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How to Prepare An Investment Overview to Obtain Venture Capital or Private Investment for Your Business

June 25, 2010 by Frank Goley, Business Consultant

The Investment Overview is used in conjunction with your Long Form Executive Summary to not just solicit interest from an Investor or Venture Capital Firm about your Business Opportunity, but also to give the Investor the necessary facts about your opportunity so it can be quickly qualified and vetted.  The Venture Capital Process can be lengthy, but by providing the right documentation (already prepared prior to your Funding Initiative) from the get-go, you will significantly shorten the VC process and garner the attention your deal deserves.  The Investment Overview should accompany your Long Version Executive Summary (basically a mini- business plan) so the Investment Group can gather more in depth information about your Company, Product, People and Competitive Edge.

An Investment Overview is very detailed, yet it should be brief and concise.  Your Executive Summary and Business Plan will provide the next levels of detail the Venture Capitalist requires.  You will find a suggested Investment Overview Template in this article, and we recommend you customize it to meet the specific terms, objectives and requirements of the Investment Firm you are targeting.  Venture Capital Firms readily provide their investment Criteria and Requirements so that prospective entrepreneurs can provide them the information necessary to determine the deal’s qualifications in view of their investment parameters.  This is probably the single most important document you will send to prospective investors, so ensure it is targeted, concise, complete and accurate, with no mistakes or sloppiness.  Develop the Investment Overview last, after you have completed your Business Plan, Executive Summary, and Loan Package.

Suggested Investment Overview Format    

  I.        Company

A.    Company Name

B.    Location

C.    Business Type and Industry

D.    Business Stage

E.    Business Form

F.    Business Formation Date

G.    Company and Venture Overview   

II.        Product and Service

A.    Product and Service Description

B.    How the Product and Service is Unique

C.    Proprietary Characteristics

D.    Patents, Trademarks and Service Marks  

III.        Experience

A.    Business History Summary

B.    Founders, Directors and Principals

C.    Managers and Key People

D.    Track Record

E.    Previous Venture Capital and Investment Deals

F.    Key Experience  

 IV.        Market and Competitive Edge

A.    Current and Projected Market Penetration

B.    Market Niche

C.    Competitive Edge   

V.        Financial Overview

A.    Investment to Date

B.    Principals’ Equity Contribution

C.    Company Net Worth

D.    Principals’ Net Worth

E.    Investment Required

F.    Terms

G.    Proposed Structure

H.    Exit Strategy

I.      Investment Stage

J.     Liquidity Options

K.    Valuation Pre and Post Investment

L.     Current and Projected Debt to Equity Ratio

M.   Current Ratio

N.    Acid Test Ratio

O.    Collateral

P.    Current Liens, Loans and Terms

Q.    Year to Date Profit (Loss)

R.    Projected 1st to 3rd Year Profit (Loss)

S.    Current and Projected Net Profit Margin (%)

T.     Appraised Values (and Methods)

U.    Return on Equity

V.    Return on Investment

W.   Management, Market, Technological and Investment  Risks

X.    Funds Disbursement Schedule  

VI.        Due Diligence Synopsis

A.    Litigation

B.    References 

VII.        Five Key Questions and Answers on this Deal

A.    Why is this a viable opportunity?

B.    Why I am doing this venture?

C.    Who I talked to in similar businesses?

D.    Have I tried out the Product or Service in the market?

E.    Has my Plan been reviewed and critiqued by Accountants, Attorneys, Bankers, Mentors, Consultants and other Professionals?

For more information on Venture Capital and Private Equity Finance Strategies, Funding Business Plans, Business Financials, Financial Projections, Financial Formats, and Financial Formulas and Calculation, please consult my Comprehensive Business Plan Guide and Workbook.

Some of my Business Finance Articles which you may find helpful…

Small Business FinanceBusiness Funding Sources

Business Funding Strategies

What Investors look for in a Business Investment

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