FAQ - Step by step procedure to create a fundable proposal

To consider any project as viable the project owner should factor the following feasibility elements. This deep dive creates the fundamental roadmap to successful capital raise agnostically. 

1. The Problem you are solving: What is the pain?
2. The Solution: What is your solution? What is your product or service? What is the value proposition?
3. The Customer: Who is the user? Whose pain is being addressed with the solution? Customer: Who is paying? Are the customers and users the same? Why? Why not?
4. The Market: How big is the market? Specifically, what are the total # of potential buyers? How big is the market in USD?
5. The Team: Who is on the team? Is there ‘founder-market-fit’ - teammates with relevant industry knowledge, skills?
6. The Business Model: What is the price for each product and/or service? Is the revenue recurring or one-time?
7. The Go to Market Strategy: What are the primary distribution channels? Who are the primary channel partners?
8. The Traction: Product​: How developed is the product? Have you performed any pilot/s? Users​: How many active users are using the product or service? Monthly Active Users (MAU)?
9. The Financials: Revenue​: How much revenue have you made to date? What is their current Annual Run Rate (ARR)?
10. The Competition: Who are the direct and indirect competitors?
11. The Investment: How much capital has been raised to date? How much capital has already been spent to date?
12. The Board and Advisors: Any notable advisors with key relationships, prior successes, and/or failures?
13. The Value Add: How can we help? Introductions to customers, partners, strategics, investors, or talent?
14. The Risks: Major risks? Business model, market, legal, or macroeconomic risks? 

Required list DPR documents. After your projects qualifies techno commercially then 100% Investment can only be assured if you can provide promoter equity in form of B.G/SBLC or Proof of Fund of 16.66% or 5% capital margin.

A. Prepare Document Data Bank Ready for Investor team Forensic Audit:

1. Project Summary (Download Template)

2. Project Pitch Deck

3. Detailed Project Report DPR consists of the following: 

    3.1 Detailed Technical Report DTR 

    3.2 Detailed Financial Report DFR

    3.3 Detailed Compliance Report DCR

DPR = DTR + DFR + DCR

B. Evaluation Threshold: 

1. IRR 20+ %

2. DSCR 2.8+

3. Aggregated Revenue Growth %+ EBITDA Margin% is 70+%.

4. CFAD 35+% comfort 

C. Mandatory Evaluation Method: 

Economic feasibility & Financial Viability of either Greenfield or Brownfield or M&A.
Valuation Methodology 

1. DCF - Discounted Cash Flow Method

2. NAV - Net Asset Value Multiple Method

3. CCM - Comparable Companies Multiple Method

4. CTM - Comparable Transactions Multiple Method

D. Quants Measure for underwriters:  

1. VAR - Value at Risk
2. CAR - Cash at Risk
3. Lateral Support
4. Available indemnities/Incentives
5. Forward cover 

E. Risk Simulation: 

1. Monte Carlo Analytics

F. Mandatory Ratio to be incorporated in the DFR:

1. DSCR
2. EBITDA
3. IRR with discounting factor of 22% and 17%
4. Amortization curve (ROI V/S time in years (both EMI and Flexi based) and Net Cash Accrual combined
5. Please provide the DFR mentioned 22 ratios 

G. Compliance Elements (Proof of Project, Stakeholder Agreements, Regulatory)

1. Company Name :
2. Company website :
3. Year of Establishment :
4. Name of all Directors and % ownership :
5. Company Consolidated last 5 years turnover :
6. Company MD/CEO Name :
7. MD/CEO Mobile :
8. MD/CEO Email ID :
9. Project Name :
10. Project Sponsor/Off taker :
11. Project Location :
12. Project Description (in 500 words max):
13. Project Cost :
14. Project Scope :
15. Project Schedule :
16. Project Phases :
17. Project EPC (Regulatory Profile):
18. Project O&M :
19. Project Criteria/Quality :
20. Fund Requirement :
21. Fund Tenor :
22. Project Guarantor :
23. Project Feedstock (Raw Materials) Provider :
24. Company External Auditor Details :
25. Company Rating ( If Any ) :

        (Fill UP APKA FUNDS APPLICATION FORM)

H. Client Regulatory Corporate Profile should include the following: 

1. Date of Incorporation
2. Company Ownership Structure
3. Last 5 years consolidated turnover
4. Enumerate all the relevant Regulatory Permits and Licenses
5. Relevant Capacity, Capability and Competence
6. Client Reference 

