Writing a business plan is a mandatory part of any fundraising process. This twenty-page document, explaining the main lines of your project, aims to convince investors and show that your project is solid. To optimize your chances of raising funds, certain rules should be known. Here are a few tips.
Writing a business plan is a mandatory part of any fundraising process. This twenty-page document, explaining the main lines of your project, aims to convince investors and show that your project is solid. To optimize your chances of raising funds, certain rules should be known. Here are a few tips.
Write a business plan
Even if it is increasingly decried, especially in Anglo-Saxon countries where there is a tendency to shorten the presentation of projects more and more and where new methods of business creation are implemented such as the Synopp method, the first advice we can give is simply to write a business plan, because it will always be expected by investors. You must ensure that it is well structured, following a precise and orderly framework. If there is one thing to remember in making a good business plan, it is to make assumptions based on field data. that you have identified yourself. While staying locked up at home, writing a business plan is the best way to be off the mark. Nothing worse than the business plan straight out of analysis and ideas imagined in his head but not validated by the field. What is needed is to set up a project that meets a need, and you will learn much more about this need thanks to “field” data (feedback from your target) than by any other means (Research Google, or an internet questionnaire launched at random). The co-founder of Deezer even explains that the project, ideally, must meet a personal need and must demonstrate it in his business plan.
Adapt your business plan to your interlocutor
A business plan is a tool that adapts to your contacts. Of course, not everything will change radically, but you have to understand the issues of each type of interlocutor to bring out the most relevant information. For example, a banker will want to know if you will be able to repay your loan, so they will be more interested in your prospects for operating margins and cash flow generation. An investor, on the other hand, will have a “capital gain” perspective, by betting on the future. What will interest him the most will be the valuation of the company in the long term, and paradoxically not necessarily your net result in the short term. For example, the company Twitter is now valued at $15 billion but has so far not earned a single penny in profit, with several million in losses each year. Investors, therefore, assume that one day the company will be profitable and therefore take a lot of risks.
The importance of the executive summary
Another important point is to write a “concrete” executive summary. This 2-page document comes as an “introduction” to your business plan. This is what should arouse the desire of your interlocutors, and the desire to meet you and learn more about your project. We write it because an investor does not have time to read all the business plans he receives. He, therefore, makes the first selection on the executive summary.
The executive summary is often the only document read by investors. It must summarize the main lines of your business plan by following a precise framework and succeed in highlighting the most selling points of your project. This is the document that you will send in priority to get an appointment.
Prepare well for the Q&A interview
Finally, one last piece of advice we can give you is to prepare well for the elevator pitch and Q&A session with investors. Indeed, if you manage to get an appointment, it’s a safe bet that you will have to present your project in 10 minutes maximum orally, during a session called elevator pitch (like an employee having to present his project to his boss by only having the time to climb the elevator from the ground floor to the meeting room ). Think through any questions you may be asked about the project in advance and prepare your answers. If you are well prepared, this will necessarily be very reassuring for your investors. The best way to prepare well is to train in front of your associates, friends, and family. You must make yourself understood by any type of interlocutor. And above all, prepare the list of questions that you might be asked and practice answering them.
