If you’re a mature, high-growth, high-impact business, you may have reached (or be en route to) a point where – in order to thrive – you must identify mentors, unlock capital, or collaborate meaningfully with other subsidiaries.
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If you’re looking for investors at this stage, it’s often the case that an investment partner in the form of an investment holding company, becomes a logical growth tool for you. But, what should you do if your objective is to be acquired by a holding company?
1. Be brutally honest with yourself
The size of the investment funding required will impact your choice of funding partner. More specifically, you need to understand your own risk profile in the context of the type of returns on offer. This will help you to identify, and then work to find, attract and retain, the most appropriate funding source.
Related: The cheat sheet to winning over investors
2. Go fishing - in the research sense
Any long-term investment collaboration should begin with in-depth research into potential investment partners. There are many out there, but each has specific investment mandates, sector or industry preferences, and value preferences. Work hard to identify, assimilate, and make sense of these.
3. Fine-tune your desired inputs
Yes, there are some basic strategic values that any investment partner should be able to offer, like access to capital, relevant networks, and economies of scale. But it’s still a good idea for you to decide, upfront, what your big wins are, in terms of the specifics you may require from a strategic partner.
4. Be clear on your plan for the capital
If you’re eager to have your business acquired, be explicit about what you plan to do with the capital from the investment partner. In particular, see that you lay out – in no uncertain terms – how growth will be achieved.
5. Evaluate the potential investor in turn
Any would-be subsidiary should take the time and trouble to ensure that they adequately evaluate a potential investor. Start by finding out where your respective interests are aligned. After that, you should begin to uncover:
- The origins or sources of investors’ funding
- Their detailed investment track records
- Their investment mandates
- Their typical risk profiles
- The returns that they traditionally target
Regardless of who your dream investment holding company is, if your objective is to be acquired, you have to do your homework. Once you’ve done that, you’re more likely to attract the right partner: One who can provide access to capital and support; offer mentorship and ideas around innovation; and help you to build a more productive, profitable environment.
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