Get Funded - Structuring Your Start Up Documents

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A guideline for how a strong business plan should be prepared for funding and the common errors that most entrepreneurs make.

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Get Funded - Structuring Your Start Up Documents

  1. 1. Get
Funded
 Structuring
Your
Start
Up
Documents

  2. 2. emagine
group
   Founded
in
2003
   Global
venture
development
firm
with
investments
in
15
countries
 across
multiple
industries
   Group
made
up
of:
   emagine
consulting
–
Consulting
and
Research
   iMedia
–
Graphic
Design
and
Web
Development
   tesla
communications
–
Technology
Planning
and
Management
   Wicked
Code
–
Software
Development
   4SquarePeg
–
Human
Resources
   We
are
venture
catalysts
   We
work
with
entrepreneurs
in
every
stage
of
business
 development
from
brainstorm
to
private
equity
investment

  3. 3. Our
History
In
Venture
Capital
   In
the
past
5
years
   We
have
heard
over
600
elevator
pitches
   We
have
received
over
400
executive
summaries
   We
have
read
and
assessed
100
business
plans
   We
have
invested
over
USD
400
million
in
industries
ranging
 from
technology
to
fashion
and
publications
   Our
current
investment
portfolio
stands
at
USD
700
million
   As
a
result,
we
have
a
special
understanding
of
entrepreneurship
 and
how
to
get
businesses
funded

  4. 4. Our
Funding
Process
 Brainstorm
 Internal
Business
Plan
 ~50
–
150
pages
 Teaser
 1
–
2
page
introduction
 Elevator
Pitch
 ~5
minute
quick
pitch
 Pitch
Deck
 ~15
–
20
slides
 Business
Plan
 20
–
30
page
plan
 Executive
Summary
 ~2
page
introduction
to
Business
Plan

  5. 5. Why
Do
Entrepreneurs
Need
Business
Plans
   Written
summary
of
a
proposed
business
venture
   Helps
us
understand
an
opportunity
and
how
to
best
exploit
it
   Gives
a
blueprint
for
the
operational
and
financial
viability
of
a
 business
venture
   Explains
marketing
opportunities,
go‐to‐market
strategy
and
post
 launch
promotional
plans
   Identifies
key
personnel’s
skill
sets
and
experience
   Increases
the
chances
of
business
success
or
elimination
of
a
 business
idea
based
on
feasibility
   Specifies
the
potential
risks
to
the
venture’s
success
   Provides
a
baseline
to
compare
projected
vs.
actual
results

  6. 6. Why
Do
Venture
Capitalists
Need
Business
Plans
   Helps
us
to
see
that
the
entrepreneur
has
thought
out
the
business
 idea
   Shows
us
that
the
entrepreneur
has
done
their
homework
on
how
 to
bring
the
concept
to
market
   Provides
us
with
the
financial
requirements
for
start‐up,
production
 and
operations
   Defines
the
return
on
investment
to
the
VC
   Sets
a
timeline
for
launch,
growth
and
expansion

  7. 7. 6
C’s
of
Business
Plans

   Complete
   Clear
   Credible
   Compelling
   Customer
Focused
   Concern
for
the
Investor

  8. 8. Do
You
Know
What
You’re
Getting
Into?

  9. 9. Benefits
and
Challenges

  10. 10. What
You
May
Not
Know

  11. 11. Elements
of
A
Business
Plan

  12. 12. Well
Structured
Business
Plan
   Executive
Summary
   Mission
Statement
   Business
Description
   Industry
Analysis
   Business
Strategy
   Customer
Analysis
   Product/Service
Offering
   Marketing
Strategy
   Promotional
Strategy
   Competitor
Analysis
   Team
Composition
   Operational
Plan
   Technology
Plan
   Research
&
Development
   Financial
Forecasts
   Investment
Strategy
   Supporting
Appendices

  13. 13. Executive
Summary
   “The
Elevator
Pitch”
that
summarizes
the
business
plan
into
2
 pages
   This
should
be
written
last
to
assure
that
all
key
elements
are
 explained
first
in
the
business
plan
and
then
related
into
a
strong
 Executive
Summary
   If
the
Executive
Summary
isn’t
strong,
the
business
plan
will
never
 be
read

  14. 14. Mission
Statement
   Entrepreneur’s
Vision
   What
is
the
business?
   What
will
it
become?
   What
will
it
stand
for?

  15. 15. Business
Description
   Introduce
your
business
and
explain
it
   Legal
Structure
   Locations
   Market
Need
(Pain)
‐>
Solution
   Business
Goals
and
Objectives
   Overview
of
Unique
Advantages
   What
Benefit
Will
It
Provide
The
Customer
   Professional
Services
   Attorney
   Accountant
   Consultants
   Insurance

  16. 16. Industry
Analysis
   Current
industry
position
and
trends
   Potential
trends
that
can
be
leveraged
for
business
success
   Total
size
of
the
market
‐>
How
much
can
you
serve?
   What
need
do
your
products/services
solve?
   Entry
barriers
   SWOT
analysis

  17. 17. Marketing
and
Strategy
Principles

  18. 18. Business
Strategy
   How
will
you
gain
competitive
advantage?
   What
makes
you
unique?
   How
will
you
meet
your
goals
and
objectives?
   What
is
the
company
brand?
   What
will
it
cost
to
enter
the
market,
establish
position
and
 maintain
it?

