Revenue, Growth, Earnings : the numbers that professional investors will look at before investing in your business
When I worked in private equity, I reviewed hundreds of potential investment opportunities and every time I received information about a business, I always started with numbers. Of course, you should analyze the whole business, its market, its business model and strategy, its position among competitors, its operating capabilities and the quality of its management team but numbers need to be right. And although professional investors are a very diverse group of people, with different cultures and investment strategies, they all look very carefully at numbers. First, because their job is to create value for their “clients”, who mandated them to manage their money and generate returns with it. Second, because numbers are a great way to start if you want to assess a company, to understand its reality and to predict its future. On the other hand, business owners who want to raise funds or sell shares often have no clue about what investors expect and look at. They should know better. Here is a short list of numbers that investors will focus on before investing in your business. We will start here with Revenue, Growth and Earnings.