#3 from 10 – The FREE course for raising capital from VC firms and angel investors

The executive summary and the business plan

We talked about the way you can get a venture capitalist or an angel investor to become more interested in your company. The only thing I might add is that in the case of an angel investor your relationship with him and getting him to like you as a manager and as a person is important. Angel investors do not invest only in businesses but also in the people that run ventures. Let’s say you got that right and they are interested in knowing more about your venture. How can you do that? By showing them a rock-solid business plan and a clear executive summary.

A business plan has to be detailed and compelling. Every assumption you make in it regarding future development must be realistic and bases somewhat on real factors. Many entrepreneurs hire someone else to do the business plan. If that is your case make sure you know what each letter or number in the plan means and that you have an exquisite general understanding of the way your market works and how your company is placed in this market.

A well-done business plan has to highlight any past accomplishments or milestones achieved by your enterprise. This will show that your team can handle challenges very well and generate revenue. The relevant market of you business should be defined well and realistic.

It is all about your product or service so explain what sort of need it fulfills, what is the relationship with your customers and present a detailed plan on how you are going to acquire new. Probably even more important is showing how you will keep your customers and beat the competition. Being the first one to do something is not enough.

The part that interests a venture capitalist or angel investor most is the financial part, which should be consistent, realistic and credible. Proving revenue can be generated is of capital importance.

Angels investors and venture capitalist will not usually analyze the business plan in full and will hire specialists to analyze it but they will take a look on the executive summary. This is a part of your business plan and should actually be a summary of it, which highlights some key factors investors are interested in.

Think of the executive summary as a stand-alone document, which explains you business in short, overviews the market size and need and explains why your company will succeed. Each essential part of the business plan like the marketing plan, customer analysis, competition or the biographies of your management team should be summarized here. A lot of your energy should go into getting this right. Sometimes you will only send this document instead of the business plan and if this passes without any trouble, it will be time for your official meeting with the investor and the presentation of your business.

Stand by for the next newsletter you will receive tomorrow when we will discuss how you should prepare you presentation and presentation slides.