Institutional business plans are venture documents that seek to raise capital through institutional investment houses or an angel network that functions primarily to capitalize new and existing businesses. The institutional business plan will invariably have a five-year financial projection (as opposed to the more basic three-year forecast required by the SBA or a bank) along with a proposition statement that provides investors with a sense of their likely ROI or up-front ownership share based on your projected profits within five years. An investment calculator and a ratios table are also commonly included, and unless you haven't thought that far ahead, it's prudent to include a thoughtful exit strategy provided you know what those scenarios look like. Institutional investors want to see that you know:
• How your products/services fit into the larger market
• Who your customers or clients will be
• How the industry has fared in recent years
• What your best bets are for marketing/advertisement
• What your management team lacks and how you can fill the gaps
• How you'll allocate the capital you get
Whether you are a first-stage or second-stage business, institutional business plans for funding should give a clear picture of how you will spend the capital and what return it's likely to yield. This means completing an entire pro forma including the use of funds, revenue forecast, break-even analysis, cash flow, profit and loss, balance sheet, and a sensitivity analysis for each of the five years modeled. The competitive assessment should be thorough and meaningful and you should leave no stone unturned in the market analysis. MasterPlans has worked with businesses trying to raise institutional funds ever since 2002. Our 10,000 custom business plans have been presented at major venture forms all across the country. Call us today to learn how we can help. (877) 453-2011.
