What Is the Role of a Business Plan in Getting Venture Capital Funding?
If you are trying to raise money from a venture fund, an angel investor, bank, finance company, or your friends and family you will be asked to produce your business plan. Attorneys, accountants, office landlords and prospective employees will also ask for your business plan.
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Function
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A business plan describes your business idea in detail so others can judge whether they think it will be successful.
Feaures
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Elements include a complete description of your company, products and services, industry and who are its major competitors, revenue plan, description of the target market, marketing plan, build-out plan, employment needs, manager and advisory board bios, and financial projections for the first three years.
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Size
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Venture investors commonly receive hundreds of business plans each month and are looking for those that show the entrepreneur has some savvy about how to present the key points of an idea in fewer than 50 pages without personal drama or hype.
Misconceptions
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In applying to present to angel groups or venture funds you may be asked to fill out online forms. Your business plan will supply the copy to cut and paste into those forms. It will help you write copy for your website and brochures.
Considerations
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A sharp, well researched and well written business plan introduces you as an entrepreneur. If it appears disorganized, poorly researched or immature in its approach to producing revenues, controlling costs and booking profits, your potential investor will receive a bad first impression of your business acumen and reliability as an investment.
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References
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- Photo Credit Image by Flickr.com, courtesy of Kevin Dooley
