Generating the Appropriate Investor Interest

 

The Problem

Institutional and professional investors are busy people and receive many investment proposals.

Most proposals are thrown out before they are thoroughly reviewed.

And others are discarded due to unknown reasons, commonly referred to as “Does not fit our parameters.”

 

The Solution

The keys for your materials to stand out – be succinct, quickly convey the appropriate parameters to attract the appropriate entities.

Superb summaries communicate far more than the items discussed – clarity, analytic and conceptual process, focus, knowledge, expertise are some of the intangibles conveyed with superb summaries.

And these executive summaries need to be backed up with a Business Plan and Presentation Materials. Most situations also require a PPM and an Independent Valuation Analysis.

The Business Plan and/or Independent Valuation Analysis must provide the details and be readily accessible. What may seem ‘easy to access’ to you is different from a potential stakeholder that is not as familiar as you are with with your business. It is critical to have someone outside your company to create or review these materials for honest feedback before you ‘go to bat’ with them.

 

How to Succeed

Create a one-page synopsis that addresses the investor mindset.

Create a longer Executive Summary (2-3 pages max) that has more details.

For verbal communications, need the “elevator pitch,” the one-minute and three-minute summaries.

Different audiences (investor, partner, lender) may require different versions of executive summaries. Executive summaries likely to change over time.

Finally, the details that potential stakeholders need to perform their own analysis is required. This cannot be overstated. You can expect that your materials will be dissected to fit the potential stakeholders view. You improve your success rate by clearly providing the appropriate metrics, assumptions, the steps in your analysis process, and data sources.

 

Why this Works

If investors have to go through several pages of materials before they understand the potential benefits of the investment, you will likely loose their interest. If you lose their interest, your focus and expertise will be questioned.

A succinct explanation enables an investor to decide quickly if they want to look further, helping them in their busy day. Investors are continually looking for reasons to say “No” to a new opportunity because they see so many. Best not to have the organization of materials or the conveyance of the story be the reason for the “No.” With well formulated Executive Summaries, along with the additional materials, you will spend your time on developing relationships that have a high probability of being mutually beneficial.

Many proposals appear wonderful after initial meetings. A great rapport and a good high level understanding occur, but for some reason progress gets stalled. Many times it is due to sub-par details, or a lack or thoroughness in the Business Plan. The people behind the scenes that you may never meet can say “No” to your proposal. A well designed and prepared Business Plan and/or Independent Valuation Analysis addresses this.

 

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