- An entrepreneurial/managing team – background, experience, and record of business owners and their personal qualities (i.e. dedication and enthusiasm), the range of skills / the function of a managing team
- A strategy – the overall concept and the business strategy
- Processes (convenience of business functioning) – how is a business organized for production and a delivery of products (i.e. matters related to the production process)
- Product/service – the nature of product or service, in terms of concepts, uniqueness, and innovativeness. This also includes quality, standards and performance, appearance, style and aesthetic appeal, ergonomics, function, and flexibility of a product or service.
- Market – it’s potential and growth, demonstrated market needs, a level/a nature of competition, and barriers to its entry.
- Financial considerations – it includes three aspects:
- a) financial business structure (for example, costs and prices, or financial revenue projections)
b) capital value / business values
c) a probable rate of return and exit options
- Investor fit – includes two elements:
a) the relationship between investors’ investment, skills, and knowledge of the industry, market, technology, etc…
b) investment possibilities, and investor’s preferences (i.e. is the industry, market or something else place where the investor wants to be)
- Business plan (BP, investment study, evaluation of projects/business/brand)
Different funders will look for different types of information in a business plan, and they will have different expectations about which information needs to be included, while they will also examine a business plan in different ways. Their decision concerning whether they will access financing or investing will also be based on different weightings of the previously stated criteria.
Therefore, entrepreneurs and their consultants must be aware of the needs of possible adjustments of financing suggestions, depending on whether they ask for financing from the banks or venture capital funds, or they are seeking funds from business angels.
The process of attracting venture capital begins with the preparation of documentation in the complementary fit, according to both the type of a project and the financing channel. Depending on the established need for a set of documentation, entrepreneurs prepare a business plan, an investment study, or an assessment of the value of the project, which is then sent to private capital companies. The business plan is the main tool that is used by an investor for the assessment of business chances.