How to Create Investment Packages

By Mark Tack, Tack Point Group

So, you've made the decision to spend valuable time, and perhaps money, developing your investment package. Realizing that you need a complete set of documents to successfully present your business to investors, you may be asking yourself "where do I begin?" We have some suggestions for helping you create your investment packages.

In the beginning, we recommend creating a business plan. The business plan is made up of separate but related pieces, such as market research, marketing, operational, organizational, and financial sections. To create your plan, you should ask yourself, "what pieces do I have and what do I need?" Once you have determined your needs, you can begin pulling all the sections together. In some cases, it may be necessary for an entrepreneur to take a step back and create an opportunity analysis before the business plan. The opportunity analysis is ideal for visionary entrepreneurs who are developing their ideas or for existing businesses that are re-positioning or investigating new markets.

Once you have created your business plan, it is much easier to create the remaining documents you need to successfully promote your business to investors. For example, once you have created your business plan, you can use information from it to create your investment summary. Next, you can take information from your investment summary to create your investor presentation. Each subsequent document that you create will become more focused and condensed, allowing you and your message to come across effectively and convincingly. We have provided additional information about documents typically included in investment packages below.

Opportunity Analysis

The opportunity analysis provides the market research and preliminary marketing, financial, and operational information necessary to decide whether or not to launch a new business or expand into a new market. If you decide to move forward with the project, you can use it to obtain a seed round of funding, create preliminary marketing materials, generate initial sales, and develop a complete business plan.

Business Plan

Your business plan is your company's operations manual. It enables stakeholders to understand the company's plan, direction and future potential. This is the primary and largest document that will be presented to potential investors. Your business plan demonstrates how you and your team plan to implement your strategies. It gives investors a solid feeling of what you are offering.

Investment Summary

The investment summary is a condensed version of the business plan. It can be compared to a resume in that it focuses on what your business has accomplished rather than what you plan to accomplish. It describes how your company has generated revenue, as well as the key relationships and partnerships that you have developed. In less than thirty minutes, investors should be able to identify the key aspects of your opportunity and decide if they want to continue with their due diligence.

Investor Presentation

The investor presentation is developed for conferences, venture forums and face-to-face meetings with potential investors. Your presentation should include key points of your business plan that emphasize the compelling nature of your investment opportunity. It should also feature "calls to action" of potential investors.

Avoid the "Quick Fix" Trap

In their excitement, entrepreneurs sometimes have a tendency to rush things. For example, many of them create "quick fix" investment summaries, financial models, or presentations before completing a full business plan. Their failure to think through the entire business plan often results in the inability to fully understand competitors, customers or how to run their business. These "quick fix entrepreneurs" end up scrambling to fill in the gaps in their business plans when potential investors request additional information.

A couple things may end up happening to quick fix entrepreneurs. First, the professional image that they have worked so hard to portray may be tarnished. Second, the trust that they have been building with investors may be damaged. Finally, they may end up spending valuable time re-creating their quick fix materials in light of new information.

It makes sense to create investor ready materials the right way the first time.

Byline

Tack Point Group is an entrepreneurial services firm that provides guidance and direction to entrepreneurs and emerging companies. Our market research, strategic planning, business plan creation, and investment preparation services assist in the development and implementation of successful businesses. For more information visit Tack Point Group at www.tackpointgroup.com.