How to Write a Winning Business Proposal: A Step-by-Step Guide with Examples

Welcome! In the previous article, we discussed funding sources for startups. Today, we’ll explain how to write a business proposal for investors.

In a broad meaning, a business proposal is a written business offer. Examples of business proposals include offers to potential clients, business partners or investors.

A good proposal of business funding is important for finding investors. This document should convince experienced entrepreneurs that your business is solid. Investment offers can be

– Uninvited

To find investments, startup owners must be proactive. You can send a proposal for business funding to venture capital funds and angel investors.

– Unofficially invited

Networking brings opportunities. After a conversation, a potential investor can ask you to email them details.

– Officially invited

An investor can officially ask for your investment proposal. This happens if they know that you are looking for funding. Perhaps you have already discussed your business with them.

A proposal for business funding should be available in presentation (pptx) and PDF formats. Entrepreneurs also call this document an investment deck. But do not confuse it with pitch decks. Here is the difference:

A proposal of business investment should have enough details to persuade experienced entrepreneurs. But it shouldn’t be long or complicated. Now, let’s examine how to write a business proposal to get funding.

Components and an Outline of a Proposal: Template for a Business Proposal

Each proposal for business investment is unique. Yet, most of them have the following elements:

1. Title

The title must be short. It describes what the company does or offers. For example, “Drone delivery startup” or “Sustainable shopping marketplace.”

You can add a subtitle describing the main goal of the document to investors. Examples are “Investment business proposal,” “Business proposal,” and “Investor deck.”

2. Table of contents

Provide a table of contents. Do not forget to add page or slide numbers. You can include links to simplify navigation.

3. Executive summary

A good executive summary is vital for success. This is the first thing that potential investors learn about your company. If it doesn’t pick their interest, they will not continue reading.

This is the summary of your document and should include its main points:

– Startup and market overview

Briefly describe the proposition and goals of your company. Describe market potential and the advantages of your startup before competitors.

– Required investment amount and expected ROI

Specify how much investment you need and what you offer. Mention what return on investment (ROI) the person can expect.

– Business model and strategy

Explain your business model and strategy. It shouldn’t be more than 2-3 sentences. You will provide the details in later sections. Or you can skip this information for now.

4. Company overview and background

Tell the reader why you decided to found your startup. What makes it special? What market needs can it solve? Specify why your experience and background make you qualified to lead this company.

If your company operates, provide information about its current state. Discuss its revenue, market size and customer base. Introduce your key employees. Tell how their skills benefit the company.

You should also provide historical financial data. Make an easy-to-understand chart with key figures.

5. Market state

Here, you should summarize the results of your market research. If your business plan doesn’t have a market analysis, you should add it. The most common reason startups fail is the lack of demand. Experienced entrepreneurs know this. So, good market research is necessary to convince investors.

6. The competition

Describe your competition and tell why your product is better. Why should a customer choose you? What advantages do you offer?

Remember, every business has competition. Your product might be unique. But other companies already provide a solution to the same problem. For example, when Karl Benz invented the car, there were no analogs. But people were using horses for transportation. This is an indirect competition.

7. Detailed business model and strategy

The business model and business strategy are different concepts. A business model describes how the company will operate and make money. For example, let’s look at the razor-blade business model. Gillette popularized it in the 1900s. The idea is to sell one product at a low price. Then, you sell the companion consumable product at a high cost. Thus, a razor handle is cheap. But blade refills are expensive. Gillette was selling razors at cost and replacement blades for profit. In the video industry, companies often sell consoles at cost and games – for profit.

A business strategy is a detailed plan on how to achieve success. It should include

– product pricing,

– suppliers and logistics,

– recruitment approach,

– success measurement methods and KPIs,

– SWOT (strengths, weaknesses, opportunities, and threats) analysis, etc.

You should specify action plans for various scenarios. For example, describe what you will do if the revenue is lower than expected. Or if a competitor gains market advantage. This will help you later with risk management.

8. Issues, risks and proposed solutions

If your company faces any issues, specify them. Potential investors want to know such insights. Describe your plan on how to handle the situation. Also, provide a detailed risk analysis and risk management strategies.

9. Financing strategy

Investors want to know what you will spend their money on. So, create a roadmap with all expenses. And explain how each contributes to business growth.

10. Proposed exit strategy and timeline

An exit strategy is a plan on how to sell ownership. Include proposals for business investors on how to exit and get a profit. The most common strategies are:

– IPO (Initial Public Offering)

Companies have several investment rounds. Finally, they can hold an IPO. This means selling shares to the public via a stock exchange. The company becomes public.

This strategy can be successful and raise a lot of money. But, you must meet many government requirements. Also, the process is long and costly.

