get funded - structuring your start up documents
DESCRIPTION
A guideline for how a strong business plan should be prepared for funding and the common errors that most entrepreneurs make.TRANSCRIPT
GetFunded
StructuringYourStartUpDocuments
emaginegroup Foundedin2003 Globalventuredevelopmentfirmwithinvestmentsin15countries
acrossmultipleindustries Groupmadeupof:
emagineconsulting–ConsultingandResearch iMedia–GraphicDesignandWebDevelopment teslacommunications–TechnologyPlanningandManagement WickedCode–SoftwareDevelopment 4SquarePeg–HumanResources
Weareventurecatalysts Weworkwithentrepreneursineverystageofbusiness
developmentfrombrainstormtoprivateequityinvestment
OurHistoryInVentureCapital Inthepast5years
Wehaveheardover600elevatorpitches Wehavereceivedover400executivesummaries Wehavereadandassessed100businessplans WehaveinvestedoverUSD400millioninindustriesranging
fromtechnologytofashionandpublications OurcurrentinvestmentportfoliostandsatUSD700million
Asaresult,wehaveaspecialunderstandingofentrepreneurshipandhowtogetbusinessesfunded
OurFundingProcessBrainstorm
InternalBusinessPlan ~50–150pages
Teaser 1–2pageintroduction
ElevatorPitch ~5minutequickpitch
PitchDeck ~15–20slides
BusinessPlan 20–30pageplan
ExecutiveSummary ~2pageintroductiontoBusinessPlan
WhyDoEntrepreneursNeedBusinessPlans Writtensummaryofaproposedbusinessventure Helpsusunderstandanopportunityandhowtobestexploitit
Givesablueprintfortheoperationalandfinancialviabilityofabusinessventure
Explainsmarketingopportunities,go‐to‐marketstrategyandpostlaunchpromotionalplans
Identifieskeypersonnel’sskillsetsandexperience
Increasesthechancesofbusinesssuccessoreliminationofabusinessideabasedonfeasibility
Specifiesthepotentialriskstotheventure’ssuccess Providesabaselinetocompareprojectedvs.actualresults
WhyDoVentureCapitalistsNeedBusinessPlans Helpsustoseethattheentrepreneurhasthoughtoutthebusiness
idea
Showsusthattheentrepreneurhasdonetheirhomeworkonhowtobringtheconcepttomarket
Providesuswiththefinancialrequirementsforstart‐up,productionandoperations
DefinesthereturnoninvestmenttotheVC
Setsatimelineforlaunch,growthandexpansion
6C’sofBusinessPlans Complete Clear
Credible Compelling
CustomerFocused ConcernfortheInvestor
DoYouKnowWhatYou’reGettingInto?
BenefitsandChallenges
WhatYouMayNotKnow
ElementsofABusinessPlan
WellStructuredBusinessPlan ExecutiveSummary MissionStatement
BusinessDescription IndustryAnalysis
BusinessStrategy CustomerAnalysis Product/ServiceOffering
MarketingStrategy PromotionalStrategy
CompetitorAnalysis TeamComposition
OperationalPlan TechnologyPlan
Research&Development FinancialForecasts InvestmentStrategy
SupportingAppendices
ExecutiveSummary “TheElevatorPitch”thatsummarizesthebusinessplaninto2
pages
ThisshouldbewrittenlasttoassurethatallkeyelementsareexplainedfirstinthebusinessplanandthenrelatedintoastrongExecutiveSummary
IftheExecutiveSummaryisn’tstrong,thebusinessplanwillneverberead
MissionStatement Entrepreneur’sVision Whatisthebusiness?
Whatwillitbecome? Whatwillitstandfor?
BusinessDescription Introduceyourbusinessandexplainit
LegalStructure Locations MarketNeed(Pain)‐>Solution BusinessGoalsandObjectives OverviewofUniqueAdvantages WhatBenefitWillItProvideTheCustomer ProfessionalServices
Attorney Accountant Consultants Insurance
IndustryAnalysis Currentindustrypositionandtrends Potentialtrendsthatcanbeleveragedforbusinesssuccess
Totalsizeofthemarket‐>Howmuchcanyouserve? Whatneeddoyourproducts/servicessolve?
Entrybarriers SWOTanalysis
MarketingandStrategyPrinciples
BusinessStrategy Howwillyougaincompetitiveadvantage? Whatmakesyouunique?
Howwillyoumeetyourgoalsandobjectives? Whatisthecompanybrand?
Whatwillitcosttoenterthemarket,establishpositionandmaintainit?
CustomerAnalysis Whoisthetargetcustomer? Whatistheprofileofthecustomer?
Demographicandpsychographicbreakdown CustomerNeedAnalysis Buyingcriteria Valueproposition
Product/ServiceOffering Tellusaboutyourproduct/service
KeyFeatures UniqueAdvantages
Whatdoesitdo/Whatneeddoesitsatisfy?
