Steps to Growth Capital Self-Study GuideStep 5

5.6 How to Build a Winning Proposal

Share the Workload

Preparing a top-notch investment proposal is a major undertaking. One person needs to be in charge of the task to ensure the consistency and quality of the writing, the calibre of information and the attractiveness of the packaging. Choose your best writer and organizer for this overall job, and give the person a title: Editor-in-Chief.

Delegate the writing of detailed sections to others in the organization who know the subject areas well. Give them firm deadlines for completing their research and first drafts, and for getting them in to the editor. And set a deadline for the editor for pulling all the sections together and giving the complete document a consistent look and style. To help you hand out these writing and editing tasks, use this Proposal Assignment List.

Reflect on Your Reading Experience

Have you been on the receiving end of written proposals other people submitted for your consideration? Some of those proposals probably engaged your attention and persuaded you. Others may have ended up on the pile of documents you intended to read but never really got around to. What's the difference? Your experience as a reader of these documents can help you keep your proposal from landing in the slush pile.

Pay Attention to the Language and the Look

The language — even in the technical sections — should be written plainly so that investors unfamiliar with your business will understand your message. Use the active voice. And remember that your aim is to persuade investors. Check for spelling, grammar and math errors.

Obtain Feedback

Ask outside advisors, especially those who have successfully raised money, to review and comment on your investment proposal. Ask a lawyer to give you advice regarding the impact of the disclosure of certain items and legal compliance with applicable provincial securities legislation. Seek an accountant for review on your financial projections. Ask others to comment on the presentation of information and readability of the investment proposal.

Ensure Confidentiality

The product description, market and financial information would be very useful to your competitors, saving many hours and thousands of dollars required for gathering the same information. Your treatment and handling of the proposal should reflect its value to you and to your competitors.

You'll want potential investors and anyone else advising you on the investment proposal to treat it in a confidential manner. Indicate on the cover of your investment proposal "confidential" and account for each copy in circulation.

Consider having each party receiving a copy of your investment proposal sign a confidentiality agreement. This agreement would:

• prohibit the person reviewing your investment proposal from disclosing the information contained in the document to other parties not covered by the confidentiality agreement; and
  
• protect your company if your investment proposal contains sensitive information that is vital to potential investors but that, if divulged to others, could hinder your company.

Have a lawyer draft a confidentiality agreement to ensure it is consistent with applicable provincial and federal statutes and regulations.

Tip: Convey a Professional Image

Think back to an earlier activity in this Step where you examined your own standards for the appearance of proposals. You probably considered such aspects as covers, binding, appearance of the text, and so on. These and other factors determine whether your reader, the investor, gains the impression that your company is professional. This checklist will help ensure that you convey a professional image.

• Use a clear, legible font, and a high-quality printer.
• Make sure your company name, or founder's name, and address are on the proposal.
• Prepare a table of contents. Insert an index/tab for each section of the investment proposal for easy reference. Make sure all major topics, figures, charts and exhibits are properly identified in the table of contents.
• Use colour, charts, graphs, diagrams and other visual aids to enhance the readability and appearance of the document.
• Package the plan in a loose-leaf binder or spiral-bound binder to facilitate revisions of certain sections. Also, indicate the dates on all revisions to ensure that you are always dealing with the most recent version.
• Insert a glossary of terms at the end of the investment proposal. The glossary will be useful, particularly if you're presenting technical information.
• Package appendixes appropriately (they should be reproduced, bound and covered in the same manner as the body of the investment plan).

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