Success breeds success, or so they say. ‘They’ probably weren’t running a successful business while trying to capital-raise for a second one at the same time.
A strong track record as a business owner might open a few doors in the investment community, but nothing will stop you from having to do the legwork needed to source the right deal for your new business, all while keeping your existing operation rolling.
I have been in the drinks and hospitality space for close to twenty years and started my first business, Sweet&Chilli Australia, a drinks experience and consultancy company, back in 2011 and since it has grown across to NZ and as far as LA. We have about 90 full time staff now across three countries, so it’s fair to say that keeps me pretty busy. But I love a challenge, especially when I spot an opportunity, and that’s where my latest business, Cocktail Porter comes in. The ‘premiumisation’ of the drinks industry has been happening for more than a few years now, and combined with the rise in at-home entertaining, I decided that I wanted to launch a premium subscription service for cocktails. But with any new business you need capital and I realised I would need to raise it in order to get my idea out of my head and into people’s hands.
Even if you have a strong track record of business success, sourcing funding that fits your needs and goals isn’t easy. Doubly so if you are already running a business that absorbs your attention around the clock. You simply don’t have the time to play games or make rookie errors.
Having applied a lot of the lessons I’ve learned along the way, I’m happy to say that Cocktail Porter has just launched as a one-off or subscription service that delivers either pre-made, ready-to-drink bottled cocktails, or a box of high-quality ingredients that you easily assemble at home.
Here are my top seven tips for keeping all the balls in the air while you raise capital quickly and efficiently.
Plan to succeed
Having a clear and concise business and marketing plan is vital. Show the exact nature of your business, what it’s trying to achieve, and how it is different from the others.
See the big picture
Investors are primarily trying to make money, not help you, so you need to consider before embarking on a fundraise, how are you going to return capital to your shareholders? Some investors have more risk-and-reward appetite than others, while others may be happy to offer mentorship. Understand the terms of engagement before you start, and know the end point.
Know your own game
Knowing the history and all the latest news in your industry will give your investors peace of mind. Make sure you can answer detailed questions about industry trends, competitive activity, and opportunities or threats.
Do your homework
Create a list of prospective investors and gather information to prioritise them. If it’s a firm, know who gets the deals done and find out the best way to reach them.
Perfect your pitch
Plan a 20-minute pitch that covers the who, what, when, where, why and how of your start up. Keep it concise, be honest, and engage with questions asked. Identify your uniqueness, but also be prepared for detailed questions about competitors.
Have your numbers ready
Make your financials available and show revenue streams. Track every expense and be prepared to explain any aspect of your balance sheet.
Network, network, network
Find others who have successfully raised, and learn from them, whether they’re in your industry or not. Form relationships and garner any tips you can. Be passionate.
Cam Northway is the founder and managing director of Sweet&Chilli Australia, New Zealand and Los Angeles, a global drinks and events consultancy business, with over 90 full time staff and turnover in the millions. As well as running Sweet&Chilli, Cam is a co-owner of 2018 Chef’s Hat award-winning North Bondi restaurant, Rocker, co-owner of quintessential London pub The Gunmakers, and has just launched Australia’s first premium cocktail subscription service, Cocktail Porter.