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Attracting Early-Stage Investment

In 2002, Andrea Carr founded Rising Stars, which was acquired by Hachette in 2015. She talks here about how educational vision and mission sit alongside commercials when attracting early-stage investment.

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Andrea Carr is an education business founder, leader and investor. She is a specialist in education technology, business growth, organisational change and digital strategy. Her roles include chairman at Teacher Tapp and Mable, board director at eEducation Albert and eyWorks, and trustee of Impact Multi Academy Trust and the Teacher Development Trust.

This is an extract from Education Insights, Winter 23/24: Investment in the UK Schools market. Subscribe to read the article in full and unlock access to our quarterly insights reports.

Attracting Early-Stage Investment: What investors are looking for

Everyone loves a powerful story, so at the outset business founders and leaders need to be clear as to their reason for being. When you’re ready to start attracting early-stage investment, it’s worth regularly practising a short elevator pitch in which you articulate your mission and the problem you are solving, with succinct and honest evidence to support your claims. Anyone looking to attract investment needs to be on top of their financials; being able to confidently present your growth story is of course important, but sensible and believable numbers have to be part of this.

The ‘rule of 40’ is one metric that investors sometimes use to benchmark a business, e.g. an annual growth rate of 30% alongside an EBITDA of 10%. For subscription-based businesses, renewal rates will also get laser focus and rates above 85% will be reassuring to anyone looking to invest. The quality of the team, including demonstrating strong financial and cashflow management, is of course vital too.

Focusing on the end users

What’s important for me, whether running or investing in a business, is to know that there is ongoing, genuine market research happening. Is the business engaging directly and regularly with decision-makers in schools? Is there evidence that conversations with the market are informing the marketing and sales strategy and product development? …

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