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Part III: Securing the Capital You Need > Elements of a Venture Proposal

Chapter 10. Elements of a Venture Proposal

Purpose and Objectives:—a summary of the what and why of the project.
Proposed Financing—the amount of money you’ll need from the beginning to the maturity of the project proposed, how the proceeds will be used, how you plan to structure the financing, and why the amount designated is required.
Marketing—a description of the market segment you’ve got or plan to get, the competition, the characteristics of the market, and your plans (with costs) for getting or holding the market segment you’re aiming at.
History of the Firm—a summary of significant financial and organizational milestones, description of employees and employee relations, explanations of banking relationships, recounting of major services or products your firm has offered during its existence, and the like.
Description of the Product or Service—a full description of the product (process) or service offered by the firm and the costs associated with it in detail.
Financial Statements—both for the past few years and pro forma projections (balance sheets, income statements, and cash flows) for the next 3–5 years, showing the effect anticipated if the project is undertaken and if the financing is secured (This should include an analysis of key variables affecting financial performance, showing what could happen if the projected level of revenue is not attained).
Capitalization—a list of shareholders, how much is invested to date, and in what form (equity/debt).
Biographical Sketches—the work histories and qualifications of key owners/employees.
Principal Suppliers and Customers
Problems Anticipated and Other Pertinent Information—a candid discussion of any contingent liabilities, pending litigation, tax or patent difficulties, and any other contingencies that might affect the project you’re proposing.
Advantages—a discussion of what’s special about your product, service, marketing plans or channels that gives your project unique leverage.
Source: A Venture Capital Primer for Small Business, Management Aid # 1.009, LaRue Tone Hosmer, U.S. Small Business Administration, 1987.

  • Governmental Agencies (e.g. Small Business ). The S.B.A. and other government agencies make funds available to small businesses, but there are often strings attached. For example, you may not qualify if you are able to secure financing through a bank, or you may find the required periodic reporting to be too bothersome. Other key distinctions about government loans involve the political criteria sometimes used in the evaluation of loan applications. For example, Merrill and Sedgwick [*] maintain that your chances for obtaining a loan are enhanced if the request is a small one, if you or your partner is a female or minority, or if your business will be located in a depressed neighborhood. For more information about Small Business Administration loans, call the SBA answer desk at 1–800–368–5855.

    [*] Source: The New Venture Handbook, Ronald E.Merrill and Henry D.Sedgwick, American Management Association, 1987.



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