Zsuzsanna Fluck Broad MBA Business Plan Competition Preparatory Workshop 2012 1 What makes a business plan successful to raise venture capital funding?

Zsuzsanna FluckZsuzsanna FluckBroad MBA Business Plan Competition Preparatory Workshop 2012Broad MBA Business Plan Competition Preparatory Workshop 2012

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What makes a What makes a business plan business plan successful to raise successful to raise venture capital venture capital funding?funding?

Zsuzsanna FluckZsuzsanna FluckBroad MBA Business Plan Competition Preparatory Workshop 2012Broad MBA Business Plan Competition Preparatory Workshop 2012 22

What makes a business What makes a business venture successful?venture successful?

the peoplethe people the opportunitythe opportunity the market the market the deal the deal

The degree to which they fit together.The degree to which they fit together.


The peopleThe people

Who are the founders? Who are the founders? What have they accomplished? What have they accomplished? What is their reputation? What is their reputation? Do they have relevant experience?Do they have relevant experience? Can they adapt to changes? Can they adapt to changes? How will they respond to adversity?How will they respond to adversity? How committed are they to this venture?How committed are they to this venture?


The opportunity: The opportunity: The bottom lineThe bottom line

What is the idea? What is the idea? Why is it better than other solutions on the market? Why is it better than other solutions on the market? How do you generate revenues?How do you generate revenues? What are the costs involved?What are the costs involved? When do you have to buy resources? When do you have to buy resources? When do you have to pay for them? When do you have to pay for them? How long does it take to acquire a customer? How long does it take to acquire a customer? How much capital equipment is required to support a How much capital equipment is required to support a

dollar of sales?dollar of sales? What is the probability distribution of payoffs? What is the probability distribution of payoffs?


The Market: Who Are the The Market: Who Are the Customers?Customers?

Who is the customer? Who is the customer? How does the customer make decisions?How does the customer make decisions? To what degree is the product or service To what degree is the product or service

a compelling purchase for the customer? a compelling purchase for the customer? How will the product be priced? How will the product be priced? How much does it cost to acquire a How much does it cost to acquire a

customer?customer? How much does it cost to retain him?How much does it cost to retain him?


Who are the competitors?Who are the competitors?

The value of the growth opportunities The value of the growth opportunities depends on the competitorsdepends on the competitors

Who are the competitors?Who are the competitors? What resources do they control? What resources do they control? What are their strengths & weaknesses?What are their strengths & weaknesses? How will they respond to entry?How will they respond to entry? Who else might be able to exploit the Who else might be able to exploit the

same opportunity? same opportunity?


The dealThe deal

What is the pre-money valuation?What is the pre-money valuation? How much investment are you seeking?How much investment are you seeking? What stake of the business are you What stake of the business are you

selling? selling? What is the financing history and who are What is the financing history and who are

the current owners, claimholders? the current owners, claimholders?


The concept of The concept of integrationintegration To what degree do the people have the To what degree do the people have the

right experience, skills and attitudes right experience, skills and attitudes given the nature of the opportunity? given the nature of the opportunity?

To what degree does the opportunity To what degree does the opportunity makes sense, given the people involved, makes sense, given the people involved, the opportunity and the deal struck?the opportunity and the deal struck?

To what degree is the concept favorable To what degree is the concept favorable given the people, the context, etc.? given the people, the context, etc.?

Why should the VC invest in the deal?Why should the VC invest in the deal?


How does the VC How does the VC evaluate a business plan?evaluate a business plan? What can go wrong?What can go wrong? What can go right? What can go right? What decisions can management make What decisions can management make

today to ensure that what can go right does today to ensure that what can go right does go right and what can go wrong is avoided? go right and what can go wrong is avoided?

How can the reward to risk ratio tilted in How can the reward to risk ratio tilted in favor of the venture?favor of the venture?

Why should the VC invest in this company?Why should the VC invest in this company?


What are VCs Looking What are VCs Looking for?for?

Business Plan in line with the VC’s focusBusiness Plan in line with the VC’s focus Discontinuity in technology/ High IRRDiscontinuity in technology/ High IRR Team that have the ability and vision to Team that have the ability and vision to

execute and that they can work withexecute and that they can work with Promising business modelPromising business model Advantage to competitionAdvantage to competition Protection for intellectual propertyProtection for intellectual property Potential for exit with attractive multiples in the Potential for exit with attractive multiples in the

timeframe of the fundtimeframe of the fund


Business Plan/PresentationBusiness Plan/Presentation 10 pages10 pages Summary of concept (1 paragraph)Summary of concept (1 paragraph) TeamTeam Idea, Product Line, Company, Intellectual PropertyIdea, Product Line, Company, Intellectual Property Market, Costumers, Competitors, PriceMarket, Costumers, Competitors, Price Business model: How are you going to make money?Business model: How are you going to make money? Timing of Cash Flows, Cash Flows, Profits, Assets, IRRTiming of Cash Flows, Cash Flows, Profits, Assets, IRR Valuation, Existing Investors, Existing ContractsValuation, Existing Investors, Existing Contracts How much funds are you looking for? How much funds are you looking for? What fraction of the company are you selling?What fraction of the company are you selling? Why should the VC invest in the company?Why should the VC invest in the company?


Business Plan/PresentationBusiness Plan/Presentation CLEARLY and QUICKLY articulate what product does for customers CLEARLY and QUICKLY articulate what product does for customers

and how revenue is generated.and how revenue is generated. Use balance sheet and income statement as the table of contents Use balance sheet and income statement as the table of contents

(revenue, gross margin, operating expenses, earnings timing)(revenue, gross margin, operating expenses, earnings timing) Be critical in advanceBe critical in advance Provide what each reader target will need…Provide what each reader target will need…

Clear review of product, market, competing alternatives, differentiation, Clear review of product, market, competing alternatives, differentiation, execution plan and exitexecution plan and exit

Evidence of every statement you’re making or credible supportEvidence of every statement you’re making or credible support Overview financials with very detailed assumptions and sensitivityOverview financials with very detailed assumptions and sensitivity

In presentation show passion, confidence and flexibilityIn presentation show passion, confidence and flexibility Prepare elevator pitch and 10-minute presentation. Prepare elevator pitch and 10-minute presentation. Be ready to give crisp answers to questionsBe ready to give crisp answers to questions