Once you have prepared an executive summary, a business plan and detailed financial projections, determined your optimal financial structure, created appropriate legal entities, and prepared a PPM, you are ready to take the final steps necessary before you actually go out and raise funds. These final steps include preparing an investor presentation, a due diligence binder and making the appropriate regulatory filings.

An investor presentation is simply the hand-outs or slideshow that you want to use during meetings with potential investors. (Note: While we call the preparation of this presentation a final step, there is no reason why you cannot have been working on it in while preparing your business plan and/or completing any of the other preceding steps.)

These meetings can take different forms. The first possibility is that investors will simply sit back and expect you to make a formal presentation lasting about 20 minutes, after which they will ask you questions. A second possibility is that investors will start to interrupt you with questions almost from the outset of the presentation, or openly tell you soon after shaking hands that they have reviewed your materials carefully, do not need a formal presentation, and would prefer instead simply to have a discussion about the business. Or, third, you could have meetings that are somewhere between these two extremes.

You prepare your presentation assuming the first (and most challenging) of these possibilities, namely, that you will have to present for 20 minutes straight without any feedback whatsoever from the investors. Such a presentation can be structured as follows:

1. Before turning on a projector, or opening handouts, take a minute to connect with the investors by telling them a human anecdote about how you came up with your idea or became involved with the business, or a joke that is relevant, while making eye contact.
2. Describe

the problem that your customer has, the problem that they want to avoid, or their lack of opportunity
a desired future state for your customer that is more pleasurable (problem solved), more certain (problem avoided) or more fertile (new opportunity potential) and
the benefits (both performance and psychological) that the customer will receive from being in that future state.

3. Describe your product/solution and how it is significantly better for the customer than all of their existing choices.
4. Describe how the cost of your product is less than the benefits that it creates, relative either to competitors' solutions or, if your product addresses an unmet need, the current state of affairs for customers.
5. Having described the value proposition of your product for a single customer, describe your initial target market and its dollars, your total market and its dollars and the name of your market category.
6. Describe the key strength(s) that will differentiate you from the competition. The accompanying slide can be a features graphic that shows how you provide everything that the competition does plus more, or it can be a grid where the y-axis is your strength and the x-axis is the key benefit currently offered by your competitors, with your company and your competitors each represented by a point on the grid (with your dot highest and to the right).
7. Describe your top one or two marketing strategies, which may include your launch plans or go-to-market strategy, branding and promotion, trade show focus, public relations and press emphasis, and/or your website.
8. Describe your sales strategy and/or distribution approach, which may include your direct sales force, channel strategy, sales cycle and/or unit pricing (and how that will change over time).
9. Describe possible future versions of your product, and whether these new versions will allow you to provide a solution for additional target segments.
10. Present a slide of the names of the key executives, their experience and their expertise, and who is on your Board of Directors.
11. Present a 3-year or 5-year projection of revenues, gross margins, earnings, and cash flow. Point out when you will achieve positive cash flow and positive earnings.
12. Explain the existing capital structure, who owns what, and if there are any unique terms. Explain how much money you desire to raise today and how much money, if any, you will need to raise in the future prior to achieving positive cash flow. Explain your valuation by expressing it as a multiple of revenues or earnings, by using comparable transactions, or by some other method.
13. Recap by expressing in new words that do not simply summarize what has already been said why you have a credible growth story and why the investment risk/opportunity equation is fair and reasonable.

In addition to preparing the presentation, you should also prepare a due diligence binder in which you collect in one place all of the pieces of paper that a seasoned investor would need to complete their due diligence (articles of incorporation, patents, leases, employment agreements, option plans, etc.). You can get a due diligence checklist from your attorney or adviser. This task is simple in concept but can take some time to complete as the relevant documents may be located in numerous places. Like the presentation, you can work on the due diligence binder while completing the previous steps. Ideally you would start one on day one of the business and keep it up as you go along.

Finally, prior to actually beginning to raise funds, you will need to file for registration exemptions in every state in which you intend to contact any investors. This should probably be done by your attorney.