To support entrepreneurs registered on VC4Africa we have created an easy to use format for the financial plan. In a series of articles on VC4Africa, financial coach Arnout Kroezen goes through the key points. Also see the previous posts with the introduction, steps 1 & 2 (costs & revenue) and step 3 (writing the summary). Below Step 4: how to put down the request for finance.
Today we take a closer look at the investments made so far, secured investments and the request for investment. See the standard format below:
In this table the needed amounts are presented. Here again, it is important to support the figures with an introduction and short, clear, and to the point explanation.
Questions an investor will ask:
What investment has been made in sweat and what are the real capital investments made already?
What investment is already secured for the next months? By whom/how?
What investment (rounds?) are still needed? Will this be in my investment range?
Will these investments be enough or is it likely to need additional investments?
What would a possible deal look like? Equity/debt/percentages? (You can bring this up later as well)
If the initial look at the figures is satisfying for the investor they will most probably want to follow up and want to see more detail and possibly review some of the research that was done in putting the projections together. Be prepared to explain the detailed calculations, prices (how you determined the prices) and the calculations that drive number of sales. If it takes too much time to understand how the projections are built, or it takes you too long to respond to questions, the investor might lose interest.
VC4Africa welcomes you to share your experiences and insights in the comments below! Also see the previous posts with the introduction, steps 1 & 2 (costs & revenue) and step 3 (writing the summary). Do you have questions? Just ask them below in the comments!