Trevor Parker

Need More Funding? Not Hitting Your Numbers? How to Keep Funders on Your Side

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Need More Funding? Not Hitting Your Numbers? How to Keep Funders on Your Side During an Operational Review.

For business leaders seeking follow-on funding or additional investment—particularly when the business is not delivering against its plan—the process can feel like a mix of urgency, opportunity, and scrutiny. Whether approaching private equity, a specialist lender, or a bank, securing funding isn’t just about demonstrating potential—it’s about reassuring funders that the business is still a viable investment. Funders will be looking beyond the financials, assessing execution capability, leadership strength, and the likelihood of a turnaround. Working with them means increased expectations, deeper operational oversight, and often, a shift in how the business is run. Knowing how to manage this process, control the narrative, and provide the right level of transparency is key to securing the support you need.

Whether it’s new funding or follow-on investment, a portfolio manager or funder’s primary goal is to support you and your business. Their preferred outcome is to see the company succeed, grow, and generate returns—not to pull funding or restructure deals. However, they also have a duty to protect their investment and manage risk—not just for their own organisation but for the businesses they back. Without a disciplined approach to investment decisions, funders wouldn’t be around for long. Understanding this balance helps set the right tone when engaging with them—they are not adversaries but stakeholders invested in your success.

An Opportunity, Not a Threat

The operational review process is an opportunity, not a threat. Even if you feel you know your business inside out, it provides a structured way to assess challenges, identify opportunities, and build a credible plan to move forward. Many leaders find that the process brings valuable clarity, even in areas they hadn’t expected. Unless there is something to hide, there is nothing to fear—in fact, it can be quite the opposite. A well-run review helps you take control of the narrative, strengthens your case for funding, and ensures that the right priorities are in focus to achieve your goals.

Similarly, an operational review is designed to support the business, not hinder it. If a funder didn’t want to continue supporting or investing, they wouldn’t commission an operational review in the first place. The fact that they are taking the time and effort to assess the business means there is still a path forward, and they want to understand how best to approach it. Rather than being seen as a hurdle, it should be viewed as a constructive process that gives you the opportunity to demonstrate leadership, reinforce confidence, and shape the future direction of the business.

A Unique Perspective

As a CEO of several businesses, I’ve raised investment in multiple scenarios—floating a company on AIM and pitching for growth capital, securing follow-on funding to scale an operation, and raising finance for a business that was struggling to perform. Each situation requires a different approach, but when a business is not delivering against its plan, the stakes are higher, the scrutiny is tougher, and the process becomes far more challenging and emotional. The conversation shifts from showcasing potential to reassuring funders that their capital is still safe, that the business can be turned around, and that leadership has a credible plan. There’s no room for complacency—understanding how funders think, what they expect, and how to manage the process is critical to keeping them on your side.

Through my work conducting operational reviews for funders, I’ve seen firsthand how they assess businesses—not just the numbers, but the execution risks, leadership capability, and operational realities that sit behind them. Unlike some advisors who approach this purely from a financial perspective, I’m an operator, not an accountant. That doesn’t mean I’m any slouch on the numbers—I know my way around a P&L, a balance sheet, and working capital as well as anyone. But it does mean that I instinctively understand what funders are really looking for beyond the spreadsheets. I know how they think, where they focus their scrutiny, and—let’s be honest—I can smell nonsense a mile off. I know where to look, what questions to ask, and when something doesn’t quite stack up.

This unique perspective—gained from working with funders while understanding the realities of running a business—provides a valuable lens for business leaders navigating follow-on funding. Funders don’t just look at the numbers; they assess execution capability, leadership strength, and operational risks. When a business isn’t performing, financials alone won’t be enough—what matters is demonstrating a clear execution plan, leadership alignment, and operational resilience. Understanding how funders think and preparing accordingly can make the difference between securing funding or being left without options.

