Is there a form or preferred format for creating an equity proposal to a potential investor?

ByTim Berry

Opinions expressed by Entrepreneur contributors are their own.

我创建了一个业务简介。这是一个three-page, boiled-down version of our business plan that lays out the company, opportunity, market, management and projections. I drafted a use of funds page that has the equity offer in it. I'm wondering if that's the proper business format or whether that page should be offered once an investor has indicated interest?
Don't worry about form or format. Worry about valuation. To calculate your valuation, divide the money you're asking for from investors by the percentage you're offering to the investors in return.

Does it hold up? Is it a good deal for them? That's what matters.

For example, if you offer half of the company for $250,000, you're saying that your business is worth $500,000 total. Is it? Does it have a track record? Management team? Defensible product or technology?

If you have a good deal to offer, investors will be interested.

And if they are interested, they will want to see your business plan. That's where you make real commitments. The plan should include a lot more than you can put into a three-page document, such as projected income, cash flow, balance sheet, use of funds, stock positions and so on.

Tim
Wavy Line
Tim Berry

Entrepreneur, Business Planner and Angel Investor

Tim Berry is the chairman of Eugene, Ore.-Palo Alto Software, which produces business-planning software. He foundedBplans.comand wroteThe Plan-As-You-Go Business Plan, published by Entrepreneur Press. Berry is also a co-founder ofHavePresence.com, a leader in a local angel-investment group and a judge of international business-plan competitions.

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