Most founders decide they are ready to raise when they need the money. That is the wrong signal. Being ready to raise means you can answer an investor’s questions quickly, back them with documents and keep the business running while you do it. A raise that starts before that point tends to stall.
Answer these ten questions honestly. Yes or no only, and “sort of” counts as no.
The ten questions
- Can you state the amount you are raising and exactly what it will pay for? Not a range, a figure, with the main uses listed.
- Do you know which instrument you want and why? Equity, loan note, convertible or bond, and why it suits your business.
- Are your last two years of accounts filed and up to date? Or, for a young company, are your management accounts current to last month?
- Do you have a financial model that you built, or fully understand? You should be able to change an assumption and explain the result.
- Is your cap table clean and recorded? Every shareholder, option and convertible accounted for, and matching Companies House.
- Do you have a deck that someone outside the business can understand in five minutes?
- Is a basic data room ready? Incorporation documents, accounts, key contracts, IP, employment terms and the model, in one place.
- Do you have a list of at least thirty suitable investors? Named people or firms that invest at your stage, size and sector.
- Can someone else run the day-to-day while you spend a large part of your week on the raise?
- Do you have enough cash to survive if the raise takes twice as long as planned?
How to read your score
8 to 10 yes: You are in good shape. Fix any remaining gaps in the next couple of weeks and start your outreach. Prioritise your investor list so the best-fit names hear from you first.
5 to 7 yes: You are close, but starting now risks wasting your best introductions. Investors who see an unprepared company rarely look twice. Spend a month closing the gaps, then begin.
Under 5 yes: You are not ready yet, and that is useful to know. Treat the next two or three months as preparation. Work on the numbers and documents first, because everything else depends on them.
You only get one first impression with each investor. Spend it when you are ready, not when you are desperate.
Where to start if you scored low
Not every “no” matters equally. Fix them in this order:
- Questions 3, 4 and 5 first. Accounts, model and cap table are the foundation. If these are wrong, due diligence will find it and the raise can collapse late, which is the most expensive time.
- Then 1 and 2. Once the numbers are solid, the amount and the instrument usually become clear.
- Then 6 and 7. The deck and data room are a presentation of work you have already done. Our guide to setting up a data room lists what to include.
- Then 8. Build the investor list in parallel with the documents. See building an investor pipeline for a simple method.
- Finally 9 and 10. These are about resilience. If either is a no, plan cover for your role and look hard at costs before you start.
Run it again in a month
Save your answers and repeat the test in four weeks. The aim is not a perfect score. It is to know exactly where you stand, so that when you do start, you are moving quickly and answering questions with confidence rather than scrambling to catch up.
A raise rewards preparation more than almost anything else. Ten honest answers now can save months later.
This article is general information, not financial, legal or tax advice. If you are planning a raise, talk to BDM Capital.
Frequently asked questions
If it can state clearly how much it needs, what it is for, how investors get their money back, and can back each statement with a document, it is close. If any of those answers is vague, the raise will stall.
Reconciled accounts, a forecast with written assumptions, a clean cap table, an information pack, a data room and a defined list of target investors matched to the instrument.
Numbers that differ between documents, an undefined use of funds, no view on the exit, unresolved shareholder or legal issues, and a valuation or coupon chosen without reference to the market.