Many business owners and CEOs assume that if the financials look solid, funding is just a formality. But funders don’t just look at the numbers—they look at execution risk. They want to know:

  • Can the business deliver on its plan?
  • Is management aligned, capable, and proactive?
  • Where are the potential operational risks that could derail future performance?

The Reality of Funders’ Scrutiny

“Over the years, I’ve seen a huge range of reactions when funders start asking deeper operational questions. Some leaders take it in their stride, using it as a chance to showcase their business. Others panic, feeling like they’re under attack. I’ve had everything from a CEO sitting in on every meeting to monitor what his direct reports say, to outright deception of the facts in an attempt to present a rosier picture than reality. The truth is, the best approach is simple: be honest, be prepared, and stay in control of the narrative.”

Why Funders Conduct Operational Reviews and What It Means for You

Investors and lenders don’t just assess businesses based on historical financials; they want confidence in the future. That’s where operational reviews come in. These reviews go beyond financial due diligence to assess execution capability—whether the business is truly set up to deliver sustainable performance.

Why do funders require operational reviews?

  • For New Investments – To validate that the business can execute its growth plans.
  • For Follow-On Funding – To ensure previous capital has been used effectively and that additional funding won’t be absorbed by inefficiencies.
  • For Underperforming Businesses – To diagnose whether financial struggles stem from operational weaknesses and whether leadership is equipped to fix them.

Funders Are Obligated to Ask Questions—It’s Not Personal

“One thing that many business leaders don’t realise is that funders aren’t looking for reasons to say no. They don’t want to catch you out. In fact, most portfolio managers are relationship-driven people—they build careers on trust and connections. But they also have internal obligations. Sometimes, it’s actually awkward for them to tell a CEO they need an independent review. If you already have a good relationship, they might even feel embarrassed about raising the issue. That’s why the best approach is to make it easy for them. Proactively addressing concerns and offering transparency can turn them from neutral assessors into advocates for your business.”

How Should Business Leaders React to Funders’ Scrutiny?

It’s easy to see due diligence, operational reviews, and financial audits as adversarial—like funders are looking for reasons to say no. But the reality is different. A well-prepared leader can use the process to their advantage by demonstrating control, foresight, and operational excellence.

1. Be Open, Not Defensive

If a funder wants an operational review, it’s not necessarily a sign of distrust—it’s standard practice. Avoid reacting defensively or resisting scrutiny. Instead, show that you understand their concerns and are ready to provide transparency.

2. Think Like an Investor or Lender

Put yourself in the funder’s shoes. They want predictability, risk management, and execution certainty.

Key areas funders focus on:

  • Consistency in financial and operational reporting – Can you clearly show trends, performance metrics, and forecasts?
  • Scalability of the business – Can the company handle growth without breaking its current systems?
  • Execution capability – Are you demonstrating that your team can follow through on plans?

The Pros and Cons of a Financial-Only Review

Some investors and lenders opt for a financial-only review conducted by an accountant. This approach has pros and cons, depending on the situation.

Pros of a Financial-Only Review

✔ Ticks the Compliance Box – If the funder only requires a financial review, this approach is efficient.
✔ Provides Financial Accuracy – Ensures numbers are correct and compliant.
✔ Familiar Process for Management – Similar to a year-end audit, minimising disruption.
✔ Suitable for Well-Performing Businesses – If your financials are solid, this may be sufficient.

Cons of a Financial-Only Review

❌ A Narrow, Numbers-Only View – Financials don’t assess execution capability, risks, or efficiency.
❌ Primarily a Desktop Exercise – Relies on existing reports, not deeper operational insights.
❌ Funders Likely Already Have the Numbers – If they’ve already stress-tested your financials, this review adds little value.
❌ Not Enough if Funding is ‘Touch and Go’ – If you’re struggling, you need a deeper operational case.

Final Thoughts: Controlling the Investment Narrative

Whether you’re raising funds for growth, follow-on capital, or financial survival, the right approach can make or break the process.