– Mergers and acquisitions

Another option is to sell your business to a larger company. Desirable companies are those that bring value. For example, you can develop and patent an innovative technology. Then, buying your company would mean getting the patent plus expertise.

🎯 Learn how the tech startup we helped create got acquired by Stripe.

– Selling equity

Shareholders can sell their ownership to other investors. There are different types of investors. Examples are

• angel investors,
• venture capital (VC) funds,
• private equity (PE) firms and
• hedge funds.

The first two prefer early-stage startups. The last two – late-stage startups. Angel investors and VC funds often sell ownership to other VCs and PE firms. Hedge funds are more interested in public companies. But lately, they have shown interest in private startups.

💼📊 You can find an in-depth analysis of investor types in our previous article. There, we listed top angel platforms, VC funds and PE firms in the US🇺🇸, UK🇬🇧 and Canada.🇨🇦

Provide a timeline. Tell when you expect to hold an IPO or sell a company.

How to Write a Proposal for a Business and Get Investment? Tips and Best Practices

We gathered for you the best practices and tips on how to write a proposal for business funding.

5 success tips on how to write a proposal for a project funding

Here are 5 things to pay attention to when writing investment proposals:

1. Prepare before writing

Preparation is key to success. Before contacting potential investors, be sure to:

– Do market research,

As mentioned, market research is crucial for business success. It tells whether you will find buyers for your products or services. Market research findings should be a part of your business plan and investment proposal. It also helps identify potential business risks.

– Run a feasibility study,

A feasibility study tells whether your business idea is achievable. It studies legal, technical and financial standpoints. Consult a lawyer. They will tell you if your business idea breaks any laws. Also, you might have false assumptions about your legal rights. For example, one cannot patent certain items. Developing them will not bring the expected financial reward.

Consult a technical expert if necessary. Let’s imagine you want to create a high-tech VR game. You can spend months looking for investors and employees. Then, you learn that no hardware can support all desired features. A technical expert in the field can tell you whether your idea is workable.

A financial expert can help you calculate business expenses and expected revenue. The expert will consider how much customers are willing to pay for similar products. If expected operation costs are higher than company revenue, you will not get profit.

– Create a business plan,

A proposal for business funding relies on a business plan. It should include many aspects described in the business plan. If your proposal for business cooperation interests an investor, they will want to read your plan.

– Strategize

Create your business model and strategy before writing a proposal for business funding. Develop your pricing strategy, logistics plans, marketing and sales approaches, etc.

2. Simple and visual proposals for business investment win the day

Information in your proposal for business investment should be easy to understand. To achieve this, use simple phrasing. Business terms are ok but avoid technical language.

Visualization tools are great. Use lists, tables, graphs, charts and illustrations. But remember, your graphs should not have many components. Two or three simple graphs are better than one but complicated.

3. Be clear, provide stats & data

Be clear about your plans, needs and goals. Trust is key to finding an investor. So, be straightforward and honest.

Statistics and data are very important. Being passionate about the project is great. But investors want to know that you are serious and realistic.

4. Avoid irrelevant information, be concise

Investor decks are shorter than business plans. Don’t try to include every piece of data you have. Add only key figures and conclusions.

5. Get feedback from friends

A second opinion is always a good thing. Even if you don’t know business-savvy people, look for feedback. Show friends your proposal for business funding. Ask what isn’t clear. It is ok if they don’t know the terminology. But make sure they understand your ideas. Ask what you can improve.

How to present your business proposal to investors

Now that your proposal for business investment is ready, it is time to present it.

1. Start with an introduction and choose a proper format

If you want to send your proposal via an app or email, write a short message first. Introduce yourself and say that you are looking for investors. Briefly describe your startup and ask whether you can send them your investor deck.

If you present your project in person, create a pitch deck. This presentation should not include things that you will tell the audience.

2. Use storytelling

You can start with a short story. It should illustrate the need for your business. Make it simple and brief. It can describe how you stumbled upon your business idea.

3. Be transparent

Be ready to answer any question about your company. Investors must know they can trust you. If there are any issues, be upfront about them.

4. Learn the terminology

Investors will want to know what rights and terms you propose. So, it is important to learn relevant terminology. Examples are:

– Drag-along rights

Let’s imagine that the majority stakeholder wants to sell the company. With drag-along rights, they can force minority stakeholders to sell their shares too. Thus, if you sell your business, the buyer can purchase angel investors’ shares.

– Tag-Along Rights

Tag-along rights protect minority stakeholders. If you sell your ownership, the angel investor will have the right to sell their shares on the same terms.

