Elements Of A Proposal For Venture Capital
What Venture Capitalists look for is basically a business plan, tweaked for their purpose (funding).
According to the U.S. Small Business Administration, these are the core components;
Purpose and Objectives
An executive summary of the project with a why funding should be allocated.
Proposed Financing
How much you need throughout the life of the project, where the financing is coming from (debt/equity), how the money will be spent and some solid thinking behind the dollars quoted.
Marketing
Your targeted market segment, its characteristics (including key industry figures), competitive analysis, and how you plan to obtain the market share you’re targeting (with costs)
History of the Firm
Significant milestones (financial and organizational), employee relations, banking arrangements, major services and products offered, awards won, legal issues, etc.
Description of the Product or Service
A description of the product, what it costs, patents involved, key competitive advantage, etc.
Financial Statements
Core statements (balance sheets, income statement, and statement of cash flows) looking both forwards (pro forma) for the next 3-5 years and backwards (the life of the company).
Statements should assume financing is obtained.
Capitalization
A list of shareholders, dollars involved, and in what form (equity/debt).
Clearly outline any associations.
Biographical Sketches
Bios including employment histories and qualifications for key stakeholders
Principal Suppliers and Customers
Outline any suppliers or customers holding a significant percent (I usually use 10% plus) of revenue or costs, include details of any longer term (one year plus) contracts.
Problems Anticipated and Other Pertinent Information
Any lawsuits, labor issues, patent or tax difficulties.
Advantages
What advantages do your project/company hold over others?
What makes your proposal special?
This is the bare minimum required by most venture capitalists.
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