How to write the perfect investment proposal?

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How to write the perfect investment proposal?

Investment Proposals are somewhat less formal than a business plan wherein you can provide the details of your venture and the way you intend to utilize the investments provided by the investor in order to achieve the desired financial results. Hence, it is imperative to draft the investment proposal while keeping in mind the concerns that the investor may have while investing his money in a new venture.

What is a Business Proposal?

  • A business/Investment proposal is a well-drafted document offered to the investors for pitching in investments by outlining the concept of the business and how you plan to make money out of it.
  • The point of contrast between a business plan and an investment proposal is that the former consists of an offer of a product or a service whereas the latter is an investment proposal in the form of a formal statement comprising of business goals while insisting on return on investment.
  • In an investment proposal, the main highlight of the document is the possible problems in the business along with the offered solution relative to the business and industry.
  • While drafting an investment proposal, the first and foremost concern of an investor will be the ROI (return on investment). The single support that they seek for is the money that they get in return of pitching in an investment, which can be done by drafting a possible proposal.

How to Begin Writing a Perfect Investment Proposal?

In order to make a well-drafted investment offer, it is very significant to have a plan prior to carving out the actual investment proposal. Prior research is significant along with sketching an outline, making spreadsheets and studying other business proposals.

Merely copying other offers will not perform any success with the investors as the investors seek for the specific action plan and not the general business idea. This also means that the investor you plan to offer your business proposal should be relevant to the nature of your business.

Getting Started with the Investment Proposal

The most crucial thing to keep in mind is to develop an understanding of your own business before pitching in the idea to the investors. Along with the fundamental understanding, what you also need to know is the market and the competitors. Thorough and careful research on the target industry along with a comprehensive plan of the proposal could solidify your foundation which builds the confidence in the investors. At the end of the day, a carefully thought out summary of the investment proposal is the key to raise money. For every claim made by you to the investors, they would expect it to be backed with research.

At the end of the day, a carefully thought out summary of the investment proposal is the key to raise money. For every claim made by you to the investors, they would assume it to be backed with research.

What to Include in a Business Proposal?

The essence of the investment proposal should be to yield the money back to the investors through your business. The chief area of concern for an investor is the revenue model of the business. If you could declare loud and clear how they are going to make money back and how much, this will put you at an advantage.

Executive Summary of Your Business

Start with a brief profile of your business which should be around two to five pages long. This will be a review of the entire proposal that covers all of the pressing concerns including “what is it? How will it make money? Where will it be located? What investment is required? What will the investments be used directly for? Who is running the business and why are they the best person for the job? What are the short and long term business objectives?”

Overview of the Company

As previously stated, describe how investors’ money will be used to jumpstart your business. Once the investors are taken into confidence, the next course of business can be taken from since they are the expert in the market. It doesn’t have to be a five-year plan for the business, but since you’re asking for some investments, its better to provide them details on how you will spend it. Investors will want to know and possibly weigh in on your plan for their money.

Other things to keep in Mind

Having been elucidated above the most important aspects of an investment proposal, it is also essential to know “Professional investors, such as venture capitalists and serious angel investors, do not have long attention spans.” Hence, you always have to begin with the most important information and keep your proposal and presentation brief when including these factors suggested by investors and business people alike.

Detailed marketing plan tailored to your business based on research of competitors and industry

The company’s administrators and staff; why they are in the position they are in; what qualifies them for this position? Owners and shares of the proposed business equipment, facilities, and technology currently being used, as well as future additions that may need to be made.

Financial Forecast, Financial references, Investment Exit Strategy

Forbes subscribers strongly indicate the importance of your exit strategy. This is the bottom line of “how the investor will make money from buying in your business proposal.” It comes on a high recommendation that you plan to answer the obvious questions investors will have at the end of your pitch including how their investment will be monetized, which may involve licensing agreements and strategizing a sale of your company to another, larger company.


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