California Investment Network

Business Plan Tips

What Investors Are Looking For In A Plan

Investors, whether angels or VC's, are looking for the same things when reading a business plan. They want to know how big the opportunity is, whether this is the right team to exploit the opportunity, who the competition is, what the risks are, and why they can expect this team to implement successfully. Your job in writing the business plan is to address these questions convincingly and clearly.

Emphasize Your Real Strengths

Highlight what your team brings to the table. If your business hinges on a particular competency (for example, understanding the procurement process), your plan will be more persuasive if one of your team members knows something about it and that is brought out in your plan. Rather than including generic resumes of team members, tailor the resumes to draw out the experience each member has that will make him or her a valuable contributor.

Get To The Point And Make It Clear And Comprehensive

Investors see many business plans. A 20-page plan which clearly lays out your business is far more likely to be read than a 100 page plan. Today, some entrepreneurs are using a 15 slide Powerpoint presentation. If your text is short and punchy, you won't need to repeat yourself, because the reader won't be bogged down keeping ten chapters in their head. Reading the same thing over and over, even if it's in different words, can get really tiring. The more you use brevity and give each concept a single home in your document, the more people will want to read it.

Write In Plain English

If you can't explain your idea in English, either you don't understand what you're talking about (What is a transaction enabled atomic journaling database server, anyway?) or you haven't simplified the idea enough. Think, revise, and try again.

Get Rid Of The Hype

Yes, we know you will be the "premier insert product category here of the Internet, achieving 99% market penetration with 60% customer retention in 3 months". Your product will reach "new heights in customer experience through the use of personalization and one-to-one profiling and customization". It will be "user friendly" because you will be creating a truly "ecstatic customer experience". It is a "quantum leap forward" in the marketplace for product category here. Um, yeah. Believe me, we've read it before. About a dozen times today, in fact. (And by the way, the phrase "quantum leap" really doesn't mean anything.) Stick to a tight, simple explanation of your idea. Convince your reader you'll be the best because your idea is the best, not because you can string a dozen buzzwords together.

Use Quantifiable Information

In each section, back up your assertions with solid facts. Even if you are a new venture and cannot give specific figures on the performance of your business, quote figures for the industry or your competitors. These real figures carry more weight than your assumed projections and give more reality to your plan.

Choose A Huge Market

Especially in the internet world, investors are looking more at the market than at the detailed specifics of your financials. Choose a market that is big enough to be an obvious good opportunity. A business which targets teenage girls who listen to music and has a reasonable chance of capturing 90% of the girls that are online is a huge opportunity. A business which targets net-savvy SAAB mechanics who need prosthetic limbs is not.

Registered Investors

United Kingdom > London

I'm a venture capital deal person that invest directly and also raises capital through a group of high net worth investors Ive formed. My primary role is structuring and procuring private equity investments, either directly or through participations in Private Placement transactions. Prior to becoming independent in 2005, I worked in the Canadian private equity markets raising capital for companies in the mineral resource space. I was a managing partner in a private equity firm, and have also worked for a investor relations firm Canada. I have over 10 years of experience in areas of finance, going public consulting, recruitment and management consulting.

$100,000 to $7,000,000

United States > California

I am an ex "Big 4" CPA (7 years at firm) with heavy transaction experience including 4 years investment banking/consulting, 7+ years senior financial executive /division CFO (division was 50+% of NYSE company). Currently CFO for manufacturing company and founding partner of health care development LLC

$20,000 to $80,000

United States > Minnesota

My firm has helped raise over $200 million in non-dilutive capital for companies over the last 9 years. We specialize in finding cash grants from cities and states that are willing to invest in your product, idea and existing business as long as you move the labor intensive portion of your business to their city. In order for you to qualify you must be able to create 100 jobs over a 5 year period and be able to move the business to a state that is willing to invest in your company.

$500,000 to $100,000,000

United States > Florida

I have an extensive investment banking and entrepreneurial background looking for companies looking for money with rapid growth potential and interested in a liquidity event within three years.

$15,000 to $100,000

United States > California

1) I run a US based Angel Investor group with two chapters in Palo Alto and Reno. We make investments under $1 Million. 2) I am a partner at an investment bank focusing in helping CEOs raise financing rounds between $1 M and $30 M. We have partners worldwide and have access to a worldwide network of investors. We also make direct investments 3) I also invest personally, either though US Angel Investors, or with other partners

$50,000 to $10,000,000

United States > California

Private investor with 5 years commercial real estate investment experience purchasing parking lots, garages, self storage, & industrial outdoor storage. Received recognition for parking lot investments and programs. Member of the Commercial Real Estate investment group. Access to over $150 million in capital from three sources.

$1 to $500,000

United States > Georgia

A trust with assets in excess of $5 million, income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years. Looking for investment opportunities.

$50,000 to $100,000

United States > California

As an accredated investor I am seeking alternate investment opportunities. I have experience in high tech start-ups as well as funding businesses and am looking for deeper diversication of my portfolio.

$25,000 to $150,000