– Anti-Dilution Protection

It helps angel investors protect their ownership percentage. Let’s say an angel owns 20% of a company with 1000 shares. This is 200 shares. Then, the company offers 1000 more shares. Now, the angel owns 200 shares in a company with 2000 shares. Their ownership percentage got lower. Now it’s 10%. Anti-dilution protection guarantees that an angel will maintain 20% ownership. Meaning they will receive extra shares at each funding round.

Angels often use this contract term. You should expect it.

– Exit Rights

You can specify under what circumstances an angel can sell or transfer their shares.

– Liquidation Preferences

In case of liquidation, angels can have the right to receive their investment back first. Meaning they will get paid before other shareholders.

What to do beyond writing a business proposal. Examples of successful strategies

1. Network

Networking can give you a huge boost. Visit various thematic conferences and events. Go to startup funding competitions. Even if you don’t win, it is ok. You will get the chance to present your startup to a huge audience. The exposure is priceless. Top upcoming startup competitions in 2024 are:

– Startup World Cup 2024,

– Global Startups Awards,

– TechCrunch Disrupt 2024,

– Hello Tomorrow, and

– Slush 2024.

These are the largest startup events worldwide. You can also find various local events on the F6S platform.

2. Showcase your startup on local news

In the US, you can get hosts of various local media news to advertise your products and services. It is affordable. Prices range between 1,700 and 3,000 USD. The benefit is that afterward, you get a video file to place on your website. Then, you can refer potential investors to this video. This will boost your credibility and drive engagement. It will also help you get new clients. But, this works better for startups with a developed product.

Another approach is sending a press release to media outlets. There is no guarantee the outlets will print them. But it is worth a try.

3. Organize a social media campaign

Let people on social media know that you want to attract investors. Write a post and add hashtags. Reach out to several business channels and influencers. Learn the price and requirements for getting featured.

Remember to maintain social media pages. It makes your business more relatable. This also helps convince potential investors.

4. Make phone calls and send emails

Reaching out to potential investors is crucial to get funding. Find a list of prominent venture capital firms in your country. Send your proposal of business funding to as many of them as possible.

Moreover, there are various platforms where startup owners can meet angel investors. Set up a profile on several platforms and reach out to investors.

5. Host an event

Organizing an offline event is a great way to drive engagement. You can show investors your manufacturing process or discuss your vision. Invite your regular customers, investors and other interesting parties.

Resources for Further Reading: Business Proposal Examples and more

We collected some extra resources for you. These are business proposal examples, templates and writing guides.

Examples of business proposals

Here are some samples of business proposals:

1. Business proposal example by Silkway Ventures Group

2. Sample of a proposal from New Zealand’s Transport Agency,

3. KPMG’s proposal example for business,

4. Proposal for business example by Cantor Fitzgerald Ireland Ltd,

5. A business proposal example from New Britain Borough,

6. Proposal for investors example by Clark Capital,

7. Business proposal examples from Sample.

Templates for a business proposal

Our team has gathered a list of templates for business proposals. Review them and choose the most suitable one:

– Business proposal template from Slidebean,

– Issuu’s proposal for business: template,

– Template for a business proposal from Revv,

– Beautiful.ai’s templates for a business proposal,

– Business proposal templates from Jotform,

– A business proposal template from HubSpot,

– Templates of business proposals from Canva,

– Template of a business proposal from Wise.

How to Write the Business Proposal of Your Dreams? More Guides

For more tips and useful information, read other guides on how to write a proposal for business funding. Here are 10 good ones:

1. CIVICUS: A guide on how to write a business proposal

2. Adobe’s tips on how to write a proposal for business

3. FasterCapital’s guide on how to write proposals for projects

4. Tips on how to write a proposal for business from ClientPoint

5. Project proposal: How-to-write guide from StartupSpot

6. How to write a proposal for business funding? A guide from Visible.vc

7. Tips on how to write business proposals from SKTThemes

8. A guide on how to write business proposals from PureProposals

9. Patriot’s tips on how to write a business proposal

10. Tips from FunderBeam on how to write a proposal for business funding.

If you don’t have a business plan yet, use the following resources:

– A guide on writing business plans from Harvard Business Review

– Business plan resources from the Canadian government

– A business plan for startups: template by Forbes

Conclusion

To write a good investment proposal for a business, prepare. Write a business plan and do market research first. The proposal should include

– title and contents page

– executive summary,

– business background,

– market analysis,

– business model and company strategy,

– financing approach and

– exit strategy.

Make the document easy to understand. You can add illustrations and graphs.

To increase your chances for success, network. You can take part in relevant events and present your startup to a huge audience. You can also make calls and write to potential investors. Another approach is to place an ad on local news. You can also organize a social media campaign or an offline event.