Effective Investor and Debt Capital Source Development For Large, Complex New Construction Projects

Large projects present a different problem for principals and are normally not possible for unproven investors. The fact is they are often outside the potential of smaller investors. Generally, large project principals must demonstrate a capacity to deliver such projects including financial and executive management for the work. Further, the investment size must up by a large multiple. Minimum initial project funding will require investors able to place $100,000 to $200,000 and actual project investments tend to run from $1 million upward. Few individual investors have this capacity. So, where should a principal with a large project begin.

First, the principal should seriously assess whether he has the experience, skills, and resources to complete the project. The assessment should focus on weaknesses for all key areas completing the project. Next, the principal should close all the non-capital Economics Construction Industry weaknesses by identifying and committing credible resources for those requirements. Verbal commitment is not adequate. Firm written commitments, background information, references, and sample work product will build a compelling investor presentation.

Second, assess whether you know prospective investment sources with capacity and potential interest in the project. Next, determine how you can develop sources if they are not available to you. Meet with your best sources and assess what their investment requirements will be and what their capacity will be. If they themselves are not interested, work with them determining how best to enlist their support developing more appropriate investment resources.

For this purpose, you should speak to:

The largest business owners you know;

The highest positioned bankers;

Other investors;

Politically connected individuals;

Country club members; and

Other large project principals you may know

In reverse order, lets consider other principals. Principals are unlikely to share their active project investors. Working with investors requires diligently confusing the discussion. Because of this, their own investors will not be yours. Instead, focus your attention on investors that they’ve identified, but are unable to bring into their projects because there is not a good match. Should your project fit better you may have identified a good source.

Recognize that developing investors is never easy. However, once you have a set of good investors you can steadily build on the foundation over the course of time. For all but the principals, this is a matter of spending time with Example Of Subcontracting key contacts (and recognizing that you can only effectively work with a relatively limited few) developing, trust, confidence and understanding. At the same time, you must carefully refine your plan and presentation to be

Summing up, large project investment is a two step process. First, you must have the credentials and team to carry off the project credibly creating investor confidence. Second, you must develop investors with adequate capacity and interest in your project.…