Howwillpeopleuseit? Wheredoesdevelopmentstandcurrently? Arethereanypatents,trademarksorcopyrightsthatwillaffect
productdevelopment? Howwilltechnologicalchangesaffectproductdevelopment?
Whataretheshortcomingsandhowdoyouplantoovercomethem?
MarketingStrategy Provethataprofitablemarketexists Demonstratecustomerinterest
Howwillyoubuildawareness? Howwillyoupositionyourproduct/serviceandbrand?
Whatisyourpricingstrategy? WhatistheGo‐To‐Marketstrategy? Whatisthesalesanddistributionstrategy?
Isthereaserviceplanand,ifso,howwillitbeimplemented/followed?
PromotionalStrategy Advertising PublicRelations
PersonalSales WebsitesandSocialMedia
DirectMarketing Telemarketing ArticlesandPublications
Budget?
CompetitiveAnalysis Informationoncompetitors’marketshare,productsandstrategies Whatareyouradvantagesoverthecompetition?
Howelsecanyoursolutionbeachieved? Competitorresponse
Whatwillittakeforcustomerstoswitchtoyouroffering? Howwillcompetitorsrespondtoyourmarketentry?
TeamComposition Breakdownofkeypersonnel
Education SkillSets ProfessionalExperience Directrelevantindustryexperience Accomplishmentsandtrackrecord(P&Lresponsibility) Experienceoftheteamworkingtogether StatusandNatureofCommitment
Additionalrolestobefilled
TalentAcquisitionStrategy BoardofAdvisors BoardofDirectors
OperationsPlan Detailthedailyoperations Structure,OwnershipandLegalForm
OrganizationChartwithresponsibilities Leasesandagreementsnecessarytooperations?
Howwilltheofferingbeproduced? Requiredresources Capitalexpenditures In‐houseand/ourOutsourcedproduction
PostStartupProductionExpansionCosts
SupplierAgreements RequiredLicensesandPermits
TechnologyPlan Howwillyourventureuse/utilizetechnology?
Cutcosts? Increaserevenues? Streamlineproduction/productdelivery? Obtainmoreclients/customers? BusinessInformationSystems?
Howwillithelptoachievebusinessgoalsandobjectives?
Whatwillbethecoststoimplement,maintainandupgrade? Whatarethetrainingcosts?
Research&DevelopmentPlan Doesyourofferingrequireon‐goingresearchanddevelopment? Howwillitbefundedandcarriedout?
Whatindicatorswillbeusedtodeterminewheretheresearchanddevelopmentshouldbedirected?
Howwillitbeimplementedintoproduct/servicedevelopmentandmanagement?
Howwilltheresearchownershipbecontrolled?
FinancialForecasts CapitalExpenditures SalesForecast
Willyouselloncredit? Whatwillyourpolicybe? Whatwillitcostyou?
BreakevenAnalysis 3SetsofForecasts
Optimistic MostLikely Pessimistic
MonthlyProformaforYear1 QuarterlyforYears2–5
InvestmentStrategy Amountofrequiredcapital Personalinvestment
Useoffunds ReturnonInvestment
Exitstrategy
Appendices Resumes
Owners Shareholders KeyPersonnel
Financials StartUpExpenditures IncomeStatement(1year) CashFlowStatement(12
months) BalanceSheet(1year) PersonalFinancial
Statements CompetitorWeaknesses
RiskAssessment RequiredBusinessEquipment
withQuotations MarketResearchStudies
IndustryStudies Research&Development KeyAgreements
TechnologyWhitePapers AdvertisingMaterials(if
available)
HowDoWeDecideWhoToFund?
ThreeTests RealityTest
Doesthemarketreallyexistfortheoffering? Canyoubuilditwithinthecostsdefinedintheplan?
CompetitorTest Companypositionrelativetokeycompetitors Management’sabilitytocreateacompanythatcangivea
competitiveadvantageoverrivals
ValueTest Willitmakemoney? Willitcoveroperatingexpenses? Doesitgiveinvestorsanattractiverateofreturnorahigh
probabilityofrepayment?
ThingsThatKeepUsFromFunding Lackoflogicinthedevelopment
offinancials Unrealisticfinancialsorlackof
detail Lackofplanningforvariablesfor
business Underestimatingupfront
marketing&advertisingcosts Location!Location!Location! Noresearchonupfrontcosts,
purchasesandexpenses NoallowancesforA/RandA/P Forgettingtoincludeareasonable
salary PieInTheSkyProjections
Noquotesforrequiredproducts,servicesandequipment
Failingtorelatetoarealneed/requirement
Tryingtobeallthingstoallpeople
NoGo‐To‐Marketstrategy
“Wehavenocompetition”
Businessplantoolongortootechnical
Noriskanalysis
Poorlyorganizedbusinessplan
Badlydesignedorun‐proofreadbusinessplan