Considering what I know about renewable energy, what are some of the key things I need to be able to explain to a potential funder of my project?
The biggest thing to focus on when explaining a renewable energy enterprise to a potential investor is the growth the industry is expected to experience in the near future. As the supply of non-renewable energy sources dwindle and their cost to the consumer rises, the demand for renewable energy sources will rise. This guarantees a demand for my product and a very strong chance of a return on their investment. After establishing the demand for my product, I would need to demonstrate my experience in the industry and my ability to turn invested capital into profit and grow my enterprise. It would also be wise to explain how investing in renewable energy reflects well upon the investor.
What finance-based processes would I use to explain our potential for success?
Return on Investment (ROI) and net present value (NPV) are two simple and easy to understand calculations that reflect the funds invested and the gains on said investment. Keeping the calculations simple in the short term with ROI is beneficial as it simplifies the figures to what amounts to the viability of a project . Using NPV clearly shows the money invested, when the investment begins to turn positive returns, and how much value is added to the enterprise after the investment. These two figures combined can illustrate a strong incentive to invest in a renewable energy enterprise.
That’s a good point about getting in while the industry still needs financing.
Hi there! The point in your first sentence about the potential for growth is very on the money. In regards to that, I think a great point too is that the investor should invest now before more investors come along and you no longer need them. Another great point is your experience in the industry. If you have it, then I think it would be extremely wise to show! Nice post.