The first thing any investor will want to know about your company is its potential for growth within its market. That means you must find data that reveal the presence of a large, expanding market for your company’s service or product. Furthermore, the data must prove that your product or service is something customers need, not just want.
Depending on the nature of your company, your market research can come from various resources: reports from trade, educational and governmental organizations; reports issued by independent research institutions operating in your sector; blog posts, articles and books written by respected leaders in your industry; and other secondary sources. Conducting customer surveys and interviews will give you a primary source of data.
The Qualifications of Your Management Team
A highly qualified management team often makes a company a much stronger candidate for funding than it would be without such a team. Investing is often a case of betting on the jockey rather than the horse.
Thoroughly research your management team’s past accomplishments. Be prepared to give a detailed explanation of your team members past successes in growing successful companies. In addition to specific, relevant details, you can use indirect evidence of your team’s ability to manage your company. The possibilities include their educational background, awards and recognitions received, and experience in similar positions, even if in different industries.
Realistic Exit Strategy
Your exit strategy could be an anticipated merger or buyout, or it could be an anticipated initial public offering. Either way, it must be realistic and credible.
Investors can become distrustful if you claim your exit strategy is a sure bet, so tread carefully while you’re describing it. Simply explaining how similar companies have achieved liquidation events by using an exit strategy similar to yours will only make you look naive. Instead, examine case studies and provide hard facts in your business plan.
You should also research and develop profiles of companies that have bought companies like yours in the past. Demonstrate that these companies will have strong reasons for purchasing or merging with your company.