   1) Executive Summary of the Project 75% and Project Owner 25%
             a. Project introduction – 3 to 4 lines
             b. Business Scenario – 1 para
             c. About Promoters/ Promoter company
             d. Project Structure, Investment & timelines
             e. Use of Funds (including unit economics)
             f. Projected Financials (with ratios)
             g. Loan retirement schedule
 
   2) Investment Thesis

             a. Industrial forecast of the sector (Global and Local)
               b. Outline Demand and Supply metrics
               c. Enlist sectoral compliance (Local)
               d. State Unique proposition
               e. Enumerate Company Competition Model (Global and Local)
 
   3) Structure of SPV
            Internalize the following url for guidance and create your own SPV structural flowchart:
            a. Project Fin Terminology (arzyaprinciple.com)
            b. Project Finance Mechanics (arzyaprinciple.com)
 
   4) Overview of the Market Economic Statistics for feasibility
            a. Use Deductive Model for TAM by Big 4 global, local or sectoral 
 
   5) Overview of the Business (Project) for financial viability
            a. Design unit economics of the project
              b. Enumerate & quantify all available & anticipated fixed and/or recurring cost pivots
              c. Enumerate & quantify all assured fixed and/or variable revenue recognition point
              d. Define ratios at unit level
              e. Derive Economic Viability
              f. Define Financial Feasibility
 
    6) Products and its Process Workflow and Automation in detail (all the different business units)
 
    7) Potential Revenue Recognition points ( Include all available options )
             a. Detailed Deep Dive Analytics of Revenue booking points for all revenue streams
 
   8) Employee Profile (Project Owner and other Director Details)
             a. Resume’s of Promoter & Directors and Key Managerial Roles
 
   9) Target Customer & Consumer Profile
            a. Past Reference, Present Retention & Future prospect
 
   10) Financials – Historical (if any of Parent)  & Projections in CMA format with DFR Ratios.
            a. Day 1 Capital requirement
            b. Capex
            c. Opex
            d. Cashflow
            e. Amortization
            f. Retirement Schedule
 
   11) Regulatory Filling (Land conversion and environment clearance certificate)
  
   12) Project Management Office Structure
             a. Refer link for guidance. Roles & Responsibilities (arzyaprinciple.com)
 
   13) Project Company and all SPV stakeholder KYC
 
   14) Project Promoter KYC
 
   15) Project Architect/Designer Competency Synopsis and KYC Details
         Most of the cases the Design Architect is third party with the following coordinates:
            a. Execution Regulatory License
            b. Organizational Holding Structure
            c. Organization and Promoter KYC
            d. Organizational Financial Performance ( Last 3 years )
            e. Capability Solvency
            f. Organization Risk Rating
            g. Relevant Work Experience
            h. Independently verifiable work completion Certificates
 
   16) Project EPC Competency Synopsis and KYC Details.
          Most of the cases the EPC Company is third party with the following coordinates:
            a. Execution Regulatory License
            b. Organizational Holding Structure
            c. Organization and Promoter KYC
            d. Organizational Financial Performance ( Last 3 years )        
            e. Capability Solvency
            f. Organization Risk Rating
            g. Relevant Work Experience
            h. Independently verifiable work completion Certificates

   17) Project Facility Manager or Operations & Maintenance Competency Synopsis & KYC Details
         Most of the cases the O&M entity is third party with the following coordinates:
            a. Execution Regulatory License
            b. Organizational Holding Structure
            c. Organization and Promoter KYC
            d. Organizational Financial Performance ( Last 3 years )     
            e. Capability Solvency
            f. Organization Risk Rating
            g. Relevant Work Experience
            h. Independently verifiable Service Level Guarantees SLG compliance of existing projects 
            i. Independently verifiable Service Level Assurances SLA compliance of existing projects

   18) Project Feedstock/Offtake Competency Synopsis and KYC Details
          Both the Feed Stock ( include all supplier of raw materials ) and Off taker ( include all the buyers of finished product ) should have the following coordinates:
              a. Execution Regulatory License
           b. Organizational Holding Structure
           c. Organization and Promoter KYC
           d. Organizational Financial Performance ( Last 5 years ) 
           e. Capability Solvency
           f. Organization Risk Rating
           g. Relevant Work Experience
           h. Independently verifiable Letter of Intent to supply/buy which should include the Cost, 

                  Scope, Schedule and Quality of the raw/finished product.

