I'm looking for advice on writing a business plan for a VC or Angel investor in the technology field. What are they looking for in a business plan/pitch?
There are some good basic guides on creating a good slide deck, but many fewer for business plans; a lot of the results on Google for stuff like that are keyword stuffed garbage.
Venture Capital Pitch Business Plan
Before thinking about a biz-plan guide, I'd say you need one business oriented person as partner. The document require some accounting/finance/marketing knowledge.
Because you mentioned VC/Angel, I assume that you are writing this for raising funds(equity). This is the outline I used to create my own biz plan for a pitch competition. You don't need to organize the entire document in the exact order but do include all the info.
Sorry I cannot give you a written example, cause the only one I have is my own company's.
P.S. my company is an internet start-up.
1.Executive Summary – Briefly describe the company that is planned to be formed or already formed, and give a general idea of what the business seeks to accomplish.
2.Product/Service Description – Briefly describe the specifics of the product or service.
a.Features: Describe what the product/service is.
b.Value Proposition: Why is the product/service valuable?
c.Competitive Comparison: General comparison of the features of the product/service against the existing providers of a similar offering in the market.
d.Technology: The unique or core technological features of the product/service.
3.Market Analysis – Summarize segmentation, target market, size, and growth of the market.
a.Market Segmentation: How is the market segmented?
b.Target Market Segment: Describe who comprises the target market. Mention the size and the growth of the market.
c.Market Need: What is the pain that the future clients are suffering from?
d.Market Trends: Describe the trends followed by the clients and the business participants.
e.Competition: Describe the main groups of competitors and then the individual business participants in each group. If the targeted entry market is un-served, describe the substitutes that customers are using to solve their problems.
f.Competitive Advantage: What advantage does this product/service have compared to the competitors?
4.Business Planning and Strategy – What is your strategy for growing this business?
a.Entry Strategy: Who will be the first customers?
b.Marketing Strategy: Describe the marketing techniques that will be used.
c.Positioning Strategy: Describe how the product/service will be differentiated from others in the market.
d.Selling Strategy: How will the product/service be sold? Direct sales, salesmen, web, brick and mortar, or all of the above?
e.Distribution Strategy: What are the channels of distribution?
f.Pricing Strategy: How is the offering priced?
5.Management Team Profiles – Profiles on who is running the company.
a.Management Team: Describe briefly what each member brings to the table.
b.Board of Advisors: Describe briefly what each member brings to the table.
c.Personnel Plan: Show the number of people needed in the next five years and their cost.
6.Financial Plan – Summarize your company’s financial plan.
b.Break Even Analysis
c.Profit and Loss Statements
d.Cash Flow Statements
e.Projected Balance Sheet
@Reed has given a good overview for a general business plan ... so use theirs as a good template for your table of contents to fill in the blanks.
BUT as a venture developer (invest technical IP rather than money), I wouldn't read a lot of that. I want to know:
So after you have been through all of that thinking, condense it down into 1 page (a max of 2-3 pages) and have the rest on standby if its asked for. The important part is that you have gone through it all for youself so that you ACTUALLY know what you are talking about when it comes to it.
My approach would be:
I have written lots of business plans and reviewed hundreds. The best ones have done thorough research and thinking as suggested above but then cull down the information so that every piece of information included in the plan for investors helps to sell the idea, build credibility and demonstrate the team's ability to execute. The key with plans for investors is to remember that it is a sales document - you are selling the opportunity to them. They will ask you lots of nitty gritty questions if they are interested and you better know the answers, but the written documentation is to get you face to face with them.
I am currently looking for funding and the approach I have used which has been successful in getting me in front of people so far is to send a one page concise and hard hitting executive summary and then to follow up with a meeting. I found a great template for exec sums from Pollenizer here. (The bonus with this approach is that I am only disclosing IP when I get an indication of interest.)