A potential investor will initially
only 5 minutes with your plan.
The following areas will be
evaluated, each area taking about 1 minute!
1. Determine the characteristics of (1) the industry and (2) this particular
What other publicly held similar companies are
Is there a larger company that is extremely
Is the company in a 'glamour field'? (important to
ensure a good public offering)
2. Determine the terms of the deal.
How much of the company is being sold for what
the form of debt or equity
How will the funds be used?
o To retire old debt (bad idea)?
o To undertake new activities that will, in turn,
3. Review the bottom line with special emphasis
on years three through five.
Earnings or potential earnings are reviewed to
Sensitivity analysis, or what if analysis to see
how the business model adjusts to changing prices, expenses and competition.
4. Determine the caliber of the people in the
(The most important aspect of the business plan!)
What is the track record of the founders and
How much balance and experience does the inner
How long have the members worked together?
Who are the banker and accountant, and what are
5. The marketing plan is reviewed with careful
consideration to current and future threats.
Is the product or service in demand now or will it
be in the near future?
What is the
Proposition for the product?
What other company or companies are already in this
space that could leap frog this business?
Can the customer be easily identified and marketed
Is Problem Solving
Selling: 3 Components
Investor's Questions To Be Answered by
the Business Plan
What is the
value of your product
versus what your product actually does?...
Business Plan DOs and DON'Ts
While a well prepared business plan is never a guarantee that your business will
be funded, it can increase the odds in your favor.
for venture capital? Ask a venture capitalist to
Review and Tune Up Your Business Plan!