Five guaranteed ways NOT to get your business plan funded


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Five guaranteed ways NOT to get your business plan funded, for Slow Money's Business Plan 101, October 10, 2012

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Five guaranteed ways NOT to get your business plan funded

  1. 1. David Karp, Sprout LendersGreater Boston Slow Money Business 101 October 10, 2012
  2. 2.  The mission of Sprout Lenders is to support a vibrant and healthy local food system by making small loans to farmers, producers, and food system entrepreneurs that serve the greater Boston area. Foodies, finance majors, sustainability geeks, etc. looking for decent ROI and better food Next loan application deadline: November 15 ◦ ◦ ◦ @sproutlenders
  3. 3.  Left and right-brained marketer Director of Marketing, Currensee Treasurer, Photographic Resource Center at BU Founding Member, Sprout Lenders Business coach, Neighborhood Business Builders MBA, MIT Sloan Favorite sandwich: grilled cheese (extra sharp local cheddar) ◦ ◦ @limeduck
  4. 4. Here are five things NOT to do
  5. 5.  Some investors read the financials first, and the rest not at all if they don’t add up Cashflow is more important than your mother Show a clear path to profitability and payback that supports your narrative
  6. 6.  Risk is part of business and of life Showing awareness of the risks of your business and explaining how you’ll mitigate them builds your credibility There are always known risks and unknown risks, a good plan leaves room for both
  7. 7.  Some funders look at the team first, and throw the plan away if they don’t impress Even if you’re the only employee of your business, you’re probably not the the only member of your team Build a team with good credentials and good contacts – it’s your support system and it builds confidence with investors
  8. 8.  Can you sell 500 pounds of sausage a week? How do you know? What makes you think so? Nobody knows the future for sure, but you must build a convincing case for the numbers in your plan Use comparables, competitors, primary data, anything you can get, and document it
  9. 9.  They read it first, so you write it last, after you’ve done all the rest of the hard work This is your first and sometimes only chance to capture the interest of a funder Present key data Don’t contradict the summary later in the plan Provide a compelling case for why you will succeed, but don’t sound like you’re selling
  10. 10.  Obfuscate the financials Ignore the risks Go it alone Don’t support your assumptions Phone in the executive summary
  11. 11.  If your investors don’t get what you’re about, nobody’s going to be happy Sustainability and social good are not excuses for sloppy math or non-functional businesses Want to run a non-profit organization? It’s harder, and the paperwork is much worse You owe it to your community and to make your business work (oh yeah, and your investors, too) – your business plan is your promise to both
  12. 12.  If this presentation taught you something or helped you out… ◦ Share it with others who might like it ◦ Modify it and share it some more ◦ Come back here next time and give it – better yet give a better one – and share that one, too ◦ I’ll post it here: Sprout Lenders David Karp