Finding Money Advice

So what happens to your business plan once it reaches the desk of a potential investor? Someone (usually) opens it and logs it in along with the many others they received that day. The first cut comes when someone determines your plan involves the type and stage of business that they like. Next, that same someone decides who in the office should read it. Based on our advice, you’ve already addressed it to the partner who’s likely to be interested, so your plan should scoot straight to their desk. And, yes, packaging matters. A good looking plan won’t necessarily be funded if the contents are weak, but a scruffy looking one, regardless of contents might not even have a chance. If you can’t manage the process of putting together a good investment proposal, why should you be able to manage a fast growing company?

We offer a number of secrets in the Finding Money ebook, based on the fact that we’ve been on the receiving end of investment proposals that are must reads if you’re serious about going after venture capital.

Here’s one: The best way to ensure your plan is read is to have it referred in by someone who is known to and respected by the investor. Their letterhead on the cover of your plan will do more good than just about anything else you could do at this stage. Investors don’t like to waste time any more than anyone else, so when someone they trust suggests they should look at your plan they’ll spend time on it, rather than take a chance on an unknown.

Once an investor decides to read your plan, they’ll start by skimming the executive summary. If they have a glimmer of interest, they’ll also skim the management profiles to decide if the people you’ve surrounded yourself with appear to have the right skills and background. Next, they’ll flip to the “good parts” to see if the plan has the financial depth to really provide them with the level of return you offered in the summary. If your valuation is reasonable, they’ll flip to your financial projections.

If your plan doesn’t make it past these initial checkpoints, they’ll probably put it down and move on to another. If your package passes the sniff test, whoever reviews your plan will probably talk it over with a few other people including partners, other investment firms, and maybe a few industry people. If they’re still interested in it after a few days or weeks, they’ll want to meet. The date for the meeting will be much too far in the future to suit your taste and bank balance, but don’t give the appearance of being desperate by pushing too hard. Everything will take longer than you want. And, by the way, it ain’t over ’til it’s over. No matter how excited and encouraging investors seem along the way, don’t spend the money ’til you have it.

A few tips (there a dozen more in the ebook, including a list of essentials you don‘t want to do):

• Start looking before you need the money
• Write a spectacular Executive Summary
• Consider your investor’s needs and wants
• Remember investors have short attention spans
• Make sure your projections are realistic, not wishful