   19) Risk Assessment (ICRA Exposure Risk Report)
              a. Optional
 
   20) Project Location and Logistics
             a. Location of project and how to reach there – road, train, air
             b. GPS Coordinates if available
 
    21) Detailed CSSQ (Cost, Scope, Schedule & Quality)
             a. With reference to all expense items in the project (itemized BOM for the Project)
 
    22) Detailed Work Break down Structure (WBS)
  
    23) Implementation Gantt Chart
            a. Based on WBS derive Gantt and PERT 

    24) Provide SWOT ( Strength Weakness Opportunity Threat ) & PESTLE ( Political, Economical, 

            Social, Technical Legal and Environmental) impact of your project
            a. Point 4 is industry specific and this is project specific
 
    25) Available Risk Hedge Elements
          Project Specific Risk Elements ( CAR, VAR, Lateral Support, Available Indemnities, Forward 

           Cover ) .
             Valuation is based on:
              a. DCF Asset
              b. NAV
              c. CCM
              d. CTM 
  
    26) Mitigation Measure incorporated to Rate the project risk exposure range between low to
          medium
              a. Ring Fencing measures to hedge Risk. 

               b. Refer for guidance ​Project v/s Corp Finance

1. Executive Summary
   
2. Investment Thesis of the Project
   
3. Product and its Process Existing and Proposed ( Workflow and Automation )
   
4. Structure of the SPV ( If Any )
   
5. Audited Balance Sheet / Corporate Bank Statement for Last 3 years ( if affected badly by Pandemic then last 5 years in ₹ )
   
6. Project Owner and Company KYC
   
7. Financials – Historical details of the existing Project Owner Company and Projections in CMA format including the DFR Ratios in $ U.S.D and ₹ Indian Rupees
   
   1. Day 1 Capital requirement
      
   2. Capex
      
   3. Opex
      
   4. Cashflow
      
   5. Amortization
      
   6. Retirement Schedule
      
8. Citation of License to operate and Approval to Build
   
9. Details of the existing feedstock ( if any ) and Offtake/Work Order ( if any ). Citation of contract Copy ( Profile , Balance Sheet 3yrs and  Risk Rating )
   
10. Audited existing Asset valuation Report
    
11. Regulatory certification ( environment clearance and other statutory permissions)
    
12. Fund Utilization Scope and Return On Investment Justification
    
13. Project Owner/s Equity Participation Details
    
14. CSSQ ( Cost Scope Schedule & Quality ) 
    
15. Work Break Down Structure
    
16. Provide  SWOT ( Strength Weakness Opportunity Thread ) & PESTLE ( Political,  Economical, Social, Technical Legal and Environmental) impact of your  project
    
17. Implementation Gantt Chart
    
18. Risk Assessment ( ICRA Exposure Risk Report ) and available Hedge Elements
    
19. Mitigation Measure incorporated to Rate the project risk exposure range between low to medium
    
20. Regulatory Compliance including FEMA clearance ( If Required )

1. Executive Summary
   
2. Details of the existing feedstock ( if any ) and Offtake/Work Order ( if any ). Citation of contract Copy ( Profile , Balance Sheet 3yrs and  Risk Rating )
   
3. Company, Promoter and Plant KYC
   
4. Product and its Process ( Workflow and Automation )
   
5. Consolidated Balance Sheet / Corporate Bank Statement of the Business Unit for the last 5 years
   
6. Operational Status Report of the business Unit ( Economic Feasibility, Financial Viability, Location details , logistic et al. )
   
7. State the consolidated liability statement certified by the seller C.A
   
8. Financial  Analysis in CMA format including the DFR Ratios (to be attached as PDF in main  proposal and separate spreadsheet as attachment )
   
9. Structure of the SPV and Bank Appraisal Note ( If Any )
   
10. CA Audited Asset & Liability Statement
    
11. Certified auditor Valuation Statement
    
12. Existing or Expired ( to be renewed ) Environmental and Operational Licenses
    
13. Existing production Licenses
    
14. Regulatory Filling citation ( All relevant for the business unit )
    
15. Provide detailed CSSQ ( Cost Scope Schedule & Quality ) 
    
16. Provide a detailed Work Break Down Structure
    
17. Provide SWOT ( Strength Weakness Opportunity Thread ) & PESTLE ( Political,  Economical, Social, Technical Legal and Environmental) impact of your  project
    
18. Implementation Gantt Chart
    
19. Risk Assessment ( ICRA Exposure Risk Report ) and available Hedge Elements
    
20. Mitigation measures incorporated to Rate the project risk exposure range between low to medium
    
21. Regulatory Compliance including FEMA clearance if Required

       APKA Acquisition Methodology    Standard Operating Procedure