ROI for for VC investment and exit plan how to prepare & present?

We are preparing a project report for invesment oportunity through VC, ours is a IT based company, we are in a fix about the return on investment to be offered and a clear exit plan any one to advice

Instead of focusing on the actual current ROI, break it down by using the Du Pont method of calculating ROI.

ROI = (Net profit after taxes / sales) x (Sales / Total Assets)

If you look below, you can see several scenerios for profit margin and asset turnover that yield the same ROI.

ROI = M x T
18% = 9% x 2
18% = 6% x 3
18% = 3% x 6
18% = 2% x 9

Plug in what you believe would be an ideal ROI, and then work backwards to see what kind of profit margins and turnover is required to achieve it.

Then focus your presentation on how you can achieve the ideal profit margin and ideal turnover rate from the current figures.

For most VCs, an IPO is the ultimate exit strategy. You can also try to sell the VCs stake to Hedge Funds, Private Equity Groups, and Pension Funds.

They are interested in your model for growth and the assumptions the model is built on. So calculating an NPV on the investment assuming the business is a going concern is fine. They will decide how to monetize their investment so don't put too much effort into this part of your presentation.

Having dealt with VC investments through three startups of my own I fully understand your situation here. They are going to want to see how CASH is burned prior to your forecast for profits. It must be conservative and have all types of barriers to entry (competition) road blocks that you have built into your investment strategy. There is plenty of VC money on the sidelines so spend the time on this one!

Most VCs will expect an ROI of 20% or greater, since one can realistically get 10-15% in far less risky opportunities.

The "exit plan" would typically be taking the venture public, which should have a minimum expected dollar volume of $30-50M to be taken seriously. A promised reward of a mixture of cash and options will likely attract the most initial capital.

Yes, if you are dealing with the right vc, a sound business plan and the last 3 years of revenues and expenses should be enough for them to ascertain the rest.

Depending on sector and market risk 20% roi return seems very low for a vc to accept.

I would seek professional legal and accounting help now!