The Press and Journal (Aberdeen and Aberdeenshire)
Flood of capital released by breaching of Covid ‘dam’
The appetite for investment from both private equity (PE) and venture capital (VC) investment firms reached significant levels during 2021.
There was a wall of capital ready to invest in strong businesses.
Market momentum was seen early in the year as investors looked to actively use capital that had not been deployed in 2020.
This, together with the return of investor confidence following the easing of Covid-19 restrictions, has led to an influx of investment in the market which is showing no sign of easing.
Investors are starting to show increased interest in Scottish opportunities.
We are hopeful the levels of investment activity in 2021 set a precedent for 2022 and expect to see a flood of investment into the market this year.
And we continue to see a surge in exciting start-ups and innovative technology scale-ups emerging out of Scotland.
Investors recognise the significant growth potential of these businesses.
Edinburgh alone closed out 47 venture capital rounds last year, according to Dealroom.
With the increase in the number of new innovative businesses comes an increase in competition to secure investment.
At AAB we regularly work with start-ups as well as the PE and VC funds looking to deploy capital and, therefore, have the hands-on experience and knowledge of what investors are looking for and what really makes a business stand out from the crowd.
Securing investment to turn an idea into a viable business is no mean feat, but from our experience the following factors play a major role in catching the eye of an investor.
● A strong management team – credible, with lots of experience in the given sector and also having no issue about admitting a lack of expertise in given areas and looking for outside guidance to fill any skill gaps.
● A robust business plan – investors will want a comprehensive plan outlining the investment proposition, including a history of the business, robust financial projections, a statement of funding need and what the funds will be used for.
● Solution to fill a market gap – it is key for the investor they can clearly see what the company’s product/ service offering is and how this differentiates it from existing companies within the market. Is there an aspect of the market that is not currently being tapped into?
We are hopeful the levels of investment activity in 2021 set a precedent for 2022 and expect to see a flood of investment into the Scottish market this year.
If you are considering raising equity finance and would like to discuss the process or any of the above points in more detail, please get in touch with our specialist corporate finance team.