Two key components influence a business’ investment readiness: business viability and quality of investor materials.
The first aspect of investment readiness is business viability: management teams must demonstrate to investors that their businesses are sustainable, well-run organisations. Businesses should demonstrate a sound business model, unique value proposition and qualified team.
The second aspect is investor materials. Documents such as business plans, financial models, investor teasers and memoranda should be robust and make a compelling case for investment in the business.Businesses should assess their strengths and weaknesses in line with the key investment readiness dimensions. Where weaknesses are identified, management should establish an implementation plan to work on issues that can be addressed ahead of investor conversations. Additionally, management should develop an action plan to execute on once capital has been raised for those challenges that require investment, such as key hires in the organisational chart.If a team does not have the capacity to carry out this self-assessment, the business can participate in investment readiness programs.