Investment proposal

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Investment proposal - the document prepared by an entrepreneur for a potential investor, in order to familiarize the latter with the idea, strategy, opportunities and perspectives of the business. In other words, conditions under which the company is ready to invest[1].

Investment proposal structure

A properly written investment proposal should consists of the following points[2][3]:

  • Description

Brief description of proposal, idea. It should capture the attention of a potential investor so that he would be interested to continue a more detailed acquaintance with your company.

  • History of the company

Chronology of major events, history of the company, starting from the date of foundation to the current point in time. For example, mergers, acquisitions, capital raising, restructuring, etc.

  • Products and services

Detailed description of the products and services that the company represents on the market today and plans to offer in the future. It is important to focus on describing the advantages of the product.

As in the previous point, it is important to focus on the description of the good sides of the empoyees (experience, certifications, training etc.). Information may include: number of employees, payment terms, benefit information, distribution of employees by functional areas. The investment proposal should also include information about the key employees of the enterprise.

This is the most important information on the basis of which a potential investor will be able to conclude whether the company is able to successfully realize its competitive advantages in the market in accordance with the business plan and to ensure profit and business value growth. It's important to realistically evaluate and analyze the level of competition and it's opportunities.

Description of the company's production process and technologies used. The section should include information that gives an idea of how your business operates. What and how does your company produce and how does it sell and deliver products to customers.

  • Financial history

The section includes the financial results of the company in previous periods of time, including: balance sheet, income statement and cash flow statement. This information is necessary for a potential investor to assess how effectively the company has acted in the past.

Description of the idea, growth opportunities and action plan of the company. Strategic plan is one of the most important parts of the investment proposal for the investor, it allows the investor to understand how the company plans to earn on its growth opportunities.

  • Risk factors and risk reduction strategies

Description of possible risks that the company may face and how to overcome them.

  • Forecast of financial condition

The description of expected revenue forecast. The section describes the forecasts of the financial condition of the enterprise for the future. Forecasts are made taking into account the fact that the strategic plan of the company will be successfully implemented. The potential investor will assess the expected return on the invested capital of the project, based on the presented financial calculations and confidence that the company is really able to achieve that goals.

Description of the need for additional funds and their amount. The section describes in detail the company's need for financing.

It is important to indicate whether your project is supported by the government. It is also necessary to describe the current legislation, which may have a positive or negative impact on the results of the project.

  • Brief conclusions

Brief summary of all the above.

The difference between investment proposal and business plan

A business plan is a detailed document that focuses on the company's operating activities and describes them, but unlike the investment proposal it does not represent how the goals will be achieved. Business plan it's a key part of investment proposal. An investment proposal is a document intended only for potential investors and a business plan is intended not only for the investor, but also for the management of the enterprise. The investment proposal is developed on the basis of the data contained in the company's business plan, therefore the development of the investment proposal is the next stage after the business plan has been completed[4].


  1. Consulting M., (2014), p. 37
  2. Consulting M., (2014), p. 65
  3. Loewen J., (2012)
  4. Consulting M., (2014), p. 41

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Author: Andrii Didukh