If you are interested in attracting investment and you could find an investor, who may be interested in your investment project, it is very important to be able to competently prepare an investment proposal. What is the investment proposal? How is the preparation of investment proposals? What information is needed to develop an investment proposal?
Investment proposal – a document designed to familiarize investors with the idea and the prospect of business development for the interaction of entrepreneurs and investors.
An investor wants to know and understand, not just the history of the company, but his condition at present, potential, prospects, development plans, management’s ability to think strategically and implement those plans very well. For the investor the completeness and accuracy of information provided to it – the most important factor determining the success of the project in the future.
Therefore, the challenge of investment proposals – shows complete and truthful information on the investment project, as well as a demonstration of experience and expertise of the investment project management in your business.
The success of the investment proposal depends on how competently made preparation of investment proposals, the abilities of your staff and specialists to prepare such a document, on their ability to convince investors argued to confirm factual data your project.
Investment proposal and business plan for the investment project have the following points:
Business plan – a detailed document, focused on operating the company on strategy and marketing, but rather a guide to action, and an investment proposal – rather an invitation to bring the business plan into action.
The Business Plan also describes the activities of the company as an investment proposal, but details can not imagine how the goals will be achieved.
Investment proposal – a document intended only for potential investors to help evaluate the effectiveness of investment capital and business plan is designed not only for investors but also for enterprise management.
Investment proposal is developed on the basis of data which contains the business plan of the enterprise, so the development of investment proposals – next step after preparing a business plan.
Preparation of investment proposals based on the standard form of such a document, which allows to provided information on the investment project and the optimally in full.
Investment proposal has the following structure and contains the following information:
Summary: This section must contain a summary of investment proposals, answering the following questions:
What is the profit opportunity?
Is there a potential for market growth?
What are the competitive advantages of the company?
What market share can take your business?
What work experience in this business is you and your management team?
What is the need to finance an investment project?
What is the investor’s exit strategy from the project?
Investment proposal, part of the summary should contain, in summary form, the following information:
Brief business description, products and markets that are already work on.
Financial results of enterprises over the past 3 years.
Brief description of enterprise development strategies, growth opportunities, risks, and forecast financial position for the next 3-5 years.
A brief description of how funds will be used.
Company history and ownership: Investors prefer companies with significant experience in the market and the industry.
Products and / or services: You must specify a key competitive advantage of product and / or services. If the product is new, be sure to describe the process of developing such a product. Use graphs, tables.
Managerial and production personnel: Describe the experience and competence of managers of your management team.
Description of the industry, market and competitiveness: Potential investors examining this information, draw conclusions, and whether the company successful in the market in accordance with the business plans and, therefore, whether it will provide income and growth of business value.
The company’s operations: This description of the production process of the company or ways to provide services to clients.
Financial history of the firm: Financial results of the company for prior periods – balance sheet, cash flow, profit and loss account.
Strategic plan: This description is the main idea of the business.
Risk factors and risk-mitigation strategy: Truthfully indicate the risks that can confront the company, realizing an investment project.
Forecast financial position. It describes the projected financial status of the company in future periods.
In need of funding: In this section, the investment should be indicated as the total capital needs, capital expenditures and working capital.
Corporate governance: Describe the controls the company and the management principles that they will apply in their work.
Government support and legislation: Enter the normative legal acts favorably or adversely affect the results of this project.
Financial proposal: This value and deal structure. This item is an investment proposal can be omitted, and better enable it to negotiate the final stage.
A brief summary: In fact, the summary conclusions of the foregoing. Sum up the results.
Application: Business plans, investment projects, accounting and financial statements, the conclusion of experts, tables, graphs, brochures, product descriptions and / or services, the major contracts, a summary of the leaders, information about the production process, extracts of major laws and other documents.
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