by Ryan Headley

Created on: May 12, 2008   Last Updated: June 11, 2008

The idea of presenting your prospective business venture to investors may seem nerve-racking. You may even experience some trepidation and begin to ask yourself whether you truly have what it takes to turn your idea into reality. Stop here. Regain your confidence. If you follow some basic rules you will get through it successfully and probably leave a lasting impression on the potential investors.

Entrepreneurs pursue opportunities regardless of the resources currently at their disposal; however most entrepreneurs come to a point when they can no longer bootstrap, or FFF (Family, Friends, Fools) funding is no longer sufficient. Whether you're in the seed, start-up or even first-round stage, you must pay attention to several factors in order to lock down investment capital.

Draft a well-written business plan

The biggest mistake among entrepreneurs when writing a business plan is the lack of attention paid to the executive summary. Most investors spend no more than a couple minutes looking at your business plan. If you can't capture them in the first thirty seconds with your executive summary, you lost them.

The executive summary is the most important component of your business plan and serves as a capsule of the entire detailed layout of your idea. It is the attention getter, and great time should be dedicated to engineering a harmonious balance between excitement-evoking creativity and critical business perspective within the executive summary. For instance, mesh together the excitingly unique attributes of your idea with your competitive advantages and market positioning. In other words, grab the attention of your audience with your fresh idea and show them exactly why it will work.

The next most important component of your business plan is the financial section. If you have not launched your business yet then your financials will be based on projections, and these projections will be based on assumptions. They will not be precisely accurate, but make sure they're honest. Whatever you do, do not be too optimistic; it makes you look like an amateur. It's okay to show a loss on your pro forma P/L statement, but if you show unrealistic profits from the jump, and out of control sales projections, it shows a flaw in your business sense and the investor will walk away immediately. A naive sense of optimism must be deflated from the get go. It is much better to prepare for everything throughout the business plan and show that you can assess risk, from understanding all

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