Business plan · Investors

What do investors look for in a business plan?

Nicolas Cabrera Happy Human and Deveoper

March 3rd, 2016

What are most have in a business plan presented to investors and what are they really looking for during the fist 15 seconds window?

The way I image investors is a very busy people that received many emails a day from people looking for some of their attention. I supposed on the first contact (an email) you want to send a business plan (am I wrong?) to capture their attention. What would you recommend?

Dimitry Rotstein Founder at Miranor

March 3rd, 2016

15 seconds is a bit steep, even for an elevator pitch, but if that's all you have, then I'd recommend describing the problem you are solving, and the total addressable market size.
The problem should be described as a short story made of simple words, rather than a technical description with fancy words. As a random example, let's take... oh I don't know... Dropbox. "We are building a software framework that can perform file backup and synchronization across devices and platforms faster and easier than ever before..." - that's it, you just lost your audience. "Have you ever needed to copy a bunch of files from your computer to your phone? A nuisance, isn't it? And what if you need these files urgently when you're away from your computer? Bummer. Now imagine that it's all done automatically - you just take out your phone, and all your files are already there, as if by magic. That's what we do (and that's just for starters)".
The TAM size should be well over $1B if you want to get attention from an investor, otherwise it;s not worth mentioning (and probably not worth your time looking for investment in the first place).
If you still have a few seconds left (or if you see that the other person is interested), you can add your strongest card to the mix. That could be a good traction, revenue growth, an exceptional team, an endorsement from someone highly credible, strategic partnership, etc.

Victoria Cabrera Marketing Coordinator at Patxi's Pizza

March 3rd, 2016

I'd recommend you do a search on FounderDating for this topic or similar there is such a wealth of awesome information and topics you should follow, this discussion has happened before
http://members.founderdating.com/discuss/topic/Investors
http://members.founderdating.com/discuss/topic/Fundraising

Tallat Mahmood Founder at Funding Your Tech Startup

April 11th, 2016

Hey Nicolas

Great question. The key things funders want to see in a business plan are that you are solving a real problem, and that you have traction. 

If you can demonstrate these two things then you are on the path to securing funding. Beyond this there will be sections on milestones and metrics and the team etc. but it all depends on the first two criteria. 

Explaining the problem you are solving ought to be easy enough. However, when it comes to demonstrating traction, this is where people usually get stuck. The key thing is traction is not only determined by how much revenue you are generating. It can also be the number of website hits you have, or the completion of your product, or indeed, the launch of a new product. 

The first 15 second window is a really tight window! However, in an elevator pitch you ought to be trying to get across the same two points as mentioned above; i.e. explain the problem you are solving, and explain the traction your business has achieved. That will get the attention of the investors. 

Let me know if you have anymore questions. 

Tallat

Cameron Ackbury President US Operations | Investor | Seeking top tier University entry level Sales, Marketing, PR Candidates

April 11th, 2016

Hi Nicolas - yes, there is a pretty unique methodology to an investor deck.  Ever try writing a one pager and use it as a teaser?  If they come back wanting more an investor deck works - should have the central components of problem solved, size of problem, what makes it unique, different, defensible, the technology, the business model, revenue model etc...

Joseph Wang Chief Science Officer at Bitquant Research Laboratories

April 18th, 2016

Most investors don't want to look at a business plan.  You start with a one pager, then send an investment deck of 12 slides.  For the type of angel investment that I do (USD 10k-30k investments), a business plan is a waste of the startups time and my time.

As far as what investors will look in a one pager, these are pretty effective, because you'll find that most investment pitches have an immediate deal breaker.  For example, I'm looking for USD 10k-30k investment, fixed income return within 1-3 years, with some connection with Southern China/Hong Kong.  If the investment doesn't fit these parameters, then I don't want to invest.

Once you get past size of investment, then next question is "is this already a profitable business or is it just an idea?"  If it gets past that hurdle then I usually will want to talk to the company.