Contents
- 1 What is fundraising?
- 2 4 reasons to use a chartered accountant when raising funds
- 3 The 3 main roles of the chartered accountant in a fund-raising operation
- 4 10 tips for choosing your accountant before and after raising funds
- 5 Which professionals should you call on to help you raise funds for your startup?
- 6 Finotor, the essential fundraising solution
- 7 FAQ
Over the last three years, fundraising in France has reached an impressive €31 billion. For entrepreneurs and startups, this figure is more than just a statistic – it’s a reflection of a dynamic, fast-growing ecosystem. Private equity investors inject millions of euros into innovative projects, propelling technology and startups to the forefront of the world stage.
This trend is set to reverse in 2023, with fundraising down by €5 billion compared with 2022. As a result, it’s even more important to surround yourself with professionals who can help and support you at this crucial stage.
Raising thousands, millions or even hundreds of millions of euros for your company is not just a simple financing operation: it is a strategy that requires rigorous preparation, solid legal expertise and sustained activity. This guide aims to help entrepreneurs through this complex but exciting process. Whether you are in the seed or startup phase, or running a scale-up looking to accelerate your growth, you need to master every stage of the fund-raising process.
What is fundraising?
First of all, let’s get the basics right. Fundraising allows a company to increase its share capital by bringing in investors. These investors may be business angels, venture capital (VC) funds or investment funds. In exchange for their contribution of financial capital, they receive shares in the company. This injection of capital is often essential to finance a startup’s development, innovation or expansion into new markets.
When funds are raised, the company issues new shares which are bought by investors, thereby increasing its share capital. The funds raised may vary according to the company’s development phase and depend on the fund-raising rounds. For example, in the seed phase, funding is often used to develop a prototype or carry out market research. In the growth phase, the funds are used to increase production capacity, recruit talent or enter new markets. Raising funds also involves a precise assessment of the company’s valuation, defined in terms of pre-money (before the capital injection) and post-money (after the capital injection).
4 reasons to use a chartered accountant when raising funds
As we said in the preamble, there’s more to raising funds than just asking for them. It’s a complex process that follows a set of rules and codes that need to be mastered. That’s why a chartered accountant is essential to support your fund-raising.
Assessing real needs
The chartered accountant provides an outside view to determine the company’s real financing needs. He or she will help you to determine whether fund-raising is really appropriate for your project and what amounts you can expect to raise, depending on the type of startup you have.
Drawing up the business plan
A solid, detailed business plan is essential to convince investors. A chartered accountant knows how to translate your pitch into the financial and non-financial arguments that are essential to win over investors.
The network and connections
Thanks to their professional network, chartered accountants can help you identify and contact potential investors. They can organise meetings and even attend interviews to provide persuasive advice and analysis.
Preparing financial documents
The chartered accountant helps to prepare the financial documents required for fund-raising, such as financial forecasts and management reports. They ensure that these documents meet investor expectations and accounting standards.
The 3 main roles of the chartered accountant in a fund-raising operation
The chartered accountant is a key player in fund-raising. As a trusted advisor, he or she helps startups, particularly SMEs and family businesses, to gain easier access to finance.
Identifying funding opportunities
Chartered accountants help to identify the most appropriate sources of finance for each business, whether venture capital funds, business angels, grants or other forms of financial support.
Financial transparency
Chartered accountants play a crucial role in increasing the financial transparency of companies, which is essential for attracting investors. Clear accounts and reliable financial reports are essential to win the confidence of financiers.
Strategic advice and support
In addition to the financial aspects, your chartered accountant will advise you on the strategic implications of raising funds, helping to structure your startup in such a way as to maximise its attractiveness and value.
10 tips for choosing your accountant before and after raising funds
- Financial and business expertise: choose a chartered accountant who understands the financial and strategic aspects of your business.
- Challenge the business plan: your accountant should be able to challenge your business plan to ensure its quality.
- Legal knowledge: make sure your accountant is familiar with the legal processes involved in raising funds.
- Anticipation and proactivity : a chartered accountant must anticipate needs and issues before they become problems.
- Audit management: they must be able to manage audits and answer investors’ questions quickly and accurately.
- Responsiveness: at closing, they must be able to provide the necessary documents quickly.
- Post-fundraising: They must be able to implement new accounting and financial procedures.
- Digitalisation: Must be comfortable using modern digital tools to optimise processes.
- Financial reporting: Able to create detailed financial reports for new investors.
- Network and connections: Have a good network to connect with potential investors and experts in all areas of business.
Which professionals should you call on to help you raise funds for your startup?
A chartered accountant: for all the reasons mentioned above!
An auditor: to guarantee the accuracy of the financial data and reassure investors.
Legal advisers: to manage confidentiality agreements, the terms of negotiation and the redrafting of the articles of association.
A fundraiser: to provide comprehensive support, from preparing the documents to selecting and approaching investors.
Finotor, the essential fundraising solution
A chartered accountant is an indispensable advisor before, during and after a fund-raising operation. Whether you’re just starting up or expanding, their expertise can simplify the process and ensure the success of your startup.
Are you about to raise funds, or are you wondering about the merits of doing so? Do you need the support of an expert? Finotor is the chartered accountant specialising in startups, so you know what you have to do!
FAQ
1. Why is a chartered accountant important for fundraising?
A chartered accountant ensures your financial statements are accurate, provides investor-ready financial reports, and advises on tax-efficient funding strategies.
2. How can a chartered accountant help with investor pitches?
They help prepare detailed financial projections, create professional pitch decks, and ensure compliance with financial regulations, boosting investor confidence.
3. What financial reports are critical for fundraising?
Essential reports include cash flow statements, profit and loss statements, balance sheets, and detailed financial forecasts tailored for potential investors.
4. Can a chartered accountant help with funding strategies?
Yes, they can advise on equity vs. debt financing, identify the best funding sources, and help structure deals to align with your business goals.
5. What role does a chartered accountant play during due diligence?
They assist with audits, ensure accurate financial disclosures, and address investor queries about your company’s financial health and compliance.
6. When should startups involve a chartered accountant in fundraising?
Ideally, involve them early during the preparation phase to ensure all financial documentation and strategies are aligned with investor expectations.
7. Can chartered accountants help secure grants or public funding?
Yes, they can identify eligible grants, assist with application processes, and ensure compliance with grant reporting requirements.
8. How does a chartered accountant help with post-funding financial management?
They help allocate funds effectively, manage budgets, track financial performance, and ensure continued compliance with investor agreements.
9. Are chartered accountants necessary for startups at an early stage?
Even at an early stage, they provide critical insights for financial planning, ensuring a strong foundation for scaling and attracting investors.
10. How do I choose the right chartered accountant for my startup?
Look for experience in startup fundraising, industry-specific expertise, and a track record of successful collaborations with entrepreneurs.
