Investor Business Plans

Investor business plans are the main document that investors will consult when deciding whether to invest in a company or not, based on the fundamentals presented within the document. These are plans which are distributed as part of the fundraising process, to give investors confidence in the company they are investing in, and therefore to encourage more investors to bring funds to the table as part of the process. 

The aim is to provide investors with the fundamentals to get involved in a company, whilst also getting them emotionally invested, excited about the potential that this new venture could entail. The average business plan should be around 15-20 pages. In the past, the average plan was anywhere from 40 to up to 100 pages, and very few were fully read as a result. With a shorter, more concise and concentrated business plan specifically tailored by Swordblade for investors, investors are inclined to scan over and read the plan, to feel more at home with the pitch being presented to them.

The major questions are ‘why’ and ‘how.’ Why now? Why this? Why you? Why them? How will you make money? How will you get customers? How will you grow your business out? At Swordblade, we aim to answer these questions before an investor even has the opportunity to ask them, to demonstrate the preparation and expertise of the clients we represent, as they move to make their business public.

What are Investor Business Plans?

Investor business plans look at the business from an investment perspective, emphasising metrics like return on investment (ROI), the leadership and capabilities of the company, funding’s expected usage, and usually proof of concept or viability of the products and services a company is issuing. This all helps an investor to be able to manage risk, and understand what is in it for them, based on projections from the company and advisers. 

Investor business plans are useful for several different businesses outside of attempting to woo investors and financiers:

The plans are useful for those seeking investment from anyone, venture capitalists to friends and family or angel investors. They help create a good image and basis for investors to get involved – due to the professionalism and appeal of fundamentals, in-depth research and accurate numbers for investors to create their own picture.

What Constitutes an Investor Business Plan?

There are many different sections to an investor-ready business plan. Business plans are created by advisers (like Swordblade) to demonstrate to investors the expertise, vision and numbers behind the venture – among other intangible factors.

A non-exhaustive list of the elements of an investor business plan:

Any other background information would normally be added to the business plan to help the investor to make a positive decision, alongside other quality of life additions like cover and contents pages.

Wisebusinessplans.com demonstrate an excellent broad example of what an investor business plan should contribute, including specific issues to be included at specific points in the plan. Naturally, this would be tailored to the needs of a specific client and altered if necessary, you can find those resources here.

Key Takeaways:

Market: Investors need to have an understanding of the target audience that a company’s product or service is aimed at. In defining the target customer base, investors can see the market need for your service or product, particularly when backed up by details of a projected customer base alongside an overall market analysis.

Marketing Plan: This plan demonstrates the competitive advantage of the corporation for investors, including customer base, market size, demographics, growth prospects and any trends that investors should be aware of. This is where distribution, promotion and pricing strategies are outlined, alongside future growth, market share and other trend influences. 

Product/Service Description: The offering you are bringing to investors is fundamentally rooted in the product or services a company is offering. Detailed analysis of the product being offered to customers and the benefit it brings, alongside projections of customer retention should be outlined to encourage investors about the potential of a company. 

Leadership: As demonstrated by the surge in SPAC mergers across both sides of the Atlantic, there is significant and rising interest in investing not only in a product, concept or ROI figure but in the leadership team at the top of a company. A good investor business plan will demonstrate the capability of a corporation’s board of directors, and their experience and expertise in the industry so that investors can take confidence that their money is in good hands.

Different Investors’ Plans:

Investor’s business plans differ in their emphasis depending on specific targets for a company. For example, venture capital business plans and angel investor business plans require slightly different approaches.

Venture capital firms provide funds to start-ups, with one eye on the future to gain a return on their investment. To attract VC firms, the business plan for investors should be tailored to demonstrate the expected return on an investment and the long-term strategy of the company for significant expansion and growth.

Angel investors are usually wealthy individuals who are willing to invest in a, usually small and relatively new, business opportunity. Angel investors aim to guide an entrepreneur in their business world. Typically, therefore, angel investors would be looking at the power team and leadership behind a venture, as well as proof of concept as to how they could grow a business. The plan would reflect the intention to create this sort of relationship, by emphasising leadership and the connection of an entrepreneur to the industry itself.

Next Steps

If your company is planning to go public and raise funds on the capital markets, we look forward to hearing from you.

The easiest way to get started is to request a free evaluation. By providing minimal information about your company and capital needs, we will be able to provide you with a quick assessment by email. In most cases we can tell you if your business is ready to go public, or not yet.

We’ll also let you know if we think that Swordblade & Co are a good fit for your flotation plans, and anything else that we may think can help you.

Alternatively, if you are ready to talk in depth about floating your company, we recommend you arrange a paid consultation with one of our partners. It can usually be scheduled within a few days and is the fastest way to get detailed advice.