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Source Money Through An Investment Prospectus

Raising money for a new business can be a very challenging task. Even when you have an idea that you think is great, there are chances that you will have to do some running around before you can get hold of someone who is willing to give you financial backing. Fortunately, there is money available in the form of angel investors. These investors have the money to invest, but are always on the lookout of a good idea that can help them get good returns on their investment. 

Though largely undermined, the value of a good investment prospectus cannot be stressed enough here. If you ever want to raise money for your business, the first move should be to put together a concise, yet informative prospectus. 

What is an Investment Prospectus?

An investment prospectus is simply a document which carries all the details that you think a prospective investor should know. Ideally, a prospectus should carry a brief resume, detailing your education, training and professional background. This can tell the potential investor a lot about your chances at success. 

Include a list of assets and any loans that you may have taken. Also attach a brief history of how you have been able to pay these loans off. Along with this, you will have to add a detailed document, explaining the kind of money you need and the exact use of it. If you are sourcing the funds for a new start up, include your business plans, projected costs, research on the marketing, anticipated figures of the income and your sales pitch. However, if you are sourcing money for a company that has already been established and is running, bring with you the documents that detail the financials of your company for at least six months. Also include a plan showing how the additional money will help boost your profits. Also make a brief statement about how your business, service or product is unique and how it stands apart from the others that are already in the market. Be sure to also mention any future opportunities of growth and expansion. 

The prospectus should ideally also mention the exact benefit that the investors will have if they invest in your business. The investor will want to know the returns that can be expected, and more likely, what percentage of interest you wish to pay. The terms of repayment and whether you also offer a percentage of profits or a position in the board of directors, should all be listed out in your investment prospectus. 

An investor can make more money by using their own money. However, they are more likely to invest their money in businesses where the risk is high. The business plan should be interested and the returns promised, of value to the investor. You can persuade the investor to invest in you if you manage to show the long term benefits to the investor. To enable this, you may have to spell out all the details and attach proofs in the form of plans and marketing researches. 

How to Reach Angels?

Once your investment prospectus is prepared, the next logical step is to start looking for the investors. There are newspapers and national publications that carry ads for such investments. However, placing an ad in such a publication or a newspaper can not only hurt your image, but also invite the wrong kind of attention.

Tips for Preparing Your Investment Prospectus

Since your investment prospectus lists out details of your company and other commitments which can have legal implications, it is always bets to get an attorney to go through the document before a final decision is taken. The attorney can make the necessary amendments and also give you pointers on what other things can be added to the investment prospectus in order to spruce it up. 

You can meet various investors and discuss your investment prospectus with them. Professionals like doctors in your area are usually part of professional networks, and may be able to help you. You can also meet people from any small business consortium that may be present around your locality. They too can be approached for getting inputs on your investment prospectus. 

In most cases, your investment prospectus will speak louder than you and therefore it is only right to spend time on it to make sure that what you are sending across to potential investors, captures your thoughts and your ideas succinctly and conveys them to the investors in an accurate manner.

Angel investors are usually interested in getting a position of power in your company. You can make them a silent partner. This way, not only do you get the investment and backing required for your venture, but also gets advice from your investor, who may have more experience in the field than you. There are many other reasons why keeping an investor close to you is important. To further expand your business, you may need extra capital at a later stage. At that stage, your investor may back you up, even if you hadn’t mentioned this scenario in your investment prospectus. 

If the investor cannot back you up with their own money, they can introduce you to others who can give you the additional help. Investors also often do not hesitate in guaranteeing the businesses they have invested in, to the banks. This can help you get an institutionalized loan, allowing you to expand your company further.