To track your cash flow, set up a process whereby you approve all payments before they go out, and review your accounts-receivable balances at least weekly. Finally, you should implement a 90-day rolling cash flow forecast:

so the projected return on the cash flows that you and your investors will share would need to be well above the 25%.

Next Steps As you continue to work with a prospect, move toward signing a nondisclosure agreement; then the owner can send you some historical financials. This may take a while because owners will be reluctant to share confidential information.

For directly sourced prospects, some of the information for the initial filters will be available from business directories and other public listings

In this chapter, we have added some quantitative filters to help you assess the enduring profitability of a prospect: Does it have a high EBITDA margin? Does it have recurring customers? Does it have fragmented customers and suppliers (no concentration)? Does revenue growth come from the right places? Does it have steady sales (not cyclical)?

since he would operate Zeswitz as a stand-alone business.

Time your presentation Early in the meeting, ask your prospect how much time they have. You should be flexible enough to adjust the arc of your story line to whatever time you are given. And you may have to keep readjusting: If the prospective investor asks questions, you may have to shorten your presentation again, whereas if they seem engaged and

If, as we will recommend, you pay for your new business in part by borrowing against it and in part with equity, your return on equity will be even higher and well above investment returns available elsewhere.

Arrive on time This simple act communicates respect for the investor with whom you are meeting and quietly demonstrates that you are an organized person. One longtime investor in private companies commented: “If someone isn’t able to arrive in my office on time, why should I believe they are capable of more difficult tasks?” Of course, no one inves