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Bill McCready
Show Me the Money ... Secrets of Business Finance
Money is looking for a good investment
Did you know there is more money looking for "a good investment"
than there are "good deals" looking for money?!
If this is true, why is it so difficult to get financing? How do
you build a bridge between your project and the financing you
need? Simple:
Write a killer BUSINESS PLAN.
Many entrepreneurs would receive more serious consideration from
investors and financial angels if they would realize that they
are selling a financial package to the financial marketplace,
rather than their product or service to a consumer. Your
business plan is your financial package.
What Every Investor Wants to Know
The goal of every business plan should be to address upside
potential, downside risk, management, potential dilution, and
liquidity issues. Investors are constantly comparing one
investment against another and ranking them in numerous
categories.
At a recent Venture Capital Conference attended by 23 venture
capital companies, 150 business plans were reviewed. Of these,
only 25 asked for specific funding, and only 12 had specific
uses of funds, and only 5 had exit strategies for investors!
To evaluate your own project, put yourself in the place of the
investor, who wants to know the answers to these seven questions:
1. How Much Can I Make? (ROI expected.)
2. How Much Can I Lose? (Loan guarantees or other contingent
liabilities.)
3. Who Says This Thing Will Work? (Third party verification of
assumptions and markets.)
4. Who Else Is In The Deal? (The management/investment team
and their qualifications.)
5. How Big is the Market? (Is it growing? Is it hot?)
5. How Will the Company Reach Its Clients? (Verification of
marketability.)
6. How Do I Get My Money Out and When? (Exit strategy for IPO,
Acquisition or Merger.)
Business Plan Do's and Don'ts
1. DO keep the business plan as short as possible without
compromising the description of your venture and its potential.
2. DON'T over-diversify your venture. Focus your attention on
1 or 2 key products or services.
3. DO include thorough resumes and job functions of your
management team.
4. DON'T use technical jargon.
5. DON'T estimate your sales on the basis of what you can or
would like to produce.
6. DON'T make ambiguous, vague or unsubstantiated statements.
Be precise about market size, rates, etc.
7. DO involve your management team in the preparation of the
business plan.
8. DO disclose any current or potential problems with your
venture.
Have Your Business Plan Reviewed by Professionals
The old saying "you can't see the forest for the trees" holds a
lot of water when it comes to entrepreneurs and their business
plans. You are just too close to the situation to be objective.
You can also overlook very obvious missing pieces, missed market
opportunities and under estimate the competition.
Before you put your Business Plan on the street and start a road
show with funding sources, it is an excellent idea to get at
least three outside opinions from sources completely independent
of your business. These reviews should cover, the market and
market strategy, the financial aspects of the proposal, and the
management and operational aspects.
Venture Planning Associates offers two levels of Business Plan
Reviews to assist you with this process. Prior to starting the
process, you may want to review our Venture Planning Checklist.
To get a copy, sign-up for our expert zine
http://www.ventureplan.com on our home page.
Comprehensive Business Plan Review
http://www.ventureplan.com/ssvpa.htm
A preliminary review includes looking for missing information,
financials assumptions and accuracy, marketing studies,
financial request amounts, source and application of funds and
other basic financial information. A style and marketability
review of your plan, and ideas on how give your presentation and
plan sizzle will be included.
This includes review by Venture Capitalist, written
recommendations, and two hours of phone consultation and we
guarantee turnaround in 3 business days. Contact us today!
capital@ventureplan.com?subject=Re:%20In-Depth
In-Depth Business Plan Review
An in-depth review that includes some due diligence, but
primarily looks at technical feasibility, competition, market
potential, management structure, investment payback, proprietary
issues and distribution or sales.
A Due Diligence Check List will be included with this review,
however a Due Diligence Review that involves reference checking,
legal review of all the documents, contracts, rights assignments
and tax implications of the investment is not included and
should be prepared by your CPA, Tax and Legal Advisors in
preparation for funding.
A valuation calculation and sample term sheet for your
particular deal will complete the package.
Fees for the In Depth Business Plan Review will be quoted upon
receipt of your Business Plan and supporting documents.
Estimates will be given based on the complexity and depth of
review required. Get a quote! capital@ventureplan.com
Venture Planning Associates, Inc., http://www.ventureplan.com
Tel. 858.457.3434 / efax 425-955-7531
capital@ventureplan.com
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