As an owner you know your product, your customers, and your operations. You are growing and need more cash. You can acquire fresh cash from all kinds of sources, from friends, banks, or in many forms of equity. A detailed financial model can illustrate the costs and risks and rewards of each source of cash. The source of cash will impact how quickly you grow, the monthly cost, and your ultimate ownership percentage. There is no right answer, but the financial model illustrates your path and helps you make your decisions.
Whether you are reaching out to a bank or an investor to get your cash, their needs are different than your customers’ needs. You are not addressing a customer’s needs; you must address the needs of the lender or the investor. Remember they want to help you, that is their business but what they need, in order to help you, can be overwhelming. How do you move forward?
Yes, your business plan, showing the use of capital, must be prepared as a cornerstone. But that is not the key to successfully addressing the needs. The capital raise will successfully happen when you create a selling tool that communicates the fulfillment of the banks or investor’s needs. The approach is to communicate the operationally workable business plan smoothly to investors so that your business is easy to understand. Then the pitch addresses the needs of the lender or investor. How the business will work to fulfill their needs, the resources required, and proof that it can be done. You must always address what the lender or investors need — what they want. The presentation is short following the outline below and allowing a flow into question your detailed prepared documentation address–
Then the question-and-answer period is where it all happens. You will learn the true nature of their needs and you must be prepared to address them all with documentation. Pe prepared to address their needs with your complete understanding and preparation.