Investment Process Print E-mail

It is a process that begins with your idea of the necessity of capital investment and ends with the performance of this capital investment. Of course, this is the ideal variant because you may receive a refusal or an offer of partial financing. The result that you will receive totally depends on you. There are a lot of investment funds of different sizes and with different terms. This means that atleast one of them is made for you. The only question is will you be able to take it? 

In the beginning of the investment process you count the accessible means of the company, how much you are able to invest yourself and how much you need. Many in a moment like this search for the investor, but this is not right. First of all, you need to think how it would be advantageous to finance the missing part. This is called financial structuring. 

Financial structuring is planning of the financing. For example, you need 100 moneys, from which 15 are your own. If you in this moment will talk to the investor, then your relationship will be made in perspective that you have 15 moneys and he needs to invest 85 that is 15 against 85. However, if you discover that the banker is ready to finance 60 moneys, then it appears that you need only 25. Now the possible relationship with the investor is formed in relation 15 against 25. You see? Already better! If you add mezzanine credit in the amount of 10 moneys, it appears that you need only 15 from the investor. This means 15 against 15. And now let us remember where we started. 15 against 85 and there will be now question whether you need the structuring or not. 

After completing financial structuring you should start moving towards the investor. Your possible relationship will be based on the investment of each side. Often you have invested your own money into the enterprise and do not need extra investing. In this case your enterprise will be your investment. Higher rate of the enterprise will make your investment higher. 

A prepared house can be sold for a higher price, just the same for the enterprise, the better it is prepared, the higher rate it may receive. If you do not do it, then you give as a gift a part of your enterprise to the investor. This is the reason why it is essential to make certain enterprise preparing tasks and to pay careful attention to this vital stage of ht investment process. 

The preparation of the enterprise is followed by the preparation of documents. Everybody knows the meaning of the package, but practice shows the opposite. Entrepreneurs hand in business plans that are full of advertisements, but there is no essential information for making a decision. Even more, it often happens that the management of the enterprise has not read the applied documentation and their opinion differs from the information given in the business plan. 

The documentation for the investment should be written in English according to the international standards and the customary practice of the investor.

You have to remember the employees of the investment fund are not your consultants and will not ask you to apply any supplementary or explanational information. You will simply receive a refusal because the decision will be made according only to the applied information. 

In investment funds work investment professionals who have seen countless investment applications and business plans from many different industries in their lifetime. Therefore you should not consider them incompetent and think that they understand nothing. Perverted and "overdecorated" information will not make you a great positive effect. As a matter a fact, it will make a completely opposite effect and may give reasons to doubt your persona as a trustworthy partner. 

After the preparation of the enterprise and documents you should select an employee who is able to present your enterprise in English and well. Then your investment consultant may begin to talk with investors. Of course, first of all you should identify them. And also it should be done before the preparation of the enterprise and documents. 

This is the way the short, but a very essential part that entrepreneurs unfortunately usually forget or do not pay the necessary attention looks like. This is the part the success of your investment transaction is fully dependent on.