✅ Treat operational reviews and due diligence as an opportunity – A chance to showcase your business strengths, not something to fear.
✅ Think like a funder – Address risks before they raise them and show that you can execute on your plans.
✅ Prepare in advance – Get your team aligned, have your financials ready, and be clear on your investment case.
✅ Stay professional and proactive – Funders invest in people as much as they do in businesses. Demonstrating leadership and confidence will go a long way.

Considering an Investment or Facing an Operational Review?

If you’re preparing to attract investment or follow-on funding, understanding what funders look for can help you control the narrative and secure funding faster. If you’d like to discuss how to prepare for an operational review or how to position your business effectively, get in touch today.

Trevor Parker

When and Why a Funder Should Use an Operational Review

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When and Why a Funder Should Use an Operational Review

Can this business deliver on its plans?

For private equity firms, specialist lenders, and banks, an operational review can be a powerful tool—when used at the right time and in the right way. Unlike financial due diligence, which primarily assesses the past, an operational review looks forward, evaluating whether the business is set up to execute effectively. However, its timing and approach vary depending on the context.

Many investors and lenders focus on financial due diligence (FDD) or audits to validate past performance and risk, but an operational review provides something different: an assessment of execution capability. Strong financials don’t always mean a business is running well—companies can look profitable on paper while struggling operationally. The real question is:

Financial Audit vs Financial Due Diligence vs Operational Review

Financial AuditFinancial Due DiligenceOperational Review
Focuses on past financial dataAssesses historical financials to determine risk, sustainability, and valuationFocuses on current and future operational execution
Checks compliance with accounting standardsEvaluates financial stability, cash flow, and business viabilityLooks at efficiency, effectiveness, and execution gaps
Provides historical insightDetermines financial health for investors or buyersProvides actionable recommendations for improvement
Tells you what happenedTells you whether the numbers are reliable and sustainableTells you what needs to change and how to execute effectively

While financial due diligence and audits focus on past data, an operational review is forward-looking—identifying bottlenecks, inefficiencies, and execution risks that could impact future performance.

Pre-Investment: A Balancing Act for Private Equity and Banking

Private Equity Perspective

At the pre-investment stage, an operational review could provide an independent opinion on whether the investment thesis is truly deliverable. However, this is a sensitive period.

  • Competitive Dynamics – In a competitive bidding process, PE firms must balance diligence with speed. If management sees an operational review as intrusive, it may put the firm at a disadvantage.
  • Trust and Access Challenges – Management teams—particularly in founder-led businesses—may resist deep operational scrutiny, fearing it signals a lack of trust or confidence.
  • Alternative Approaches – If a full operational review isn’t feasible pre-investment, a light-touch assessment—such as informal discussions with operational leaders, supplier references, or desktop analysis—can provide valuable insight.

Banking and Specialist Lender Perspective

Banks and lenders are in a different position. If they are already financing the business, they may have better access and more leverage to request an operational review before committing further capital.

  • Understanding Where the Money Will Be Spent – Before approving new lending, an operational review helps assess whether the business has the execution capability to deliver its plans.
  • Risk Mitigation – Unlike PE firms, lenders have no equity upside—only downside risk if a business underperforms. An operational review helps determine whether the company can operate efficiently enough to sustain repayments.
  • Trigger Points for an Operational Review – Banks may require a review before increasing credit facilities, refinancing, or funding expansion plans.

Key Takeaways for Pre-Investment

  • PE firms may find an independent operational review valuable but difficult to execute at this stage due to management resistance and competitive pressures.
  • Banks and lenders are in a stronger position to mandate operational reviews before committing funds, particularly when evaluating new loans, refinancing, or expansion plans.

Post-Deal: Understanding What You’ve Bought and Acting Quickly

Private Equity Perspective

Once a deal has closed, an operational review provides clarity on the real state of the business.

