How to Attract Investors with an Investor-Ready Business Plan
In the competitive global landscape of startups and new ventures β where millions of founders compete for a slice of the global venture capital pie and its estimated $468.4B market volume in 2024 β securing investment is a major step to entrepreneurial success.
At Mikel Consulting, we believe that β as entrepreneur ourselves β a well-crafted business plan is your most powerful tool in attracting investors and staking your claim in your sector of choice.
Through this brief guide, we delve into the critical components of investor-ready business plans β highlighting the key factors that investors consider and showcasing how smart business planning has helped our clients connect with top investors and raise more than $1 billion in funding.i
What is an βInvestor-Readyβ Business Plan?
At Mikel Consulting, we define an investor-ready business plan as a comprehensive, custom- tailored document that clearly articulates your companyβs business model, market opportunities, competitive advantages and key points of differentiation, financial projections, and funding needs β most importantly, in ways that are attractive to (and easily understood by) institutional and private investors. Unlike internal documents, investor-ready business plans are fundamentally outward- facing and designed for the specific purpose of helping your company acquire direct investments.
Our investor-ready business plans always incorporate several essential components β including an executive summary, company description, products and services, management personnel, market and competitor analysis, and other information. Supported by robust financial projections and DCF valuations, these concise, data-driven plans are designed to effectively showcase your business to potential investors β based on the key factors that investors consider when evaluating investments.
What Do Early-Stage Investors Look for in an Investment?
While each investor is different, Mikel Consulting has identified the following points of commonality between typical angel and early-stage VC investors β the key audiences our investor-ready plans are most often designed for. Correspondingly, our plans highlight the following key factors and metrics, based on conversations and direct input from leading VCs and private investors:
Customer Validation
Investors seek tangible evidence that a startupβs product and service line addresses real customer needs and, ideally, has been validated by customers through a process of testing and even initial revenue. Prior to revenue, a company can demonstrate its validation in several ways β from conducting target customer surveys to securing letters of intent (LOIs) β and showcasing metrics, including customer acquisition cost (CAC), lifetime value (LTV), user engagement rates, and testimonials β to indicate demand and satisfaction. In our business plans, Mikel Consulting puts our clientsβ previous validation efforts first and foremost to show investors how each business has already verified its customer demand. For very early-stage startups that have yet to achieve meaningful validation, we leverage key industry research and other resources to fill gaps and validate clientsβ business models.
Founder Experience & Skillsets
A companyβs founding teamβs experience, skills, and track record are critical β for most early-stage angel and VC investors, founders are the make-or- break investing decision factor. Investors examine team background, domain expertise, and past successes or failures, with metrics including the number of successful exits, industry experience (in years or successful projects), and the teamβs demonstrated ability to execute the business plan and adapt to challenges. Mikel Consulting actively incorporates our client information to bring attention to previous experience and skills in every plan, making it easy for experienced and inexperienced founders alike to show how their unique abilities matter.
Market Fit & Size
Investors look for businesses with market-aligned products and services (i.e., core value offerings meeting a compelling and established need) that not only target a large and growing market but are uniquely able to enter and grow. This combines aspects of customer validation and experience to show how a startup has verified demand and is well- positioned to capitalize through its foundersβ abilities and insights. Through bottom-up and top-down valuation, businesses can show potential market size β helping investors assess total addressable market (TAM) and determine scalability and return on investment (ROI) in a typical 5-10 early-stage angel or BC year horizon. Key performance indicators (KPIs), such as market growth β measured as a compound annual growth rate (CAGR) β and trends in the industry (e.g., cyclicality, demand elasticity, revenue volatility, etc.) all provide insight into a companyβs long-term prospects. Mikel Consulting includes all this and more in each plan.
Revenue Streams & Unit Economics
Derived directly from market alignment and size, investors look for clear, sustainable business models and product and service-driven sales channels that effectively capitalize and convert demand into stable, growing revenues. With Mikel Consultingβs five-year financial forecasts β driven by company-tailored revenue lines, expenses, and more, investors can evaluate how clients plan to generate revenue through a clear pricing strategy and cost structure. Our extensive financial projections provide simple- to-follow metrics such as gross margins, recurring revenue, cash flow and balance sheets, breakeven and sensitivity analysis, and more to help assess our clientsβ modelβs viability and profitability potential. Additionally, we utilize a variety of industry-standard methods β from VC revenue multiples to WACC-driven DCF valuations β to provide startup valuations.
