A commitment to research and development (R&D) is an important but sometimes overlooked factor for high growth businesses keen on attracting external investment.
When determining what type of start-up or emerging businesses they will back, private equity investors typically look at a number of key areas, including strength of proposition, quality of an executive team, strategic growth plans, financial performance and cost control management.
Investors need reassurance that an investment target is heading in the right direction. A track record of investment in R&D demonstrates the level of innovation within the company, which in turn gives investors a degree of comfort with regard to the competitiveness and the longevity of the business.
Private equity investors also need reassurance that all risks are covered. A company with a track record of investing in innovation and claiming R&D tax relief through a reputable adviser can give the investor confidence in the company’s future competitiveness and a greater level of assurance that there is no hidden liability as a result of inaccurate claims on the part of the investment target.
Article originally published on High Growth Scotland
Read the full article here