  • The Window for Quick Wins – The first 100 days are critical for assessing operational gaps and identifying quick wins.
  • Understanding the Business Beyond the Numbers – Many deals are based on financial projections, but execution determines whether those numbers are realistic.
  • Preventing Surprises – Supply chain inefficiencies, weak middle management, or ineffective sales processes may only become fully visible post-acquisition. An operational review helps surface these risks early.

Speed Matters: Act Early Rather Than Reacting Later

Post-transaction, the natural instinct is to stabilise the business and reassure the team. While understandable, delaying operational changes can be more disruptive later.

  • People Expect Change – Employees anticipate adjustments following an acquisition. It is far better to conduct an operational review early, identify improvement areas, and set out a structured plan in the first few months rather than waiting for issues to surface.
  • Control the Narrative – If changes happen proactively, they are seen as part of a strategic vision. If changes come after a period of stability, they can feel like a reaction to failure.

Common Operational Risks Identified in Reviews

An operational review often uncovers risks that don’t appear in financial due diligence. Some of the most common issues include:

  • Supply Chain Bottlenecks – Poor inventory control or logistics inefficiencies causing delays and excess costs.
  • Sales & Marketing Misalignment – A disconnect between lead generation and sales conversion efforts.
  • Weak Management Processes – A lack of structured reporting, decision-making, or accountability.
  • Technology & Systems Lag – Outdated or poorly integrated technology that limits scalability.
  • Cultural Resistance to Change – Employee inertia or leadership reluctance to make necessary improvements.

Identifying and addressing these risks early prevents operational weaknesses from turning into financial distress later.

Supporting the Management Team: A Critical Pivot Point

A Less Disruptive Alternative to a Management Change

When a business underperforms, investors often consider replacing leadership. While sometimes necessary, this can be destabilising. An operational review provides an alternative path:

  • A Chance to Course-Correct: Instead of immediately replacing management, an operational review gives them a structured opportunity to improve.
  • Reducing Resistance to Change: A well-run review helps management see the need for change, rather than resisting it.
  • Avoiding Unnecessary Disruption: Leadership changes create uncertainty, culture shifts, and the risk of losing key employees.

An Opportunity for Management to Pivot and Improve

A seasoned operational advisor can turn a review into a positive pivot point for the management team:

  • It Creates a Shared Agenda: Rather than being imposed externally, a review should empower leadership to own the improvement plan.
  • It Provides Cover for Necessary Change: Many leaders know what needs to change but struggle to push through. An operational review can serve as an external mandate for action.
  • It Offers a Fair Evaluation Before Making Harder Decisions: If management embraces the review and drives change, the business benefits. If they fail to act, investors can make leadership changes with confidence.

When Things Go Off Track: A Critical Time for an Operational Review

Private Equity Perspective

  • Covenant Breaches & Underperformance – An operational review helps determine whether the problem is financial, structural, or execution-related.
  • Before Additional Capital Injection – If follow-on funding is needed, an operational review ensures that capital won’t simply be swallowed by inefficiencies.
  • Turnaround & Restructuring – If the business is struggling, an operational review can guide the most immediate operational levers to pull.

Banking and Lender Perspective

  • Covenant Breaches & Credit Deterioration – Lenders need to understand whether financial strain is caused by poor execution.
  • Debt Restructuring or Workouts – Before renegotiating terms, lenders often request an operational review to assess turnaround viability.
  • Exit Planning – If a lender is considering reducing exposure, an operational review can inform timing and strategy.

Conclusion: Timing an Operational Review for Maximum Impact

Financial statements provide a snapshot, but an operational review tells you what’s really happening—and how to fix it.

The key is to conduct an operational review early, before issues become unmanageable. Acting proactively ensures a structured foundation, avoids reactive firefighting, and ensures that operational improvements are made on your terms—not as a last resort.

Just as importantly, an operational review can be a management support tool—giving leadership a clear mandate for change. If they take the opportunity, the business benefits. If they don’t, investors and lenders can proceed with confidence, knowing they provided the right opportunity for improvement.

