33. Offering to Investors

By Roger Bryan

Investors form the core part of the business plan. After all, it is the investors who provide the required capital for execution of the plans that you draft on paper. Hence, it is essential that you include a detailed analysis about the offering to investors.

In this detailed analysis you should ideally include:

1) Capital Requirement – This section deals with the amount of money required to put the proposed plan in action.

2) Usage of Funds – This is where you elaborate the strategy and areas where you plan to use your money and the manner in which you plan to use it. It is essential that you project a realistic and clear picture of this aspect.

3) Structure of the deal – In this area you elaborate the proposed structure of the deal i.e. how much outlay you want in liquid assets and how much in stocks and likewise.

4) Risk factors – As the name suggests, here you elaborate various risks associated with the venture.

5) Expected Returns – The expected return on the investment according to projections is included in this section.

6) Exit Strategy – Elaborate a possible exit strategy for investors. It boosts the confidence of investors if there is a plan of action available in case things do not work out.

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