Step 1: Preparing your Information Memorandum
Having an information memorandum does not guarantee that you will get funded. But it’s more or less guaranteed that you will not get funded if you don’t have anything to show to your investor. Your information memorandum should include:
Investor Pitch: A presentation covering various aspects of your business including but not limited to, Problem being solved, Market size & opportunity, Business Model, Revenue Model, Competitive Analysis, USP & Differentiation, Growth/Scalability potential, Fund Requirement & Utilization plan
Financial Projections: Financial analysis of the business including but not limited to past performance and 3-5 year projections for Traffic, Conversions, Profit & Loss, Balance Sheet, Cash Flow, Capex requirement, Human Resource requirement & Valuation.
Teaser: Reading the complete Investor Pitch and Financial Projections is a tedious task for an investor since he gets 100s of pitches every month. That’s why it is good to give a gist/summary of your business before you bombard him with details.
Step 2: Pitching to Investors
Once your information memorandum is ready the next step is to start hitting out to investors. It has been observed that it usually takes between 3 to 9 months to raise capital. Below is a typical fund raising cycle: