5. What Is the State of Your Company Finances? a. A shoebox stuffed with receipts is my accounts payable. b. We manage. My staff get paid on time and we pay our bills, c. We have a good idea of our revenues and monthly costs, and we have it well documented. We really don’t spend a tonne so our accounts are pretty simple. We pay our taxes. d. We have taxes paid and fi nancial statements done. We have a fi nance report done every month with fi nancial targets. We have a bookkeeper but need a CFO. 6. Are You Comfortable Asking for Capital? a. Sure. I’ve asked my uncle for money and I have been able to get the bank to give me loans, so I’ve had experience. b. I’ve had an Angel investor on my board. 186 CHAPTER 9 c. I would prefer to have professional help at this stage as we are complicated. d. We have a good track record to show our future will be solid. I think any fund manager will be pleased to have us in their portfolio. 7. How Are Your Own Finances? a. I need to pay my taxes from last year. My own situation is not a refl ection on how I conduct myself in business. b. We are stretched on the home front. c. We have basic accounting covered but my mum does the books. d. Everything is computerized and on Quicken, complete with budget and investment plans for the next three years. Your Financing Profi le If your answers were . . . Mostly (a) You are not ready. Do not mess up your reputation and jump the gun at this stage. You need to get your house in order fi rst. You probably still need to ask your mom for money as she is the only one who will fund you at this stage. Get organized! Mostly (b) You are getting the idea. You may be ready for seed funds or angel investors. See an expert to start talking about what your focus needs to be. Mostly (c) You are in the starting blocks for a strong takeoff down the track, but be careful. Get your investment proposal written and consult an expert to do the fi nancial modelling. You can stand up to fi rstround and secondround investing with VCs and institutional fund managers with smaller funds. Mostly (d) If you are telling the truth about your revenues and if you have outsiders agreeing with your assessment, then you are investor hot! You are ready to meet fund managers of private equity. Creating Plans That Get You Funded 187 TAKE AWAYS Th e business plan is revisited but with the focus on what the private equity investor is thinking while reading your business story. Th e investment proposal is diff erent from the business plan. Most business plans do not contain that spark of interest that the growth equity investor or institutional investor likes to see. Take care to write an investment proposal, not a classic business plan. It will be worth your while to have a proper analyst build sophisticated and relevant fi nancial models and conduct a due diligence prior to approaching this level of investor.