How To Write A Proposal For Investors: The Ultimate Guide

In the first quarter of 2021, US venture capitalists invested over $64 billion into private companies — that’s 43% of all VC money invested in the previous year.

The business world is seeing an unprecedented movement of capital and funding — and you’re perfectly poised to take advantage of it. Business operators and entrepreneurs will miss out big if they can’t master the art of the investment proposal.

But no need to worry — this ultimate guide on how to write a proposal for investors will walk you through everything you need to know. Ready to take your business to the next level?

How to write a proposal for investors image two women reading paper

What Is An Investment Proposal?

A proposal is any business document outlining a plan to execute against a given goal or task. Many kinds of proposals exist in the world of small business and entrepreneurship, including partnership proposals, expansion plan proposals, and more.

Today’s special guest — the investment proposal — is a proposal constructed with the goal of obtaining investments from lenders, VCs, angel investors, and beyond. Typically, these funds are for a new project or company that will create a positive return on investment for lenders. A well-written business proposal should answer any questions investors have and get them excited about funding your project or business.

Steps To Take Before Writing An Investment Proposal

Before you even begin drafting your investment proposal, take these steps to guarantee you’re constructing a comprehensive and persuasive document:

  • Do your market research. It’s crucial to show your potential investors that you have a solid understanding of your competitive landscape, growth opportunity, and total addressable market. Not only does it demonstrate foresight and professionalism, but as a result it will also help contextualize the rest of your proposal.
  • Review your customer or client personas. Understanding your customers’ and clients’ issues and pain points means you know their desired solutions. By mapping out your customer journey, you can also uncover points of friction and opportunities for improvement. 
  • Research your investors. Would you rather get a mug with no design or a mug with your name on it? If you’re like most people, you’d probably choose the latter. Investors are no different. Customizing your business proposal for investors demonstrates care and thoughtfulness that potential lenders will appreciate.

Finally, come up with a succinct title for your business proposal to investors. Ideally, an investor could hear those three to four words and immediately understand what the project is generally about.

What To Include In A Business Proposal For Investors

Executive Summary

Your executive summary (or project summary) may be one of the most essential segments of the entire investment proposal. Coming in at the start of your document, your executive summary should condense the most important content from the rest of your proposal into a concise and easily digestible format. 

Since the rest of the business proposal will likely be very technical, this might be the only section of your proposal that your prospective investors read thoroughly. Therefore, you should try to make the summary as convincing as possible. Make sure to include these details:

  • Description of your target consumer. 
  • The problem you’re addressing. 
  • Your solution (project), a description of the product or service.
  • Benefits that your solution provides to your customers and investors.
  • The ROI your investors can expect.

That last one is critical — at the end of the day, your investors are simply wondering what benefit this investment provides them.

Description of the Company

Your introduction immediately after the executive summary should be an overview of the company or idea. Here are some core details you don’t want to miss:

  • The Opportunity. Start by reiterating the market opportunity your project or company is exploring. This will set the tone for the rest of the introduction.
  • Performance & Achievements. Describing the company’s historical performance is especially important if you’re already operating. Include a description of the business, the product or service it sells, and notable achievements of the past. If you’re not yet running a whole business, you can replace this section with information about you as an entrepreneur, current project stakeholders, and relevant market statistics.
  • Financial Report. If your company has been operational for some time, simply include some business records like a company financial report. For companies that are just beginning, other compelling statistics about the market size and growth will do as well.
  • Mission & Goals. Here, discuss your organization’s mission, values, and objectives. They should align with the problem your project is trying to solve.
  • Team. A brief introduction to your team indicates talent working to make the project a reality. Highly skilled and dependable employees are a good sign for any investor.

Once you’ve covered your bases here, it’s time to move on to the bulk of your investment proposal.

Description of the Project

In this section, you are laying down a business plan to capitalize on an opportunity. For it to hold any weight with potential investors, it must be well-researched and in-depth. Here are the sections you’ll want to discuss:

  • Market Research. The preparation you did before drafting this piece will come in handy here. Investors want to ensure their investment will make money — as such, it has to be invested in a high-growth or high-potential market. Leverage your most compelling statistics to get that idea across. Given your market’s competitive landscape, outline strategies you can use to get ahead of your opposition.
  • Sales Strategy. Just like a regular business plan, you need to describe your marketing strategy, pricing models, unit economics, customer acquisition costs, and more. Developing these ideas in the business proposal demonstrates a level of experience that investors will be happy to see.
  • Team Logistics & Operations. This proposal will serve mainly as a reference for your investors as they consider your offer, so provide all the details you can — about the supply chain, talent demands, team allocation, operating expenditures, and beyond. 
  • Timeline & Plan for Measuring Progress. Reasonable goals are measurable and time-bound, and your proposal should be too. A timetable gives your investors an idea of how long the agreement will last, as well as a series of deadlines they can measure your progress against.
  • Financing. Besides the executive summary, your section on project financing may be one of the most important. Your investors will want to know about their return on investment, predicted profits and losses, existing debt, and more. Providing this information ensures your investors know where their money is going and how it is being used.
  • Exit Strategy. You should inform your investors about what they can do to divest their funds if they want to exit the agreement. This section should also cover what the protocols would be if the project meets failure or terminal success.

So you’ve covered all your bases — but we’re not done yet.

Tips For Writing Your Proposal For Investors

As you’re building out your business plan for investors, keep these Do’s and Don’ts in mind:

  • Do — Keep it succinct. Investors are often very busy people, and they typically don’t have time to read an entire investment proposal. That’s why keeping your executive summary to about a page or two in length is a good idea. Otherwise, only include essential information and avoid any embellishments.
  • Don’t — Avoid the subject. Be explicit about how large of an investment you’re seeking and discuss why you need it along with how you will leverage it.
  • Do — Make it understandable. It might be tempting to use technical terms and jargon to demonstrate how well-versed you are in the field. But your investors are more concerned with actually understanding the document. Use approachable language in your business plan, and you open yourself up to many more investors.

Make sure you proofread once, then twice, and start sending your business plan out there!

Need Some Help Creating An Investment Proposal?

Here at Pure Proposals, our goal is to grease the wheels of your business trajectory by making proposals easier. Want to get started on that startup idea you’ve had for months? Maybe open a new location for your family restaurant? How about kickstarting a modernization effort in your SME? Whatever the case may be, we hope this guide has answered any questions you may have.

Feel free to get in touch with us to find out how PandaDoc Proposal Software can help you draft up the perfect investment proposal and much much more!


Frequently Asked Questions

What do investors look for in an investment proposal?

Amid the baseline qualities and information an investor looks at, they also prioritize several pillars. First, strong leadership. Next, a large market where the company has a competitive value proposition — ideally, an organization that is gaining momentum. Finally, many investors also look for companies that can generate consistent cash flow.

What is a fair percentage for an investor?

Different investors have different expectations for returns on investment. For example, angel investors may expect 20% ROIs, but career investors like venture capitalists are more likely to demand higher returns, even upwards of 40%. In high-growth sectors like technology, many VCs look for returns of 5x or higher.

How do you convince an investor?

Having a well-researched and thought-out business plan is the first step in convincing an investor. Any party you want to borrow money from will look for high demand, growth, and quantifiable results. So, do your best to provide statistics and proof of your company’s momentum.

Simplify Sales, Maximize Revenue, & Free Your Time

Systems Simplified. The top strategies and tools to streamline your sales process and close deals faster.

You May Also Like…