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?

There are many key things potential funders need to know before they invest in a project. A business plan is something every new business needs. Without a business plan, there would be complete chaos and nothing would get accomplished. A business pitch could help sell an idea to the funders but one has to make sure they want to invest in you as a person. If they don’t trust or like a person, then why would they invest in that person’s business? It is a complete package of selling the business, the product and yourself as well. Additionally, you need to know how much money you need from an investor. You need to know where this money is going, as the investor would probably like to know as well. Finally, you will need to know how long it will take to break even and make a profit. The demand for the specific product would have to be examined and explained. The investor needs to know that the business will be successful and they will get their money back at a profit. These steps are important for any business, not just in the renewable energy field. An investor should understand renewable energy and its benefits if he/she does not know about it already.

What finance-based processes would I use to explain our potential for success?

There are many finance-based processes to explain the potential for success. One way is by measuring the return on investment (ROI). A more detailed and effective way would be to calculate the return on equity (ROE). A ROE analysis is a process encompassing all sales, cash, and other transactions a business may make. Figuring out the cost of capital is also a good process to outline success. There are two parts in figuring out the cost of capital which are calculating the cost of debt and cost of equity. When doing this you would get the weighted average cost of capital or WACC. Finally, you could also calculate the net present value (NPV) or net present worth (NPW).

Works Cited

Berry, T. (n.d.). How to Get Your Business Funded. Retrieved October 21, 2014, from Bplans website: http://articles.bplans.com/how-to-get-your-business-funded/