Use of Funds
Based on valuations and corresponding factors β e.g., amount invested and percentage of equity β investors scrutinize financial projections to understand how startups will use invested funds to ultimately increase profitability and ROI. They look not just at the projected income, cash flow, and balance sheet statements, but also at key metrics (e.g., IRR) to see how a company expects to evolve and eventually multiply initial investments. Furthermore, they assess the funding request to ensure it aligns with the companyβs growth milestones and strategic objectives, with metrics such as runway (i.e., time until cash is 0), break-even point, and future funding needs are critical in this evaluation. Mikel Consultingβs in-depth financial analysis includes all of this information and more β ensuring that clients and investors alike are 100% confident in the in-depth funding information at their disposal.
How Can Mikel Consulting Support Your Business?
At Mikel Consulting, we have developed these insights through a process of continuous discussion and improvement, with a proven track record of success in securing funding. We have worked with dozens of partners to prepare over 3,000 customized investor-ready business plans, which have collectively raised more than $1 billion in investment capital. With a remarkable 97% success rate, our team has consistently helped clients of all sizes and types attract investors, secure bank loans, and more β ensuring every business venture is well-positioned for growth and long-term success. To meet the previous investor factors and more, our expert team integrates the following in every plan:
Market Opportunity Analysis
Mikel Consulting conducts comprehensive market research β pulling from hands-on experience and dozens of industry sources β to accurately define the size, growth potential, and trends of your target market. Our team can provide detailed market analysis, including (but not limited to):
Industry Overview: In-depth analysis of current industry trends, opportunities, and threats.
Target Market Identification: Demographic and psychographic profiles of customers.
Market Size & Growth Potential: Ηͺuantitative data and projections demonstrating your companyβs TAM, SAM, and SOM, along with corresponding capacity for expansion.
Competitive Analysis: Identification of key competitors, market position, and advantages.
Team Strength & Expertise
We emphasize the importance of a strong, experienced team to potential investors, with:
Detailed Team Profiles: Highlighting the background, expertise, and achievements of your management team and key advisors in a dedicated section and throughout plans.
Organizational Structure: Clear presentation of roles and responsibilities to show a well- defined operational hierarchy in visual and written form, making it easy to understand.
Track Record of Success: Showcasing your teamβs previous successes and experience to build investor confidence and show how your will effectively scale your latest venture.
Board of Directors & Advisors: Inclusion of influential industry leaders and advisors who provide strategic guidance β another key factor that investors always value.
Product-Market Fit & Customer Validation
Our business plans demonstrate the demand for your product or service through:
Customer Testimonials & Case Studies: Real-world examples of satisfied customers and the value they derive from your offerings, incorporating your hard-won insights.
Market Testing Results: Data from pilot programs, beta tests, or initial market entries that prove your customersβ interest and engagement in meaningful ways β backed by industry- leading market research and quantitative data from hundreds of sources.
Customer Acquisition Metrics: Analysis of customer acquisition cost, lifetime value, and retention rates β with corresponding financial model types to best reflect your model.
Value Proposition Clarity: Articulating throughout each investment-ready plan how your unique products and services solve customer problems, meets their needs, and drive ROI.
Robust Business Model & Financial Viability
Mikel Consulting ensures your business model is clearly defined and financially sound, with:
Revenue Streams: Business model-customized and detailed explanations of how your business generates income, with monthly sales and expenses forecasts over five years.
Unit Economics: Analysis of key metrics such as gross margin, customer acquisition cost, and break-even analysis to help your team and investors measure business performance.
Scalability Plans: Strategies for scaling operations to meet increasing demand through a five-year go-to-market (GTM) strategy and corresponding sales and marketing strategies.
Financial Projections: Realistic, market-supported income statements, cash flow, and balance sheets β projecting your future financial performance and discounted valuations.
Financial Projections & Funding Requirements
Our financial models and funding strategies make a compelling case to investors through:
Clear Funding Request: Precise amount of capital needed and a breakdown of how funds will be utilized through a use of funds table with all key startup expenses and assets.
Path to Profitability: Clear timeline and strategy for achieving break-even and profitability through GTM strategies and corresponding financials, including sensitivity analysis to show how profits and ROI will be achieved even in cases of below-expected performance.
Future Funding Needs: Outline of potential future funding requirements and milestones to attract subsequent rounds of investment, along with corresponding capital asset needs, debt and equity funding, and exit strategies.
By focusing on these critical areas in every investor-ready business plan, Mikel Consulting creates custom-tailored packages that effectively address the concerns and requirements of early-stage investors β from angels to VCs β that significantly enhance your chances of securing the necessary funding for your businessβ growth and success. Contact us today to learn more about how we can help you join the thousands of satisfied clients we have helped achieve investor funding success.
