12.2. Funding Proposals
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Mention any conditional or firm funding commitments already secured.
For each element of funding, describe the preferred form of funding, amounts required, likely timing, security offered and desired terms, repayment schedules and exit options. Bear in mind the golden rule - he who has the gold makes all the rules.
For the benefit of prospective investors, indicate the likely equity funding required; range of the equity stakes on offer; exit routes (IPO, trade sale, buy-back etc.); board representation; and, optionally, make a stab at the projected returns on their investment. If presenting comprehensive funding proposals, be realistic when valuing your business and use more than one method of valuation e.g. net asset value, price/earnings ratio, capitalization/revenue ratio, industry yardsticks and so on. Take account of market sentiment/conditions, "going rates", maturity of the business and degree of risk associated with its plans. Of course, you may wish to withhold all specific funding proposals until you have met possible investors or lenders face-to-face and heard their initial reactions. In this case, this subsection would be confined to a description of funding needs and possible sources and forms.
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