The Investor Prospectus for a New Venture refers to the document that provides the fundamental information about a business proposal. It articulates in writing the detailed and specific information about the offering, and includes much of the information found in the Business Plan including company background, management and stakeholders, financial performance and projections, company valuation, and use of funds raised through the offering. The Investor Prospectus is the “take away document” given to a serious prospective investor (VC, angel, friends and family, etc.) during or following a New Venture Pitch meeting.
Note: The Investor Prospectus described in this article is in the context of a new business venture or “startup”, and not meant to be confused with a prospectus commonly referenced in the finance world, which is a legal document that institutions and businesses use to describe the securities they are offering related to mutual funds, stocks, bonds and other investments.
The Investor Prospectus (New Venture) should be thought of as a constantly evolving document, with many of the same components of the Business Plan, yet fine-tuned to its audience with an emphasis on articulating the specifics of the offering. Some components may be custom written for a specific prospective investor, and some Business Plan sections may be left out, condensed, referenced or summarized depending on the prospective investor’s familiarity with the proposal to date. However, an effective Investor Prospectus for a new business venture (i.e. Startup) should have most of the sections listed below.
Cover Page (with publication date and the word “Confidential” clearly visible)
Table of Contents
Executive Summary / Situation Update
Company Profile: (Mission Statement, Elevator Pitch, company form, list of key management / stakeholders)
Company History / Background
Management and Stakeholder Profiles (include organizational chart)
Product / Service Description (Value Proposition)
Pricing Strategy
Technology Knowledge Base
Statement of Differentiation / Competitive Advantage
Current Revenue & Expenses
Projected Revenue & Expenses
Business Development / Partnership Strategy
Valuation
Investment Strategy
Exit Strategy
Appendix (all items should be referenced in body of Business Plan)
· Notable customer case studies
· Notable new articles (about company or proving claims in plan)
· Notable communication (letters, emails, etc.) from key partners
· Notable legal info (patent, trademark, copyright, license agreements, etc.)
· Notable financial info (credit report, letter from banker, valuation, etc.)
VP of Strategy 