skip to content
New Literacy Technology Consultants

Funding Requirements and Strategy

/ 2 min read

startup, business-plan-series, writing, guides

What to IncludeFinancial Projections

In this section, you’ll outline how much funding you need, how you plan to use it, and your strategy for obtaining it. This is critical for convincing investors that the money will be used efficiently to scale the business and reach key milestones.

Core Elements:

  • Amount of Funding Required: Total capital needed to reach business goals.
  • Use of Funds: Detailed breakdown of how the funds will be used (e.g., product development, marketing, hiring, etc.).
  • Funding Milestones: Key milestones you aim to achieve with the funding (e.g., revenue goals, customer acquisition targets, market penetration).
  • Exit Strategy: Plans for investor returns, whether through acquisition, IPO, or other means.
  • Funding Sources: Potential investors, sources of capital (e.g., angel investors, VCs, loans, crowdfunding).
  • Valuation and Equity: Projected company valuation and how much equity you are offering in return for investment.

Where to Source the Information

  • Business model and projections: Understand exactly how much you need to achieve your business goals. This involves detailed financial planning from the projections section.
  • Industry benchmarks: Research common funding needs and valuation for similar businesses in your industry.
  • Investor expectations: Research investor preferences, such as acceptable equity stakes, and typical funding amounts for companies in your sector.

How to Analyze

  • Detailed justification: Clearly explain why the capital is needed and how it will contribute to growth. Investors want to know that each dollar is wisely spent.
  • Realistic funding milestones: Ensure that the milestones are achievable and tied to measurable outcomes.
  • Exit strategy considerations: Be clear about how investors can exit and earn a return, whether it’s through acquisition or public offering.
  • Valuation: Be prepared to explain how you arrived at your valuation, backed by market data or comparable companies.

Format and Structure

  1. Funding Requirements: Total amount of funding needed.
  2. Use of Funds: Detailed breakdown of how the capital will be allocated.
  3. Funding Milestones: Specific milestones tied to funding needs.
  4. Exit Strategy: A brief outline of potential exit options.
  5. Funding Sources: Where the funding will come from (e.g., investors, loans).
  6. Valuation and Equity: Overview of valuation and the equity offered.

This section is designed to make your funding needs and strategy clear to investors. Would you like me to prepare this template as a Google Doc, or would you prefer to move on to the next section?