📈 CFO’s Guide to Raising Funds in 2024

Valuations are down, uncertainties abound and seemingly, investments are harder to secure than ever. Yet the credit market is open and robust — why are so many businesses continuing to struggle to raise funds into 2024?

Peter Arrowsmith, Managing General Partner, JMI Equity has the answer. Turns out,  there is no shortage of investment opportunities. But investors have evolved in how they choose which to pursue. 

Need to raise capital in 2024? Here’s what you need to know…

2021: The Bubble
Peter has been in the investment business for 30 years. According to him, 2021 marked the year of the highest market activity he’s ever seen — and he’s not alone in this experience. 

2022: The Pop
Following 2021, we saw the bubble burst with slowed investment activity. The Fed increased interest rates to combat inflation, meaning the cost of capital across all asset classes also rose. Investors had to be more careful with their investments.

2023: The Level-Set
Against popular assumptions, these shifts didn’t mark any decrease in available capital. In fact, if your business is doing well, today might be one of the best times to raise funds.

That doesn’t mean it’s easy, though. Despite high available capital, investors are shifting from a growth-centric approach to one that prioritizes prudent cash management.

2024 and Beyond: The Activity Normalization
The bid-spread ask between businesses and investors has still not returned to normal. While investors are slowing activity, they are alive and well, focusing time instead on building better relationships and investing more heavily in top-performing, high-growth companies. 

According to Peter, we should expect to see investment activity tick back up towards normalization throughout this year and next.

What really matters to investors today

With uncertainty still laying ahead, many businesses are struggling with choppy performance due to unpredictable consumer demand. While proving what you have already done is still important, it comes second to proving what you can do in the future. 

Growth investors pay for your future, not your past. 

If you’re looking to raise funds in 2024, these are the things you need to focus on before meeting with potential investors ⤵️

A risk never worth taking
The nature of investment requires risk. Many investors are comfortable taking market adoption and institutional risk. But product-market fit is one thing never worth risking. 

Ensure you have clearly demonstrable evidence that:

• Customers are using your product

• There’s a clear value or reason why your product works

• You have a plan to continue leveraging market fit

Presenting a confident, solid story
Before entering an investor conversation, it’s critical that you can articulate your company’s narrative. 

• How have you performed so far? Why?

• Do you have a predictable growth engine to validate your future trajectory?

• How will you drive pipeline and velocity? Who are your target accounts?

Investors want to know why you're winning and how you’re set up to continue to win.

Raising funds today: A 2024 story
If your business is growing and succeeding in today’s economy, good news — the capital you’re looking for may be closer than you think. But if you’re performance is choppy, like many, you may have to do extra legwork to raise funds today. 

Want to learn more about navigating the investor environment today? Tune into our conversation with Peter on The CFO Show today where we uncover the intricacies of catching investor attention (and capital) and finding the right investor for your company. 

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