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суббота, 13 мая 2023 г.

How to attract investments for your business


  Action plan.

Attracting investments is an important point for many businesses.

  Investors can help finance various projects, business expansion and increase the company's profits.

However, in order to attract investment, a number of preparatory steps must be taken.

Preparatory stage:

1. Registration of company assets: before attracting investments, it is necessary to make sure that all assets that are used or will be used in the business are registered in the name of the company.

2.Updating corporate documents: all important corporate documents such as articles of association, contracts, licenses, etc. must be checked and updated.

3. Conflict resolution: eliminate the possibility of conflicts in the company. This will help convince potential investors of the stability of your business.

4. Realistic indicators: bring the indicators reflected in the investment presentation in line with reality. If there is no presentation or business plan, these documents will need to be prepared.

5. Compliance with the law: eliminate violations of the law and the rights of third parties, including the grounds for such violations.

6. Company valuation: try to determine the real value (valuation) of your company, do not underestimate or overestimate it. Get an independent review.

7. Determination of the source of financing: determine which source of financing suits you best: a loan, an investment loan, a convertible loan, an equity interest in a business, or a sale of a stake in an existing business.

  Working stage.

  An example of raising funds in the amount of $1.5 mln.

  Business in the field of trade. Funds are needed to develop sales in the EU countries.

Key activities to seek funding:

1. Preparation of a brief presentation (investment proposal).

2. Preparation of a package of necessary documents for the enterprise.

3. Preparation of a business plan.

4. Preparation of a plan to promote the project to the investment market.

5.Preparation of an investment memorandum (your own version is possible).

Important !

If the project initiator has no experience in attracting external financing or there are no specialized specialists in the staff, it is necessary to use the services of third-party consultants specializing in investment and business consulting. Saving on consultants usually results in wasted time or financial problems in the future investment process.

Below are the optimal budget for the organization of this work, the cost of services may vary depending on the complexity of the tasks, the level of the consultant or the company that deals with these issues.

As a rule, private consultants have a much lower service bill than well-known firms.

Possible costs for the development and maintenance of the project.

1. Investment consultant - 2000 $ / euro per month. (+ bonus 1.5 - 2.5% for large amounts from $ 10 mln, and for investments up to 5 mln. from 3-5% upon receipt of investments).

  Some well-known corporations that are interested in key or significant players in their team distribute part of the shares of their business among their top managers, and in the case when the initiator is interested in strengthening the project team, he can invite an investment consultant to the team (shareholders) of the project.

  All these issues are considered as a separate subject of mutual agreements.

2.Preparation of a professional business plan and project teaser (from 1500 - 5000 $).

*** prices depend on the qualifications of the contractor and the volume of documents being developed.

3.Expenses for packaging and presentations (one-time).

Website, presentation, layouts of advertising posts - from $ 1000 - $ 2000.

4.Expenses for promotion and advertising (profile sites, social networks, direct mailings to specialized organizations, participation in forums, etc.).

Min. 1000 $/month Max-5000$

5.Audit of the project - 1000 $ -3000 $.

6. Business valuation from $1000-$5000.

Terms of investment search min. 3 months. -12 months

Approximate preparatory budget for the first 3 months. may amount to

  about $ 15,000, which is approximately 1% of the capital raised.

From practice, packaging and search costs can range from 1-5% of the investment amount.


The above expenses and the list of the above activities do not guarantee a 100% result, however, without these conditions, the chances of attracting funding are practically absent.

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