Preparation for fundraising

Before you seek outside investment, you must be ready with a credible business proposition. You normally get just one chance with each prospective investor, so you need the right story and the right management team to execute it.

Key elements
There are some key elements you must have in your proposition:

• A product or service that satisfies a need - the value proposition. You must be able to prove this to an investor, and also demonstrate the size of the addressable market. It's easier to do this if you have a track record - existing customers and a proper, up-to-date sales pipeline.
• A credible management team with the required range of skills - overall management and drive, sales and marketing, technical, financial. If there are gaps, you must have a plan to fill them.

There's lots more, of course, that should be in your plan, but these two items are the bedrock.

Creating value
A key factor in the attractiveness of your business to an investor is its scalability. How big can it become? If you can readily scale up for international markets (and need investors' money for this), then your proposition will be more valuable and much more likely to attract funding.

The process
You need to be ready for a long fundraising process and plenty of rejection, even with a great story. Investors like to be informed about market developments and will often give you a polite hearing even when they see little prospect of investing. Risk appetite and portfolio spread will often rule out one investor but suit another.

What you need
Your proposition needs to be expressed in three main elements:

• The business plan document, usually renamed as the Information memorandum. This needs to be clear, concise, compelling and comprehensive. It should bring out the main points early in a good executive summary that can be used on its own if required. An even shorter "teaser" can also be useful. Investors will study your plan offline, usually in advance of the first meeting. 
• Comprehensive, detailed financial projections. These should compute internal relationships between the various figures so that the effect of different activity levels is properly reflected. Projections should extend sufficiently into the future so that the benefits of the investment are clearly visible. Serious investors will study these numbers in depth and stress-test the assumptions used.
• The investor presentation. This is usually a Powerpoint presentation by the management team where they can showcase their drive, knowledge and expertise direct to the investor, who can ask questions and form an initial view on the promoters and on their business proposition.

Execution
I have prepared, evaluated and fine-tuned scores of business plans, so I can help you with this process at many levels. I have developed a proprietary projections package that can quickly generate the numbers you will need, and will also enable you to dry-run your proposition in advance of committing funds. I can guide you with your investor presentation, having given many myself and having been on the receiving end of many more.