I know, the title sounds like you should ask: “well, is there any other kind?”
You would be very surprised.
In a discussion with a group of lenders and fund managers, I got an earful on how to NOTget funded.
70% of all deals shown are presented poorly, they complained. What does that mean?
First, know what your borrower needs. Sounds simple, but if you are to prepare a comprehensive document that covers all the points of the opportunity, you have to talk to your client, ask questions, research their industry-in other words become pretty darn smart about what the client does. The client will appreciate your knowledge and desire to be part of the team and the lender will know if you know what you are talking about in a heartbeat.
Second, that knowledge of the opportunity and your clients needs will enable you to answer the myriad of questions that will come at you from the lender. If you don’t know, you will not get funding. An intimate knowledge of the project will encourage the lender/investor to keep listening. The longer they listen, the closer you are to the investment.
Third, answer the questions. Don’t tell a story. Be professional. Answer succinctly and make sure the negatives are mentioned as well as the positives. Negatives upfront- then sell the positives.
Fourth, when you present to the prospective lender/investor, be prepared to send the business plan and all collateral material. Have your horses ready to run. The lender/investor is interested now-not a week or two down the road. The prospective investor will hear many more presentations in the next few weeks. They can easily forget what interested them in your opportunity if materials are not in front of them immediately.
Fifth, management is still the biggest reason for a lender/investor to consider your project. Show them you and your team have the expertise and experience to make the project a success.
Last, all the above goes back to the title. A comprehensive business plan is an absolute necessity to show that lender/investor the benefits to them and how you will achieve success. All the pertinent information at the tip of their fingers.
Properly researched, prepared and presented.
The Business Plan-Is most important thing you can do.