Does it Fit the Investor’s Parameters?

 

Every investment group has their unique parameters that each new investment idea must meet in order for thorough and complete evaluation.

During the evaluation process, the investment group will apply their methods to assess the downside and upside potential.

Each potential investment is likely to have different parameters for success.

Solution

It is critical to convey the details of the assumptions inherent in industry and company forecasts when communicating your story. This is commonly overlooked, not perceived, or taken for granted. When you are so close to your project, it is easy to make assumptions that need to be scrutinized and clearly communicated. Clarity goes a long way. Some areas that are frequently overlooked include:

What are the underlying components supporting your revenue and margin assumptions? Can it be validated with public company analyses? What drives the revenue ramp up?

Have you factored in any future competition? And how is that done, to what extent, what is the impact?

If there were less capital available, what core components of Use of Funds could succeed?

Addressing these items clearly enables the investor to:

(a) better understand your orientation, team skillsets, problem solving capacities

(b) assess the consistency of your strategy with your presentation

(c) enable the investor to easily make their adjustments and quickly know the answers to their internal “what-if” scenarios.

 

A clearly delineated company forecast, competitive assessment, and industry discussion are critical.

 

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