Marketing section for a VC-targeted Businessplan
By VC-targeted, I mean a businessplan that I send to VCs as part of the first contact package..
It concerns a saas/paas startup with a very clearly defined target group. We have preliminary market research results but are not online yet.
Brainstroming and some google research led to these content items:
*channels
*specific activities in these channels
*estimated conversion rate through these
*estimated costs of these measures
What do you think?
Update:
We have to write a businessplan as partial requirement for a part government funded investment into our startup. so i figured we might as well make it useful for something more than just appealing to bureaucrats..
Marketing Venture Capital Business Plan
2 Answers
Dmitry is correct in that a VC will not read your business plan. What they want to see is:
- Executive Summary (1-2 pages)
- Pitch Deck (less than 14 slides)
- Financial Model (5 years of Pro-forma)
As for content of the marketing section of the pitch, they want to see markets over a billion dollars that you can capture > 10% market share within 3-5 years. The questions that will run through their mind that you need to answer are:
- Market Size: It has to be a huge market (> $1B) or they are not interested
- Customer Pain: Is what you are solving a real customer issue
- Customer Traction: Do you have lead customers that will buy today.
- Competitors: Who out there will directly compete with you
- Will this scale: Scale means can it grow quickly or is it a niche, hard sell.
It's hard to nail all of these but you really need to try. VC's see thousands of deals a year. They pick maybe 200 to pitch. Of those 20 go to due diligence. Out of the 20, 2 get funded. So, you have to stand out as an excellent deal.
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thanks for the roundup jarie. 2 out of 200 sounds very low, i know it can't be much higher (ie. double digits), but 1%.. – Max 14 years ago
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That is for each VC partner. The reasoning is simple. They can only be on 6-8 boards at a time. The typical deal lasts 3 years, therefore, they can only do 2 deals a year or they get saturated and can't find new deals. – Jarie Bolander 14 years ago
I seriously doubt any VC would read a business plan on first contact. Create a pitch deck sticking to the 10-slide rule, albeit maybe not literally. You may find some decent guides and samples on SlideShare.
UPDATE: As you wrote that you absolutely have to have a business plan, check out the SCORE templates.
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thanks for the links dmitry. i guess the pitch really is what i should focus on. – Max 14 years ago
