It offers great tech talent with access to not only top UK universities but also attracts top talent from European universities. European markets are on our doorstep and both the North American and Asian markets can be managed from London. There is also a growing level of sophistication among increasing numbers of private and institutional investors looking to work with talented teams.
At SwiftKey we’ve been very fortunate to have a supportive and engaged group of angel investors. As the business has scaled we’ve partnered with Octopus Ventures and Index Ventures (both in London), and Accel Partners (San Francisco). I would expect that managing these investor relationships is an important part of any CFO’s role – it certainly is a crucial part of my role.
When it comes to investors how do you identify the right partners? How do you manage these relationships? How do you ensure that your investors have the maximum positive impact on your business? Having spent ten years as a private equity investor there are some simple things I’ve learnt whilst operating as both an investor, and more recently as CFO in an investor backed business.
Firstly, the personal relationships are key. Investors might be working with you for five to ten years, through both good and difficult times. The journey is much more enjoyable when you are working with people you respect and like. During the due diligence process any investor will make a judgment call on you and your team.
Make sure you do the same – who will be attending board meetings, what is their own experience, what is their personal style, what authority do they have, who makes the investment decisions when it comes to the next investment round? All relevant questions any CEO and CFO should be thinking about.
Secondly, any investee company cannot spend too much time trying to understand the expectations of potential investors and making sure that these expectations match the business plan and the management team’s.
Alignment amongst all of your shareholders (founders, senior management, employees, angel investors, institutional investors) is worth working hard to achieve and requires an ongoing commitment to maintain. When lost, the distraction and impact on the business can be very damaging, particularly for the CEO and CFO who ironically are probably the people most needed in the business if there is the odd bump along the journey.
All parties can be very excited at the size of the opportunity at the start of the journey so it’s worth testing how investors will react when things don’t go to plan. Referencing is one way to do this and is a must in my view.
Finally, I think for young and growing businesses it’s important that everyone around the business brings something of value to the table to help the executive management team build the business. The executive team is ultimately responsible for delivering the business plan – that should never change – however how quickly or how well the business scales can be impacted by the efforts of investors, non-executive directors, and business mentors/ advisers.
Building a network around the business is a good investment and doubly so when you are thinking about how the business might look in twelve or twenty four months time, and who might help you when you get there.
Working with engaged and supportive investors is rewarding in itself. Successful investors have seen many teams build many businesses in many different markets. We are open to and interested in these different perspectives and enjoy working out how they help us build our business.
Richard Gibson is the CFO of SwiftKey and winner of this year’s Private Company FD of the Year at the FDs’ Excellence Awards.
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