The founder of indie growth programme Indielab, Victoria Powell, on how to get your business ready for investment
The investment sector for UK Indies is changing – and it’s good news for producers. Two years ago there were very few sources of investment for small TV Indies in the UK. Some trade investors were active, essentially making early acquisitions, but venture capital and angel investment was very hard to find.
Now with the opening of the Channel 4 Growth Fund, along with my very own Indielab and a number of other small VC and angel investor groups, the sector is beginning to look quite different. Today it is possible to secure investment in a variety of places without either losing majority control of your business, or handing over all your intellectual property.
How you prepare for these new opportunities is critical, of course. I talk to dozens of businesses each year who are looking to raise investment, both through our Indielab programme and also in my work as an investment consultant. Indies often come to me when they’ve had a really fantastic year, and they want to capitalise on this and move their businesses to the next level. For these businesses, the most important question is the simplest one but often the hardest to answer – ‘where do you want to be in three years?’ This really is the question that underpins everything else, including how much investment they need, and vitally – how attractive they might be to investors.
Once the business plan is in place and they have a clear view of their direction, we get to the important business of talking about what type of investor they’re looking for. All investors will want your revenues and profits to grow substantially, but each will also bring their own unique benefits and challenges. Some investors will require controls over certain aspects of your business activities, and others will not. Some investors will bring useful knowledge and skills, whilst others may not. It is important to weigh up the pros and cons of each type of investor and think about what type of investor is right for your business; venture capital or private investor, trade investor or umbrella deal with a larger Indie. Whichever route you take it is always a good idea to chat to a handful of founders who have done business with your investor, before you decide to proceed.
Being investment ready also involves getting other parts of your house in order. Knowing where all of your rights contracts are, sorting out your employment contracts and any incentive schemes are just a few items that should be on the check list for businesses looking to become investment ready.
Finally you’ll need to prepare yourself to meet with investors and you should know your business inside and out before you do. Meeting and working with investors is nothing like the pantomime of Dragon’s Den, but that doesn’t mean that a sharp question can’t throw you off your game. Investors want to see something to give them confidence you’re a good bet – that you have the creative and business talent to drive growth. So give them something to believe in and get them excited. That shouldn’t be too hard – after all that’s what telly people do best!
Victoria Powell is the founder of Indielab, previously co-founder of V Good Films and former Policy Adviser to the Shadow Minster for Media and Communications. Indielab is open for applications until February 7th 2017, you can apply at www.weareindielab.co.uk.
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