  19. 19. Customer
Analysis
   Who
is
the
target
customer?
   What
is
the
profile
of
the
customer?
   Demographic
and
psychographic
breakdown
   Customer
Need
Analysis
   Buying
criteria
   Value
proposition

  20. 20. Product/Service
Offering
   Tell
us
about
your
product/service
   Key
Features
   Unique
Advantages
   What
does
it
do/What
need
does
it
satisfy?
   How
will
people
use
it?
   Where
does
development
stand
currently?
   Are
there
any
patents,
trademarks
or
copyrights
that
will
affect
 product
development?
   How
will
technological
changes
affect
product
development?
   What
are
the
shortcomings
and
how
do
you
plan
to
overcome
 them?


  21. 21. Marketing
Strategy
   Prove
that
a
profitable
market
exists
   Demonstrate
customer
interest
   How
will
you
build
awareness?
   How
will
you
position
your
product/service
and
brand?
   What
is
your
pricing
strategy?
   What
is
the
Go‐To‐Market
strategy?
   What
is
the
sales
and
distribution
strategy?
   Is
there
a
service
plan
and,
if
so,
how
will
it
be
implemented/ followed?

  22. 22. Promotional
Strategy
   Advertising
   Public
Relations
   Personal
Sales
   Websites
and
Social
Media
   Direct
Marketing
   Telemarketing
   Articles
and
Publications
   Budget?

  23. 23. Competitive
Analysis
   Information
on
competitors’
market
share,
products
and
strategies
   What
are
your
advantages
over
the
competition?
   How
else
can
your
solution
be
achieved?
   Competitor
response
   What
will
it
take
for
customers
to
switch
to
your
offering?
   How
will
competitors
respond
to
your
market
entry?

  24. 24. Team
Composition
   Breakdown
of
key
personnel
   Education
   Skill
Sets
   Professional
Experience
   Direct
relevant
industry
experience
   Accomplishments
and
track
record
(P&L
responsibility)
   Experience
of
the
team
working
together
   Status
and
Nature
of
Commitment
   Additional
roles
to
be
filled
   Talent
Acquisition
Strategy
   Board
of
Advisors
   Board
of
Directors

  25. 25. Operations
Plan
   Detail
the
daily
operations
   Structure,
Ownership
and
Legal
Form
   Organization
Chart
with
responsibilities
   Leases
and
agreements
necessary
to
operations?
   How
will
the
offering
be
produced?
   Required
resources
   Capital
expenditures
   In‐house
and/our
Outsourced
production
   Post
Startup
Production
Expansion
Costs
   Supplier
Agreements
   Required
Licenses
and
Permits

  26. 26. Technology
Plan
   How
will
your
venture
use/utilize
technology?
   Cut
costs?
   Increase
revenues?
   Streamline
production/product
delivery?
   Obtain
more
clients/customers?
   Business
Information
Systems?
   How
will
it
help
to
achieve
business
goals
and
objectives?
   What
will
be
the
costs
to
implement,
maintain
and
upgrade?
   What
are
the
training
costs?

  27. 27. Research
&
Development
Plan
   Does
your
offering
require
on‐going
research
and
development?
   How
will
it
be
funded
and
carried
out?
   What
indicators
will
be
used
to
determine
where
the
research
and
 development
should
be
directed?
   How
will
it
be
implemented
into
product/service
development
and
 management?
   How
will
the
research
ownership
be
controlled?

  28. 28. Financial
Forecasts
   Capital
Expenditures
   Sales
Forecast
   Will
you
sell
on
credit?
   What
will
your
policy
be?
   What
will
it
cost
you?
   Breakeven
Analysis
   3
Sets
of
Forecasts
   Optimistic
   Most
Likely
   Pessimistic
   Monthly
Proforma
for
Year
1
   Quarterly
for
Years
2
–
5

  29. 29. Investment
Strategy
   Amount
of
required
capital
   Personal
investment
   Use
of
funds
   Return
on
Investment
   Exit
strategy

  30. 30. Appendices
   Resumes
   Owners
   Shareholders
   Key
Personnel
   Financials
   Start
Up
Expenditures
   Income
Statement
(1
year)
   Cash
Flow
Statement
(12
 months)
   Balance
Sheet
(1
year)
   Personal
Financial
 Statements
   Competitor
Weaknesses
   Risk
Assessment
   Required
Business
Equipment
 with
Quotations
   Market
Research
Studies
   Industry
Studies
   Research
&
Development
   Key
Agreements
   Technology
White
Papers
   Advertising
Materials
(if
 available)

  31. 31. How
Do
We
Decide
Who
To
Fund?

  32. 32. Three
Tests
   Reality
Test
   Does
the
market
really
exist
for
the
offering?
   Can
you
build
it
within
the
costs
defined
in
the
plan?
   Competitor
Test
   Company
position
relative
to
key
competitors
   Management’s
ability
to
create
a
company
that
can
give
a
 competitive
advantage
over
rivals
   Value
Test
   Will
it
make
money?
   Will
it
cover
operating
expenses?
   Does
it
give
investors
an
attractive
rate
of
return
or
a
high
 probability
of
repayment?

  33. 33. Things
That
Keep
Us
From
Funding
   Lack
of
logic
in
the
development
 of
financials
   Unrealistic
financials
or
lack
of
 detail
   Lack
of
planning
for
variables
for
 business
   Underestimating
upfront
 marketing
&
advertising
costs
   Location!
Location!
Location!
   No
research
on
upfront
costs,
 purchases
and
expenses
   No
allowances
for
A/R
and
A/P
   Forgetting
to
include
a
reasonable
 salary
   Pie
In
The
Sky
Projections
   No
quotes
for
required
products,
 services
and
equipment
   Failing
to
relate
to
a
real
need/ requirement
   Trying
to
be
all
things
to
all
people
   No
Go‐To‐Market
strategy
   “We
have
no
competition”
   Business
plan
too
long
or
too
 technical
   No
risk
analysis
   Poorly
organized
business
plan
   Badly
designed
or
un‐proofread
 business
plan


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