Preparing Your Business for Investors

What investors want to see

An investor asks three simple questions: How big is the opportunity? Can this team capture it? How much risk am I taking, and what do I stand to gain? The documents you prepare must answer all three clearly, with verifiable figures.

• Business plan — the market, customers, product, competition, sales strategy, and team.
• Financial model — projections of revenue, expenses, profit, and cash flow over 3–5 years, with explicit assumptions.
• Financial statements — balance sheet, income statement, cash flow statement; ideally audited by an independent auditor.
• Pitch deck — a short presentation that tells the story of the business and what you are asking investors for.
• Legal documents — articles of incorporation, key contracts, licenses, property rights.

The financial model and the pitch deck

The financial model does not have to be complicated, but it must be consistent. Start from assumptions you can explain: how many customers, what average price, what unit costs, what fixed expenses. Build three scenarios — conservative, base, and optimistic — to show that you have also analyzed the risks.

1. The problem and the solutionWhat real need you address and why your product addresses it better.
2. The market and customersWho buys, how large the segment is, and how you reach it.
3. TractionSales, repeat customers, contracts — evidence that the business works.
4. The business model and key figuresHow you make money, margins, track record, and projections in brief.
5. The teamYour experience and that of your colleagues, including advisors or mentors.
6. What you are asking for and how you will use the moneyThe amount, the instrument (shares, bonds, loan), and exactly where the funds will go.

Business valuation, made simple

Valuation answers the question "what is the company worth?" There are complex methods, but for an initial discussion you can use a profit multiple: the company's value is estimated as its annual profit multiplied by a factor that depends on the sector, growth, and risk. The result is a starting point for negotiation, not an absolute truth.

Due diligence: the check before investing

• Set up a "data room" early: a folder (physical or digital) with all the documents, organized by category.
• Make sure there are no overdue debts or undisclosed lawsuits; if there are, present them openly, along with your plan to resolve them.
• Make sure ownership of the brand, equipment, and key contracts is in the company's name.
• Prepare answers to the tough questions: what happens if you lose your largest customer?