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Venture
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Usually a written business plan is required
before the investment process is started.
A well-prepared candidly communicated business plan will include the following
information:
- Description of the business and a company
history.
- Business strategy and product/market opportunity.
- Historic financial statement and forecasted
cash flows.
- Profiles of key management personnel.
- Management report card-discuss strengths
and weaknesses.
All information provided
will be treated confidentially.
Your
business plan is a living document with two primary purposes: to provide
a strategic plan for your company and to raise capital throughout its
growth stages. As a strategic document, the business plan should evolve
as your company develops and achieves critical milestones. As a capital-raising
document, the business plan should comprehensively and concisely communicate
your investment opportunity to potential capital providers.
If the business plan is of interest, the
investor will conduct thorough due diligence on the company. During
this time the investor will familiarize itself with the company and seek
to build a partnership with management based on personal rapport,
frank communication, and shared objectives.
It is
very important to show respect and interest when the investor requests
vital information regarding your company. By putting yourself in
the eyes of the investor, you understand the importance of effective due
diligence.
Investor final decision to consummate
a transaction is based upon an analysis of management qualifications,
market size and strategy, product viability, the business entity, and
financial projections.
Recommended further reading:
About
Venture Capital Investor
Guide To Writing A Business Plan
Venture Vs. Debt Financing
Learn About Capital Sources
Frequently Asked Questions
Business
Plan information and resources
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