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Fund Raising - The Cultural Challenge

Headache

 

Francois Montrelay addresses the Economic Change Forum on Fund Raising Challenges.

Francois Montrelay addressed an audience of 200 business owners, CEOs, Venture Capitalists and journalists on October 1st, 2008 (1). He explained the challenges a CEO faces when raising funds, mostly from a cultural standpoint.
The role of the CEO is critical as he’s the one person who attracts investors at the end of the day. The way he sees things and organizes himself can make difference.

 

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Francois Montrelay

Let’s look at the example of a US$ 36 million fund raising exercise I took part in. In about 18 months, we had managed to radically transform the company and make it “investor ready”. The “file” was excellent, but that was not enough. The company was facing fierce competition from other investor-ready businesses!

Three key points made the difference:

1. The CEO adopted investors’ culture

  • A financial culture
  • The CEO started looking at operations as a means to reach financial targets, rather than the opposite
  • The CEO accepted to be “a lonely person for a while”: A tech company CEO is surrounded by bright technologists and is often one of them
  • As a result, the CEO undergoes some “schizophrenia” and lives two distinct lives
  • Instead of rejecting investors, the CEO tries to attract them and guides his team in understanding and accepting them. Where negotiations used to fail, the CEO succeeds.

2. The company put together the team it needed to scale the business

  • No investor would invest in a company where they do not trust the team
3. As a result from the two previous points, the company became a real commercial company

Too many businesses have the best product and best technology in the world, address huge markets but fail to organize themselves to attract the investment they (think they) deserve.

Only by marrying technical, financial and marketing culture, will they reach break-even, stop burning cash and scale efficiently. On paper, this looks obvious. In practicd, this is THE make-or-break factor.

Other speakers at the conference included Jean de Boissieu, Economic Advisor to the French Prime Minister:

and Jean Kaspar, former President of the French Union CFDT

(1)   Mutations Economiques – Conference organized by Dupont-Partners and CCIMP, Oct 1st 2008

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