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VC_Secrets_What_the_Business_Plan_Books_Dont_Tell_You
| VC Secrets: What the Business Plan Books Dont Tell You
VC Secrets: What the Business Plan Books Don't Tell You
By William F.(Bill) McCready, www.VenturePlan.com
Most business plan books and software do a thorough job of
teaching you to describe your business from an entrepreneur's
perspective, focusing on your product or service.
Unfortunately, if you wrote your plan in order to obtain
funding, it's vital to write it from an INVESTOR's point of view.
HOW INVESTORS READ a BUSINESS PLAN
A potential investor will initially spend only 5 minutes with
your plan. The following areas will be evaluated, each area
taking about 1 minute!
1. Determine the characteristics of (1) the industry and (2)
this particular company.
- What other publicly held similar companies are there? - Is
there a larger company that is extremely successful? - Is the
company in a 'glamour field'? (important to ensure a good public
offering)
2. Determine the terms of the deal.
- How much of the company is being sold for what price? - What
is the form of debt or equity being requested? - How will the
funds be used? o To retire old debt (bad idea)? o To undertake
new activities that will, in turn, increase profitability?
3. Review the bottom line with special emphasis on years three
through five.
- Earnings or potential earnings are reviewed to determine
company's valuation. - Sensitivity analysis, or what if analysis
to see how the business model adjusts to changing prices,
expenses and competition.
4. Determine the caliber of the people in the deal. (The most
important aspect of the business plan!)
- What is the track record of the founders and managers? - How
much balance and experience does the inner management team
possess? - How long have the members worked together? - Who are
the banker and accountant, and what are their credentials?
5. The marketing plan is reviewed with careful consideration to
current and future threats.
- Is the product or service in demand now or will it be in the
near future? - What is the Unique Selling Proposition for the
product? - What other company or companies are already in this
space that could leap frog this business? - Can the customer be
easily identified and marketed to successfully?
*** =============== SAMPLE BIZ PLANS =============== ***
High Tech and Traditional Business Plans
We find that few entrepreneurs have actually seen the “real
deal”. Find out how you can order a sample business plan to use
as a guide as you prepare your own. Go to
http://www.ventureplan.com/business_plans.html.
***
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