Thinking about an Operational Review?

If you’re considering an operational review for a portfolio company or lending relationship, I’d be happy to discuss how it could apply to your situation. Get in touch to explore how structured, execution-focused insights can drive better investment and lending decisions.

Trevor Parker

A Fellow MD Swears by Professional Facilitation for Strategy—Should You?

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Why the Smartest MDs Bring in Professional Facilitation for Business Improvement and High-Performance Teams

Most Managing Directors are independent, decisive, and highly capable. They have built their success on strong leadership, sharp thinking, and a deep understanding of their business. So when the idea of professional facilitation for a performance improvement session comes up, a few unspoken concerns often linger:

  • “What does this say about me as a leader?”
  • “How will my team react to an outsider stepping in?”
  • “Will this disrupt the dynamic with my leadership team?”

These are completely valid questions. But the reality is that the most effective leaders—the ones who drive real momentum, don’t try to do it all themselves. They recognise that an external perspective can unlock fresh thinking, clear roadblocks, and align their team faster than they could alone.

What This Really Says About You as a Leader

Bringing in professional facilitation isn’t an admission of weakness, it’s a strategic move. It signals that a leader is:

  • Focused on results, not ego – Committed to getting the best from their team, not just maintaining the status quo.
  • Proactive, not reactive – Not waiting for things to break before making improvements.
  • Committed to building a high-performance team – Understanding that peak performance isn’t a one-time achievement but an ongoing process.

The best leaders see facilitation as a tool to amplify their leadership, not diminish it. Facilitation is about unlocking more from their team, not questioning authority.

The Reality of Professional Facilitation for Business Improvement

Performance improvement sessions are not about bringing in an outsider to dictate solutions. In fact, the opposite is true. The most effective facilitation helps teams uncover solutions themselves, aligning leadership and driving focus. Done well, facilitation enhances team dynamics rather than disrupts them.

The Initial Perception vs. The Reality

At the start, an MD might be wary about how professional facilitation will be received. Will the team feel defensive? Will the session feel like an audit? Will this lead to unnecessary friction?

These concerns are understandable, but they rarely materialise. What actually happens is:

  1. Teams settle quickly – Within minutes of starting, people relax because they see that the process is about practical business improvement, not fault-finding.
  2. Conversations open up – Issues that have been lurking in the background suddenly become safe to discuss.
  3. Leaders engage more effectively – Rather than a top-down session, it becomes a collaborative problem-solving exercise focused on high-performance outcomes.

Having worked across multiple industries, particularly with private equity-backed businesses, I have learned that successful facilitation is not just about process. It is about making people comfortable, creating a dynamic that encourages honest dialogue, and ensuring that leadership remains in control while benefiting from fresh perspectives.

Data and Research Insights on Professional Facilitation

Studies have shown that companies engaging in structured facilitation sessions experience significant improvements in key business metrics:

  • 25% improvement in leadership alignment and strategic execution.
  • 30% faster decision-making processes compared to teams that rely solely on internal discussions.
  • Significant increases in employee engagement and productivity, with facilitated teams reporting clearer roles and better collaboration.

These figures highlight the tangible business value of facilitation, making it not just a leadership exercise but a strategic advantage.

Rethinking Strategy: It’s Simpler Than You Think

For many business leaders, the word “strategy” conjures images of grand strategic plans, long-term visions, and complex frameworks. But at its core, strategy is much simpler than that.

  • Strategy is simply the path from A to B.
  • It’s how a business solves challenges and improves performance.
  • It’s about making the right choices to get better results.

For example, if a company wants to improve sales performance, the real question is: What’s our strategy to do that? It’s not about producing a 50-page document, it’s about defining the most effective way forward.

This is where professional facilitation makes a difference. It helps leadership teams cut through complexity, focus on what matters, and align around a clear, actionable strategy that drives real progress.

