INSIGHTS

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There comes a time in many business owners’ lives when they start to think about what options they have for growing faster than their current rate. Maybe you’ve had more success than you first thought and want to capitalize on a period of growth. Maybe it’s always been your plan to provide your product and then accelerate once you’ve shown your model works.

Whatever the reason, if you’re thinking of going for any external investment to accelerate your success, then aside from keeping your levels of resilience high during scores of presentations and beauty parades you will likely attend, you’ll be required to answer several tricky questions which will arise.

The obvious ones might come about your finances – cash flow, profit margins, customer retention etc. – however you will also get asked (in some level of detail), about the team you have in place to support the business growth. Not just who they are and what they have done in the past, but what provisions do you have in place for ensuring that once the money comes in, the team doesn’t say goodbye and take your ideas with them.…

They say that most ideas are replicable, but individuals are not, so if you want to showcase the robustness of your team and safeguard your most valuable assets, a good start is to make sure you are covering yourself by following these tips:

  1. Set the Stage with Clear Expectations: Transparency is key. Clarify roles, responsibilities, and rewards across your organization. This goes beyond the camaraderie of knowing your team well and into demonstrable expectations and how they’ve been set for people, especially concerning equity or shareholding promises. Cement these understandings in writing to avert any ambiguity down the line.
  2. The Cornerstone: Crafting Solid Contracts: Contracts are more than formalities; they’re mutual agreements that safeguard both you and your team. They comprise various documents outlining employment terms, duties, and rights. While a verbal agreement at a pub might feel binding because you’ve known someone ‘like a brother/ sister’, a structured, written contract ensures clarity and legality. This contract should explicitly address critical aspects like confidentiality and intellectual property rights, protecting your business’s core interests.
  3. Document Security and Accessibility: In today’s digital age, safeguarding and accessing your vital documents has never been easier—or more necessary. Utilize digital storage solutions to keep your contracts safe and retrievable from anywhere. Leveraging tools available through your HRhub membership can streamline this process, ensuring that your documentation is both secure and easily accessible.
  4. Succession is not just for Billionaires: Investors are keen on understanding not just the current team structure, but also your succession plans for critical role replacements and business continuity in case you or any of the key team ‘go under a bus’. Outline how leadership and key responsibilities will be managed in the event of major changes, showcasing your preparedness for long-term success.
  5. Highlight Personal Development and Retention Strategies: Demonstrate your commitment to team development by discussing your strategies for personal growth, training, and career advancement within the company. This not only reassures investors about the stability of your team but also shows your dedication to nurturing and retaining top talent.
  6. Emphasise Culture and Values Alignment: Investors are increasingly looking at the cultural fit and the alignment of values within the team. Describe the steps you’ve taken to build a cohesive culture that supports your business objectives and how you ensure new hires are aligned with these values. This helps in building a team that is not just skilled but also committed to the company’s vision.
  7. Introduce Performance and Reward Systems: Detail your mechanisms for tracking performance and rewarding contributions that align with company goals. Whether it’s through equity, bonuses, recognition programs, or professional development opportunities, showing that you have a system in place to reward and motivate your team can be a strong selling point.
  8. Plan for Equity and Ownership Structure: Go beyond the initial mention of equity and shareholding promises by elaborating on how equity is structured and distributed among team members. Discuss any vesting schedules, buy-back clauses, or other conditions that protect the business and its investors while fairly compensating your team for their contributions.
  9. Conduct Regular Team Assessments: Anyone would be reassured to know that you regularly assess team performance and know where your strengths and gaps are. Outline how these assessments inform your strategic planning and team development efforts, ensuring that your team’s composition and capabilities evolve with your business.
  10. Make sure the team is engaged and onboard: The journey towards securing funding is not a solo mission. The first place you will look is to secure your senior team to make sure they are secure and onboard with the plans, however engaging your team in this process helps create a sense of inclusion and commitment too. People love to feel ‘part of something’ and never is this more so than when you are growing. So share updates on your funding endeavours, the potential investors you’re meeting, and the hurdles you’re navigating and you never know, it may also unlock other doors through your team’s networks.

Securing investment creates a lot of different challenges that extend beyond financial readiness. It involves a deliberate plan to manage and protect your team —the core engine of your business – and make sure your HR house is in order. By setting clear expectations, formalising agreements, safeguarding documents, and creating an inclusive, engaged team environment, you’re not just preparing for investment, you’re building a resilient, forward-looking enterprise poised for growth.

Ready to transform your team into your strongest asset for investment success? Give us a call today if you need a helping hand making sure you have the best foundations for growth by contacting us at hello@thehrhub.co.uk or calling 0203 951 1208