Establishing a new project requires substantial financial expenditure especially large-size projects. Given today’s reality without an entrepreneur’s liquid capital for the possibility of financing, the possibility to establish and revive the project almost zero.
Sometimes the bank funding options do not fit the developer profile or the type of the project or the bank, Senior debt requests needed high equity. One of the solutions is to raise funds from investors to leverage developer equity as the bank requested. Many project developers are convinced that their project is excellent with great profitability, in their mind they see how they succeed in finding worthy investors, who will be happy and quick to pull out a checkbook. Reality is far from it and different from the far east to the west. The approach to investors mainly for “smart money” owners is a complex issue, requires early preparation. To do this successfully you will need professional business diagnostics and analysis, due diligence, feasibility testing processes, strategy, project’s team accompanying body, and more. The developer has a duty to prepare the presentation with the planning and prospectus in order to the foundations of the debt company and the investors that the project is profitable and secure for them to engage.
In this article, we will discuss the number of preparations the entrepreneur recommends to reach and persuade investors. The main points are:
- Executive Project Summary.
- Company profile, portfolio, CEO CV.
- Comprehensive market research on the project.
- Examining project failure points and risks where the investor may lose.
Executive Project Summary
The executive summary will help familiarize all the stages of the establishment, financial projections, and cash flow. It will show who the competitors are, what benefits the venture presents over competitors, marketing plans, sales, management, financials, and more. When the executive summary operation is a specialized and reputable company, the program will be perceived as more serious and will give the investor a right and a go-ahead. The more time is spent on the procedure, and the more accurate it is, the more entrepreneur will come to the presentations from a place of leadership, impressive and under control.
Company profile, portfolio, CEO CV.
Heavyweight has a company profile, who is the company, what the company knows to do, who owns it, who is the CEO and what his CV, how the company is managed, what the company’s cash flow, what projects have already finished, what projects it has successfully completed and what failed. The company’s business operations and its leading DNA.
Comprehensive market research on the project.
Before and during the preparation and writing of the executive summary and especially to get to know the industry in-depth, research can teach an entrepreneur how the market of the project, who the key players, who the direct and indirect competitors, the strengths and weaknesses of each competitor and the like. So is a knowledgeable entrepreneur to figure out what the strengths and weaknesses of his and his own project are in relation to the project, who the customers are, what the potential for the future of the market, and more. It is worth studying the market well before entering the competition if you want to know who are the leaders in the industry and more importantly why they are leading.
Teach project points failure
Investors today and especially the owners of the capital where they are and rightly sophisticated. Alongside each project presentation, which shows how much the project is potentially in the profit line, what really interests investors and the funding body are the failure points that can cause losses to all parties associated with the project. Underwriting and Risk management can come from a variety of options, such as political risk, insolvency, anticipated recession, and more.
Even if he has worked hard to create a project that will change the world and revolutionize, the bottom line is the project in the hands of the developer. And so the funding body and investors will want to know it well, and understand whether it knows enough, eager enough, responsible enough, professional enough, whether it is a leader and knows how to take the team and project forward. Is it worth investing in him and his project? The entrepreneurial experience, knowledge, connections, belief, and passion are the ones that pave the way for investment in a specific project.
We can utilize equity for mezzanine debt leverage as:
Liquid asset, Cash, BG/SBLC, financial collateral as(Blocked funds, CD’s, MTN, Bank draft, Gold and more), Sovereign guarantee, etc.