By Harshdeep Rapal
A venture capitalist will, on average, receive hundreds, if not thousands, of business plans every year, but just a handful make it to a detailed review and even fewer get funding.
Investment decisions vary from one venture capitalist to another. To a large extent, they depend on the portfolio the venture capitalist is building. Still, there are a few things that every venture capitalist would like to see in a business plan.
Based on my interaction with investors and entrepreneurs, I have compiled a list of points that can increase the chances of getting support for a business plan:
Idea, its Viability and Sustainability: The most important ingredient of a business plan is the idea. The combination of a unique idea and an identified and expanding market is something that interests every investor. The entrepreneur should be able to prove how to make the idea viable and sustainable, and include an execution plan and timelines for achieving major milestones. A venture capitalist would be much more comfortable funding a venture if it is clear how the money will be spent.
Progress till date: A venture capitalist is always more interested in projects where some groundwork has already been done. If you have a running prototype of the business, share the data on investment, customers, revenues, products, services and challenges faced. This would give a fair idea about the returns the venture capitalist can expect from an investment. Generally, businesses that are up and running, or even pilot projects, have a greater chance of attracting funding than plans that have yet to take off.
The Team and Business: A venture capitalist would like to see and meet the people who will actually handle an investment. To some venture capitalists, the people are more important than the plan itself because market conditions might change, meaning the [...]
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