Most companies underestimate significantly the time required to complete a financial plan. In fact, the search for financing a business needs to budget between 500 and 1000 hours of work for the process of raising capital, spread over a period of 6-9 months.

The key processes in the process of mobilizing funds include 1) the refinement of the business plan, offers and other materials of the company due diligence, 2) developing a comprehensive approach, the list of investors potential target, 3) contacting this list and to respond to requests from investors due diligence, and 4) the negotiation of the transaction.

Completion of the business plan typically requires at least 200 hours of work. This time is spent on conducting market research to validate the opportunity, developing a comprehensive financial model, determining the most effective way of establishing the business strategy, and indeed the writing and reading of the business plan.

The next step, developing a comprehensive settlement, potential investors targeted list is very long. There are thousands of potential investors, each of which has very different tastes regarding the types of initiatives that interest them. Some investments by market sector (eg, health care vs. telecommunications), (seed stage vs. later), geography, or a combination thereof. Several hours must be dedicated to determine which investors are the right fit for your business. This process involves creating a master investor list, visit the Web site each investor to view investment criteria and past investments, and to determine who is a good contact with the company.

To see how easily add time, consider that only about 25% of prospective investors who show an initial interest in a transaction made progress in the company detailed due diligence. Only about 10% of this increase by 25% to an offer in good faith of funds, of which only 25% of these actually result in an investment transaction. So complete a financing transaction requires, on average, with about 160 pre-qualified potential investors.

The due diligence process, where investors scrutinize the investment, may also take a long time for the company. Investors often ask numerous documents, some of which can be easily retrieved from files (eg, before taxes), while others may take more time to prepare (for example, market analysis, lists of Customers with past purchases, contact information, etc.). Finally, the negotiation of a transaction can take a long time depending on the complexity of the operation and the number of parties involved.

Too many companies fail to raise capital because they are not aware of the importance of the requirements of time to do so. These companies who understand these requirements and budget accordingly are most likely to persevere and end up with the capital they need.