|July 27, 2011||Why a Business Plan is important for Entrepreneurs and Investors.||no comments|
|July 27, 2011||Entrepreneurs Must Keep Their Info Fresh For Investors||no comments|
|May 30, 2011||Do Entrepeneurs and Startup Innovation Have a Chance?||no comments|
|May 30, 2011||Startups Risking Securities Violations||no comments|
Why a Business Plan is important for Entrepreneurs and Investors. A business plan may not get you the “sale” (investment), but it just may close it. A good business plan may be all the credibility your Deal has.
• You are stating a hypothesis about how an investor is going to make money by investing in your Deal. • It demonstrates discipline.
• It shows how you think, your reasoning process.
• It gives credibility points that the investor can verify.
• In many ways it will drive the terms of the investment, especially milestones, valuation and perhaps vesting schedules. (no self respecting VC will agree with this, but the truth is they verify what you give them)
• You have to worry about what an investor “knows that aint so”. A good plan can address myths, and misconceptions head on with FACTS, not opinion.
• Most importantly, the plan is your “contract” with the investor, it says what you’re going to do with his/her money and what to expect. Often times with no track record the plan is the only roadmap. If you do something outside of the plan, you’ll be held to task.
To help you, download our Expanded Executive Summary and Executive Summary guidelines from VentureCapital.Org and update your plan and .ppt. Old news is just that, old news. Investors invest in the future not the past.
My plan and investor pitch is two generations old will you please forward it to your Angels, venture capitalists and other investors?
The answer is a resounding NO!. Why? Many entrepreneurs fail to update their business plan or power point deck. The rational is that they are too busy running the business, and besides “What I say is more important than what I leave behind.” Famous last words.
Never circulate old business models (or plans) and hope to talk your way out of them.
It NEVER works. You'll get feedback that may or may not apply and no one wants to
spend the time to go through that exercise especially you! As for the investor they will
never want to see you again, at least with that Deal. There is a movement to use .ppts as submission documents, some say business plans are a waste of time. However, if the deck is properly annotated, it's not good for presentation (too dense with words), but could be put into good handout, but it doesn’t replace a business plan.
To help you, download our Expanded Executive Summary and Executive Summary
guidelines from VentureCapital.Org and update your plan and .ppt. Old news is just that, old news. Investors invest in the future not the past.
Are we really trying to create jobs in America? Do entrepeneurs and innovation have a chance?
That's a question I keep asking myself. Recently, the Kauffman Foundation published a study on small business lending, the results are disturbing. (The numbers may not be exact, I'm going from memory, but they are indicative.) Sixty-seven percent (67%) of all small business loan applications were approved in 2009 with only 17% declined. In 2010 that number went to 60% approved and 23% declined. (The reason they don't add up to 100% is the difference are businesses that didn't apply because they didn't think they'd qualify.)
Now the number of angels have been reduced thanks to a redefinition of Accredited Investor, a definition that could change again at the whim of the SEC, not Congress. IPO's in the U.S. are almost non-existent, and has Sarbanes Oxley worked? Yes, it has killed the IPO market and has exacerbated shenanigans by unscrupulous CEOs. Crack downs by the FDA, constant bickering over funding the SBIR program (one of the few govt. programs I endorse), attempts to eliminate the Manufacturers Extension Partnership (another program I like), and of course the dismantlement of NASA are all causes of concern. The rest of the free world expects us to be the innovators so why are we trying to abrogate that leadership position?JM4MZ5883A68
I was at the Utah Securities Division Commission meeting the other day promoting entrepreneurial initiatives of the Institute and giving them a status report on WBI activities, and the status of the local angel and venture communities.. The Division regulates companies raising capital. Private equity firms, venture funds, angel groups, and especially licensed broker/dealers are under their purview. Entrepreneurs with their start-ups can easily run afoul of the Division by not using competent legal counsel or employing the assistance of an unlicensed finder. While WBI Alumni companies have done remarkably well over the last three years considering the economy, there are concerns. Many start-ups aren't raising capital, this makes them targets for unscrupulous or simply well meaning but naive "finders".
The Division has many reasons to be concerned, many of our local venture funds.are under stress, just like their Silicon Valley counterparts. Local angels and angel groups have been hurt by the change in what constitutes an Accredited Investor. It is estimated that up to 30% of angels don't qualify anymore. The recent Medical Device tax credit, may help, but one things for sure, bad deals as well as good will get the credit. Also, Angels who don't know how to invest in tech companies will be drawn to the credit rather than the good deal. I employ entrepreneurs to be the best you can be, and seek and attract the best, most helpful money you can. Start-ups, let the Division chase the big boys, by being will crafted deals with knowledgeable investors.