Hi Cheryl,
A business plan that offers too much detail can be just as much of a turnoff as a plan that skips fundamental aspects of the proposed venture. Just keep in mind, especially if shop your business plan on a unsolicited basis, that nobody wants to read a book – at least not that kind of book. ?
Business plans that arrive at a VC firm or investor group are usually screen by a junior associate, who has neither the time, experience, and decision-making power to fully appreciate every detail of your plan. If your plans survives this first round, it’s usually reviewed again by a more senior associate before it goes in front of anybody, who can make an impact on whether or not your plan is introduced to the managing partner or investment committee.
RobertJ is right that a good way to start is by submitting a strong executive summary; however the format depends on the firm’s individual requirements. So if they ask for a business plan, go with it. Another good idea is starting out with a road show (power point presentation). This format is more entertaining and a good basis to summarize your proposal in a nutshell.
In the event you need further guidance on how to create a professional business plan, please feel free to download our document outline, sample plan, and business-planning guide. They are available as free downloads at:
Business Plan Outline
http://www.FastVentures.com/global/en/solutions/bizplans_early.html
Reference/Sample Plan
http://www.Insights.FastVentures.com/is-bin/samples/bp10222002/index.php
Business Planning Guide
http://www.Insights.FastVentures.com/is-bin/guides/htg01082008/index.php
To answer your question as to what kind of return you should offer, please note that VCs, angles, or other professional investors work with their own perception of value. They usually work with discount factors to assess the risk involved with investing in development stage companies, which could mean that if you tell them that you’ll have $100 in the bank, they believe that you’re overdrawn by $100 – if you’re lucky. If you are working with professional investors, and they are interested in investing, they will present a term sheet, which reflects their terms and conditions.
If you are interested in a more controllable vehicle for raising equity financing, take a look at private placements or Regulation D Offerings. There is a series of articles available on our website that you may be interested in:
Private Placements – Myth or Real Option
http://www.Insights.FastVentures.com/is-bin/reviews/rev_01252008.php
Private Placements - Finding the Right Investors
http://www.Insights.FastVentures.com/is-bin/reviews/rev_06302008.php
In any event, your capital requirements are a little low for equity financing.
I hope this helps.
Mark
FastVentures7/30/2008 12:57 PM
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Jackson Steiner
http://www.JacksonSteiner.com
Advanced Document Design for entrepreneurs, intermediaries, and the financial services industry.
http://www.Publications.FastVentures.com
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