Raising Capital

Much of the difficult part of raising money is putting together the requested documentation for lenders and investors. This includes everything from tax documents to sell sheets to simulated proforma financial statements with realistic assumptions about the company’s growth.

The focus of the narrative request for funding is to substantiatehow much of what kind of money the company needs and for what purpose. This should be done after other documentation and should be relatively brief to make it easy for lenders/investors to read. It should supplement other materials present in the financial package, like the pitch deck.

There is no free money, and there is accountability and responsibility that comes with any sort of loan or even grant to your organization. Instead of a shotgun or kitchen sink approach to seeking financing, target specific funders with specific requests because each has their own requirements, needs and priorities.

All food businesses need money to grow and often grow in rounds or steps. And, in addition, many deals or financial packages often involve putting together multiple sources of money together to fulfill different uses. For example, many food businesses, especially wholesale brands, underestimate the amount of working capital they will need.

While the sections of this document are similar to a business plan, this is NOT a business plan. Think of all of the contents of a drop box or other online file sharing service as the full business plan. This is a specific ask for money for a specific project. It is important that all of the numbers are the same as the ones in the accompanying Proforma financial statements.

Traditional lenders tend to be very conservative, so they often make loans for less than the purchase value of assets, and look to partner with investors and the entrepreneur to finance growing businesses. They look at things like collateral and business strength when assessing the risk of making a loan.

A business model, not a product, determines whether a food or beverage company makes money. If the entrepreneur has a business model that can work, people will look at their documentation and plan and get how the business going to make money and give it to them. However, most entrepreneurs need help putting together their financing requests.

poSaNa organics is a manufacturer of best-in-class gluten-free cooking and baking mixes wholesaling to grocers and retailing directly online. This pitch deck is an example of an optimized pitch deck template to successfully raise money and communicate the company’s business model.