As a company looking to scale, you’ve likely done (or at least started to do) some research on the various types of funding as you want to determine what is going to be best for your company. Since you have landed on the CBGF website, you are likely considering minority equity funding, and you may be wondering if your company is one that CBGF would be interested in investing in.
To help you answer that question, here are a few things that we look for when deciding whether we should invest in a particular company.
When you delve into the world of private equity investors, you will quickly discover that many – if not most – have niche areas where they will invest. In some cases, it will be a specific sector or industry; in other cases, it may be deals over a certain dollar amount.
Some investors seek out only majority investments, while others seek out minority investments. At CBGF, we look for minority investments across a range of sectors of companies headquartered in Canada.
To attract any investor to your company, it is important to ensure you can provide them with sufficient financial information to allow them to make their decision. This information, in most cases, will need to go beyond the typical profit and loss statements that you compile on an annual or quarterly basis.
Although most private equity firms will generally require more sophisticated reports and projections, CBGF is flexible and understands that some companies may not have presentations or audited financial statements readily available. We strive to work with the data and reports the company uses to make its decisions versus asking for a standardized checklist of items.
Additionally, your investors will want assurance that you have a strong management team in place. They will want to meet this team and develop a good professional relationship with them. It is this team, after all, who will be primarily responsible for ensuring the success of the business!
In addition to meeting and getting to know your management team, your investors will also want to know their responsibilities and how they measure success. In particular, you should have an experienced finance director or CFO – ideally, one that has experience handling common requests from private equity firms. For companies that did not have a CFO or other key team members already in place, we have helped them post-investment to hire and bring on new talent to ensure the company was prepared for growth.
In addition, your team should have a clear, collective vision for the future of the company and its long-term growth.
A well-thought-out plan for growth
Companies approach investors looking for capital to help them grow quite often. But investors want to see that you have put some thought into exactly how you are going to grow and exactly how you want to use that capital.
You also need to be able to clearly communicate this plan for growth with potential investors. Keep in mind that potential investors may also have their own ideas about what your company should be doing to grow, so it’s important to be upfront about your plans to ensure your interests are aligned. Finding the right partner is crucial to the company’s continued success.
What does CBGF look for in a business?
CBGF is a minority equity investment firm that focuses on mid-market Canadian businesses across a range of sectors that are looking to scale up. We don’t believe in setting strict timelines; instead, we allow companies to grow at their own pace.
If you think that your company might be a good fit for an investment from CBGF, we encourage you to contact us today.