The 7 key metrics investment companies are interested in prior to making an investment
David Wood
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Things have changed dramatically since I sold my first business. However, the key metrics investors look at when investing in or acquiring a business have remained pretty much the same.
If you are looking to complete a fund raise or sell to exit, here are some of the key areas you need to focus on.
Revenue Growth:
Consistent and substantial revenue growth signals a healthy business trajectory.
Profit Margins:
Higher profit margins demonstrate operational efficiency and sustainability.
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization):
This provides a clear picture of operational profitability.
Cash Flow:
Positive and steady cash flow is crucial for ongoing operations and growth initiatives.
Return on Investment (ROI):
Investors want to see a compelling return on their capital.
Debt Levels:
Lower debt indicates better financial health and reduces risk.
Customer Acquisition Cost (CAC) vs. Lifetime Value (LTV):
A favourable ratio indicates effective marketing and customer retention.
A strong focus on increasing revenue, optimising costs, and demonstrating sustainable profitability is key to increasing company valuation.
Highlighting innovative strategies, market leadership, and potential for scalability can also positively influence investors' perceptions. If you'd like more tailored advice, feel free to ask for specific details.
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This one doesn't wear a cape, but he does wear a uniform.
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From a religious family in Grenada to a gangster lifestyle in London.
After a phone call with his Auntie back in Grenada, he knew she would not be happy with the lifestyle he was living.
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Fast forward to 2004 Johnson and his platoon came under heavy military attack in Iraq on two separate occasions in May and June.
You can't tell from the picture but a rocket propelled grenade exploded 6” from his head blasting shrapnel into his face, head and brain, his face was torn open and he lost 40% of his brain.
During this attack and after he was wounded, he saved multiple lives. Running over his burning vehicle and dragging wounded soldiers to safety whilst still being shot at.
Johnson was Awarded the Victoria Cross for saving 40 soldiers lives over the two separate attacks.
A true inspiration Dr Johnson Beharry VC COG thank you for sharing your story.
Johnson now runs a charity to help youngsters turn their backs on gang culture. Checkout the JBVC Foundation.
Not all heroes wear capes!
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