The first requirement is to take the company to a successful position from where it can easily grab the attention of a potential buyer. To achieve this, one needs to raise capital so as to take the company to that desired height. Here are the most important materials required for capital raising.
One must remember that without a potential product or service, there’s no sense in putting effort in fundraising. So, the first requirement is a great business idea with huge market potential. The entrepreneur should focus on increasing the efficiency of the company, of its team, rather than chasing the investors in a clueless way. This is the basic requirement without which one should not even dare to approach an investor.
Creating a professional pitch book – a planned investment proposal - is highly essential for any business. It serves as a reflection of the company’s mission, vision and values. It must have all the key statistics that a potential investor might want to see – such as, the company’s introduction, the level of financing needed, how the investment will be used and repaid, and other vital information like the products or services, marketing strategies, production capabilities, management team, financial projections and statements, tax returns, etc.
Having all the information and data in places not only saves time but also indicates professionalism. The investors are happy to see that the company they are exploring has put sincere efforts in addressing their key concerns. A successful investment proposal is one that can answer the basic queries of an investor, like, is it safe to invest in the business or how long will I have to wait for my ROI or how much profit will I make, etc.
If the company is already operational, then a detailed description of its development must be included in the proposal such as the name of the company, legal structure, share holders (if any) along with their percentage of share, acquisitions (if any), etc.
How the fund will be used and how much is required in that particular round of financing should be made clear to the investors. Usually the fund gets used in equipment, production, inventory, marketing, etc. If it is a loan, then the proposed repayment schedule along with cash flow projection should also be present.
The management team is one of the most influential factors in capital raising. There needs to be a description of the team members, their individual responsibilities, their qualification and experience and projection of their compensation for the next three years. If there is any probability of further recruitment, that should also be included.
The projected financial statement should consist of balance sheet, loss and gain, sales forecast, expected revenue, inventory schedule, etc. The proposal should also describe a potential exit strategy for the investors. Not necessarily that the investors will leave the investment too early but they will be relieved to know the certain potential moments when they can choose to exit the venture.
These are the most important Materials for Capital Raising and it is vital for any entrepreneur to focus on increasing the value of the company and then build a great presentation to convince a potential investor.
For more information on capital raising, feel free to visit http://mergeralpha.com/