Ditching Outdated Planning Models—Strategy Needs to Be Practical

Many business leaders have been conditioned to think that strategy sessions must follow rigid academic frameworks, like the SWOT analysis, which has been around for decades. But let’s be honest: if a leadership team needs a facilitator just to list its strengths, weaknesses, opportunities, and threats, there are deeper issues at play.

Strategy is about action, not box-ticking exercises. Business moves too fast for abstract, theoretical models that look good in textbooks but don’t drive real decisions. A professional facilitator doesn’t waste time on outdated templates, they help teams focus on what actually matters:

  • What problem are we solving?
  • Where do we need to improve?
  • What’s stopping us from making progress?
  • What’s the most effective way forward?

The best facilitation is practical, sharp, and focused on execution. It’s about defining real priorities, making decisions, and ensuring that teams leave the room with clear actions, not just a pile of sticky notes and another set of theoretical insights that never get used.

Case Study: Aligning a Leadership Team Around a Joint Mission

A strong example of the impact of professional facilitation can be seen in this case study. A leadership team struggled with misalignment on strategic direction, causing inefficiencies and lack of progress. Through a structured facilitation approach, the session provided clarity, strengthened collaboration, and created a unified mission. The result? A leadership team that was fully engaged, clear on objectives, and committed to driving business improvement as a cohesive unit.

What Business Leaders Say About Professional Facilitation

Mike Linter, Global Head of Tax and Legal Services UK and Vice Chair – KPMG UK, shares his experience:

“My team consists of some very bright, highly intelligent individuals, but I was struggling to get them all focused upon a joint mission. I had seen some of the results which Trev was achieving in similar businesses and so approached him. He ran several team events for me over six months, focusing my team’s minds on our mission, attending regular performance reviews and strategy sessions. We had great success with this approach and resulted in a much more aligned and accountable leadership team with clear KPIs. Critically this resulted in a significant profit improvement across the participating business units. If you want to get your team focused upon a joint mission, I highly recommend you consider using Trev to support you.”

Common Pitfalls in DIY Facilitation

Many leadership teams attempt to facilitate their own performance discussions but often struggle to achieve real change. The most common pitfalls include:

  • Entrenched perspectives and internal biases. Teams may avoid uncomfortable topics or reinforce existing viewpoints rather than exploring new solutions.
  • Dominant voices overshadowing others. Strong personalities can steer discussions in unproductive directions, preventing balanced contributions from all team members.
  • Lack of structured follow-through. Without an independent facilitator, meetings can turn into endless discussions without clear action steps or accountability.

A professional facilitator ensures objectivity, manages team dynamics, and keeps the discussion focused on actionable outcomes.

FAQs: Addressing Common Concerns About Professional Facilitation

“I’m not sure how my team will see this.”
Change can create uncertainty, but a well-structured approach ensures teams feel engaged rather than dictated to. Discussions should be facilitated in a way that respects existing dynamics while driving alignment and action. Most teams find the process refreshing and productive within the first session.

“How will my FD view this expense?”
An FD is focused on ROI. Facilitation is not just a cost, it is an investment in business improvement, efficiency, and decision-making. A structured approach delivers measurable impact, ensuring that the session pays for itself through improved clarity, execution, and even cost savings.

“We should be able to fix this ourselves.”
Even the best leadership teams benefit from an outside perspective. A structured facilitation session helps cut through internal politics, decision fatigue, and circular discussions, allowing leadership to move forward with confidence and clarity.

What Happens Next?

Most MDs who bring in professional facilitation see the immediate benefit: clearer alignment, faster decision-making, and renewed energy within the leadership team. The best part? The effect lasts. The team walks away with clarity, ownership, and the momentum to keep driving forward.

Bringing in a facilitator is about accelerating business improvement. It is about getting a leadership team on the same page, removing friction, and driving tangible results to build high-performance teams.

So, the real question is, if a fellow MD swears by professional facilitation, what might I be missing?