So many start up founders and entrepreneurs tell of their dream of “getting investors” to take their business off the page and catapult growth. From the outside, it sounds like the logical and easy formula: great idea + cash = success. If only it were that easy. Last year, working on a project that was taking too long to be assessed, the Investor advised that they had 2000 proposals but intended to invest in only 5 to 6. With odds so low, this is not a process for the faint-hearted; there are many more shattered dreams than there are champagne toasts.
Whilst this process can be brutal and unforgiving, there are some things you can do to increase your chances of not only funding, but long term success. From the outset, it is important to see from the investor’s perspective. They care about the investment opportunity, not so much about you personally. With such stiff competition, Investors will only give one opportunity, so it needs to be your absolute best when you present.
A well-researched and thorough business plan is the first place to start. In the assessment process, your proposal will be ruthlessly dissected, so it needs to be sound, based on actual data, review, research and calculations with all workings and assumptions clearly shown. Back-of-the-envelope calculations put into a pitch deck will fall apart quickly and make you look amateur. Once the plan is complete, you will move onto the presentation documents, which RH Projects are the experts in creating and then marketing to Investors. With thousands of hopefuls pitching their brilliant ideas, there is no room for error or shabby presentations – most won’t make it past the first glance.
RH Projects has a well-defined process that includes the preparation of:
1) Information Memorandum explaining the company and what it wants to do.
2) Dynamic financial model based on early feedback from the investment community.
3) Pitch Deck - a slide presentation of 12 slides which explains in summary form the proposal and what investors can expect.
4) One page teaser (Executive Summary).
Pitch Decks are crucial, even though they are often thought of as the only document needed, in reality they are just one in the suite.. The content of the pitch deck needs to be a slide on each of:
2 Our story
3 The problem
4 The market opportunity
6 Our solution
7 Our advantage
8 Our team
10 Business model
11 Financial status
12 The ask
Once the Director-level member of the investment fund receives the proposal, they will refer it to an analyst to prepare a preliminary report. Based on this report, three or more members of the investment committee will invite the client for a screening presentation. Most funders invite 6-10 candidates to present each month. Following the presentation (only nine minutes plus five minutes of questions), one or two are invited to proceed to the next round. Before the next interview, the analyst will do a deep dive into company’s information. The client will need to be able to prove they are able to deliver.
From the horse’s mouth: what the investor said.
Here is some real feedback from the investor on a submission that received funding:
a) Required information was provided in a logical manner that reflected the assessment process.
b) The application included a nine-minute video of the Founder/CEO and key team members presenting the 12 slides.
c) The client proposal stood out from the crowd, making it easier to say yes. This included a web-based landing page which has access to the teaser, pitch deck, information memorandum, video about the product or service and a video about the team delivering the product or service.
d) He knew the people who had prepared the information (so was already reliable) and believed what was said to be true, with extensive due diligence ultimately confirming this.
e) The information memorandum ensured that nearly all the information required for their assessment process (known in the industry as a deep dive) would be available in the data room which had been prepared for the preparation of the information memorandum.
f) The financial model was prepared in such a way that they could simulate changes in assumptions with relative ease.
About RH Projects
Projects RH is a proud alliance partner with The Business Plan Company, bringing insight and expertise from startups, business migrants and growing businesses to raise debt and equity. Projects RH give honest assessments of business proposals, prepare documents and applicants to seek equity and debt funding, plus are able to make some introductions to potential equity funders.
If you are ready for the next step please call Paul Raftery on +61 418 486 015.