What makes a good business plan? – What do VC’s /Angel Investors look for in a business plan?

Every investor is different, but most like business plans that are both informative and brief. Ideally, a PowerPoint presentation of around 15-20 slides would be enough to explain most ventures. First, try to describe the business in a single sentence. Then describe the problem that your company aims to solve, how customers currently solve such problems and how your company solve such problems (presumably in some new or different way). You should describe your product line-up, and also describe your plans to develop new products over time. Investors will also want to understand your business strategy, including your pricing, distribution and promotion strategies. They’ll want to understand your revenue model, the cost of customer acquisition and your list of customers or prospective customers.

Venture Capital firms and angel investors also need to understand how big the opportunity is. You can help them by calculating the size of the market today and in the future, based on your definition of the market, and indicating who the main competitors are and what their market shares are. How does your product or service compare against that of the competition, what competitive advantages does your company enjoy and how do you think your market share will evolve over time?

Describe your team, including founders, managers, directors and advisors. This is particularly important for early stage companies, who often have few resources beyond the team.

Last, but not least, be sure to share your company’s financials, including P&L, balance sheet, cash flow statement, and capitalization table. You may also want to mention the main terms of the deal that you would like to propose to the investor.

Leave a Reply