You need to secure money for your project. You visit venture capitalists to see if you can get that money. A venture capitalist views your project as a pure investment. A venture capitalist has no emotional attachment unlike you. You need to write a proposal that is structured around a venture capitalists needs, not yours. What may interest you may have no relevance to your potential funder. You need a business plan that is 'investor-focused'.
An investor focused business plan contains relevant information about your project. It addresses concerns, questions and should allay fears that any potential venture capitalist may have. It should meet their needs exactly. Venture capitalists exist to make substantial gains. They want to see a good return on investment. By compiling an investor focused business plan, it will be clear to Venture Capitalists that you are focused, prepared and competent.
There are four areas that need to be addressed: Management Responsibility Know Your Markets Know Your Product Know How Management, Markets and Product Make Money
Management Responsibility The strength of management assigned to the project can make or break your proposal. Venture Capitalists need reassurance that you can manage their money. They will want to see a demonstrable track record in areas specific to the project you are pitching. The ability of management will be tested so be very prepared.
Know Your Markets Venture Capitalists will need to see where your income will be coming from. Your company must demonstrate a strong understanding of your customer base and be able to fulfil their needs. Your plan also must address any potential new or growth markets. Illustrate any research you have conducted to emphasise this.
Know Your Product Venture Capitalists will want to fully understand your product. They will want you to demonstrate how the product that they are funding will attract customers. The information in this section must be extensive and also feature any potential expansions or upgrades that your product will feature. This will show that you have thought about long-term growth.
Know How Management, Markets and Product Make Money It must be demonstrated that management can create links and paths between customers and product. This element must be very strong as ambiguous information, or an assumed relationship will scare off any potential funder. Create a step-by-step guide of how their money will be processed and how the customers money will be received. This has to be clearly shown.
Tie in these points together and you are already in the top 3% of all venture capital submissions. Good Luck!
Dominic Dirupo survived the Tech Boom and Crash with Goldman Sachs and Deutsche Bank after graduating with Honours at London's City University. Dont Buy Information is an online resource designed to help every consumer make a business decision for free. No Strings Attached.
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