Andrè Symes, C0-CEO, Genasys Technologies
Taking the plunge and starting your own business – whether alone or with a bunch of friends who share your vision – is one of the biggest decisions anyone can make. It’s stressful and there are never enough hours in the day. You think you have an amazing business plan, but the industry or economy changes and you find yourself having to make a U-turn or ripping it up and starting again.
But with hard work, a bit of luck, a lot of sweat and probably some tears along the way, the stars align and your business takes off. Your marketing efforts pay off, people are taking notice and you’re creating quite a bit of noise across your industry sector.
It’s at this point that you face the next massive decision – do you keep going it alone or do you need to attract more funds to take your business to the next level. When you and your team have put in the effort, it can be hard to let go of even a little chunk of your business but the simple truth is that in order to scale up, you inevitably need to get fresh capital and this means allowing outsiders in.
At Genasys, we were very fortunate in that we had achieved a tremendous amount of growth in our home market organically and had been able to remain self-funded for a number of years – constantly reinvesting profits back into the business to facilitate new tech and product development. So it took us perhaps a little longer than other start-ups to reach the point where we felt we needed to get an external investor on board.
Because we had over 20 years of successful growth to point investors toward, we didn’t find it hard to set up conversations with potential partners with a whole range of different investment models. But again and again, we found ourselves answering the same questions like: ‘What is your CAC:LTV Ratio? How is it going to change over the next couple of years? What are you going to do about driving down costs and increasing sales in various areas?’
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And then one scale-up investor came along and didn’t ask any of these questions. Instead, they asked, ‘What are you doing and why is it working?’ They were genuinely interested in our story and become a part of our journey, not by changing things, but by helping us to push and pull the right levers to help accelerate us along the road. The conversation more or less started from a business planning point of view and then worked its way into an investment conversation unlike the approach of the majority of CV and other PE firms.
For us, it was all about finding the right partner who bought into us and our strategy and could bring expertise to the table and not just money. And in my opinion, the most crucial thing for any business that decides to go down the PE investment route is to be clear about what is the most important thing to them – money or partnership, change or expertise.