How does a business owner write a letter to potential investors?


Quick Answer

A letter to potential investors can be seen as a business proposal in short form. The purpose of an investment letter is to capture potential investors' interest and entice them to read the full proposal.

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How does a business owner write a letter to potential investors?
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Full Answer

Unsolicited investment letters can be tricky to write, but at this stage the project should already be well planned out and just needs to be sold. Remember that the point of this letter is to get potential investors to spend their time reading a full proposal or meeting in person to discuss it. Cold letters rarely include hard numbers or petitions for actual dollar amounts. Ball park figures and ranges are acceptable, but if the details given in the letter do not support the stated figures, the project may seem wasteful from the beginning. Most informed investors will already have an idea of what the costs for a given project should be.

Also, this is the time for business owners to show passion and creativity. Potential investors may receive several proposals depending on the market. Crafting a letter that stands out is essential, especially if it is distributed unsolicited. Finally, business owners should always have someone with writing or business experience review the letter. Nothing will kill investor interest faster than typos, misspellings, misused words or unclear writing.

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