The Project File is often recommended for investment funds in high-goodwill activities (telecom, biotechnology, new technologies, etc.). The Project File
What is a project file?
A project file is the quantified vision of the development of the SME seeking financing.
It is a descriptive document of the company given to potential investors who will appreciate the risks and decide on the opportunity to carry out the operation.
The Fundraising Project File must highlight the company’s need for equity financing over a given period.
In particular, it allows :
– to value the SME (discounting of future cash flows)
– to evaluate the legal and financial set-up for opening capital or raising funds for your SME.
The fund-raising project file will notably integrate the projected operating accounts and the projected table of uses and resources.
The forecasts must be made for a period of 3 to 5 years and highlight the key operating factors and sensitivity factors.
Forecast of uses and resources, including:
– projected investments
– financing (investments, working capital requirements, etc.)
– Changes in working capital requirements (WCR).
Forecasted operating accounts
The projected operating accounts of the SME in the fund-raising phase will include the following elements
– forecasted revenues: evolution by company, by product/service ;
– projected margins per company, per product/service
– operating expenses: payroll (evolution, recruitment plan, etc.) ;
– external expenses, etc.
Rules of construction
The project file of the company seeking financing must have three essential characteristics:
– be easy to conduct, therefore realistic and credible.
Potential investors may make certain financial terms conditional on its completion.
– be prudent.
In general, only events that have a high probability of occurring or that can be clearly identified are taken into account.
– but ambitious.
It is advisable to be attentive to the confidentiality of the data that are integrated into the plan.
A few precise rules of construction must be followed.
Thus, particular attention should be paid to consistency with the past (a prior diagnosis of the SME in the process of opening up its capital is most often indispensable) but also to consistency with the market and the competitive environment.
Given its importance for the subsequent operations to be carried out, it is often necessary to be assisted in the elaboration of the project file of your SME’s capital raising. In this respect, it is possible to call upon the skills of Actoria Europe Middle East & Africa.
