investment proposal

In this article, Aditya Arora who is currently pursuing Diploma in Entrepreneurship Administration and Business Law from NUJS, Kolkata, discusses how to write the perfect investment proposal?

How to write the perfect investment proposal?

Investment Proposals are slightly less formal than a business plan wherein you can provide the details of your venture and the way you intend to utilise the investments provided by the investor in order to achieve the desired financial results. Therefore, it is imperative to draft the investment proposal while keeping in mind the concerns that the investor may have while investing his money in a new venture.

What is a Business Proposal?

  • A business/Investment proposal is a well-drafted document presented to the investors for pitching in investments by outlining the concept of the business and how you plan to make money out of it.
  • The point of difference between a business plan and an investment proposal is that the former consists of an offer of a product or a service whereas the latter is an investment proposal in the form of a formal statement comprising of business goals while emphasizing on return on investment.
  • In an investment proposal, the main highlight of the document is the possible problems in the business along with the proposed solution relative to the business and industry.
  • While drafting an investment proposal, the first and foremost concern of an investor will be the return on investment. The only assurance that they seek for is the money that they get in return of pitching in an investment, which can done by drafting a convincing proposal.

How to Begin Writing a Perfect Investment Proposal

In order to make a well-drafted investment proposal, it is very important to have a plan prior to carving out the actual investment proposal. A prior research is important along with sketching an outline, making spreadsheets and studying other business proposals.

According to the Forbes Magazine, it states that “significant amount of time need to be dedicated while drafting a coherent and persuasive proposal.” It further states that “you should plan to spend weeks, if not months, perfecting it.”[1]

Merely copying other proposals will not render any success with the investors as the investors seek for specific action plan and not the general business idea. This also means that the investor you plan to present your business proposal should be relevant to the nature of your business.

Getting Started with the Investment Proposal

The most important thing to keep in mind is to develop an understanding of your own business before pitching in the idea to the investors. Along with the basic understanding, what you also need to know is the market and the competitors. A thorough and careful research on the target industry along with a detailed plan of the proposal could solidify your foundation which builds the confidence in the investors. At the end of the day, a careful thought out summary of the investment proposal is the key to raise money. For every claim made by you to the investors, they would expect it to be backed with research.

At the end of the day, a careful thought out summary of the investment proposal is the key to raise money. For every claim made by you to the investors, they would expect it to be backed with research.

Last but not the least, it is important to develop an understanding of the nature of investment you seek to raise as there is a clear nexus between ‘what you want’ and ‘how you want.’ Developing a flawless plan while specifying the money already invested in he company and how much more is required to go the next level will represent the investment proposal adequately. After all, even if the business idea is weak but is backed by solid research and is well thought of, its likely to receive more interest than expected.

What to Include in a Business Proposal?

The essence of the investment proposal should be to return the money back to the investors through your business. The main area of concern for an investor is the revenue model of the business. If you could state loud and clear how they are going to make money back and how much, this will put you at an advantage.

Executive Summary of Your Business

Start with a brief profile of your business which should be around 2 to 5 pages long. This will be a summary of the entire proposal that covers all of the pressing concerns including “what is it? How will it make money? Where will it be located? What investment is required? What will the investments be used directly for? Who is running the business and why are they the best person for the job? What are the short and long term business objectives?”

Overview of the Company

This section is particularly relevant if you are seeking investments in your business which is already in operation. If it isn’t, you may give a brief snapshot of the structure of your company, including financial statistics, variety of products or services offered, and any important history of the business that may concern or may be of relevance to the investors.[2]

Products and Services

This facet of your business plan can gain attention from investors and impress the business’ purpose. Once you have expressed what your products and services are, it is important to discuss the critical information including

What is your current inventory / future proposed inventory? What are your production costs per item? What is the potential to lower these costs and what are the consequences of doing so? What is the retail price of your product or service and how did you come to this price? Is it relative to comparable products? Is it one of a kind?

A brief sales forecast that is realistically derived from past sales or market research for the next 3 to 5 years based on your current business plan can be provided. Who are your suppliers and what are their credit terms? Where are your suppliers located? Have you worked with different suppliers in the past? Use of Funds?[3]

As previously stated, describe how investors’ money will be used to jumpstart your business. Once the investors are taken into confidence, the next course of business can be taken from since they are the expert in the market. It doesn’t have to be a five-year plan for the business, but since you’re asking for some investments, its better to provide them details on how you will spend it. Investors will want to know and possibly weigh in on your plan for their money.

Other things to keep in Mind

Having been elaborated above the most important aspects of an investment proposal, it is also important to know “Professional investors, such as venture capitalists and serious angel investors, do not have long attention spans.”[4] Therefore, you always have to begin with the most important information and keep your proposal and presentation brief when including these factors suggested by investors and business people alike.

Detailed marketing plan tailored to your business based on research of competitors and industry

The company’s management and staff; why they are in the position they are in; what qualifies them for this position? Owners and shares of the proposed business equipment, facilities, and technology currently being used, as well as future additions that may need to be made[5]

Financial Forecast, Financial references, Investment Exit Strategy

Forbes contributors strongly emphasize the importance of your exit strategy. This is the bottom line of “how the investor will make money (aka “the exit”) from investing in your business proposal.” It comes on high recommendation that you prepare to answer the obvious questions investors will have at the end of your pitch including how their investment will be monetized, which may include licensing agreements and strategizing a sale of your company to another, larger company.[6]



[2] How to Write A Killer Business Proposal and Attract Investors, available at:

[3] IbId


[5] ibid


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