Co-Founder
Investors looking for the next big thing to invest in inherently go for companies that have a good sense of their data as opposed to those who don’t. This bias, if I may call it that, is only natural because only what can be measured can be managed.
Most businesses look to raise external funding at some stage of their journey to continue their growth trajectory and to achieve their stated objectives. Often, the finance team oversees the due diligence process by responding to various data requests from prospective investors.
As a bootstrapped company ourselves, I had never appreciated the amount of effort that goes into supporting and answering all the questions that come the way of the executives and the finance team and the preparation that is needed before the start of the due-diligence process. But having gone through the experience a few times with our customers, my belief in data as the backbone for any company has only been reinforced.
Investors looking for the next big thing to invest in inherently go for companies that have a good sense of their data as opposed to those who don’t. This bias, if I may call it that, is only natural because only what can be measured can be managed. By understanding the eCommerce KPIs at a granular level, you can become a better operator because you can identify issues faster and work on a resolution faster.
We have worked with companies at various stages and helped them with their due diligence process by managing their data needs.
Learn about dtc brands data needs.
Our more successful customers had already invested in consolidating their data into a centralized data warehouse and completely understood their business KPIs across marketing, sales, customers, customer support, inventory, operations, and profitability across all sales channels and geographies.
What enabled them first and foremost was that when the business decided to raise funding, most of their executives were ready, and it became an exercise of going through the motions to secure funding.
In contrast, we also had customers who came to us after they got into the fundraising process only to realize that their metrics across different systems did not match. They did not have answers to questions spanning various business functions, including data about their customers, marketing efficiency, and profitability at a level of granularity that the investors expected to see.
One such customer had invested in a data warehouse but, unfortunately, did not build the supporting infrastructure. They did not invest enough in a team that could use the data warehouse to deliver business insights to the leaders. As a result, the fundraising process took over six months when it should have taken no more than two months.
The process was stressful for the business owners who wanted to monetize their efforts over a decade by liquidating some of their holdings to diversify and do something different with their money. The growth of the business also took a hit as the injection of fresh capital and energy was essential to keep the business moving forward at a pace deserving of such a strong brand.
Although fundraising may seem like it is all about metrics, I also believe in the intangible of perception when it comes to fundraising. Intangibles are non-physical assets that have value but are not easily quantifiable. During a fundraising process, some intangibles that may be considered include:
Investors may value a data-driven company based on various factors, including the quality and volume of the data that the company collects, the value it provides to the company and its customers, and its ability to monetize the data.
Some specific factors that investors may consider when valuing a data-driven company include:
Some of the questions that get asked are the following –
Having a data-driven approach for brands is essential for making informed decisions and attracting investors. Investors value companies that clearly understand their data and can provide comprehensive answers to data requests. Learn how data initiatives approach work for brands.
To be investor-ready, brands should focus on consolidating their data into a centralized data warehouse, automating business intelligence, and defining and aligning key performance indicators for the business across functions. At Saras Analytics, we are here to help you at every step of your data journey to help you become investor conversation ready. Contact us today to learn more about our services and how we can help you craft the optimum next step in your data journey.
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