1. SENTE CAPITAL MANAGEMENT BUSINESS PLAN
What Investors Want to See in a Business Plan
There are more clichés and misunderstandings surrounding business plans than any other part of the
capital raising process. Contrary to popular belief, no investor hears a presentation or reads a plan and
then writes a check on the spot. The business plan is a lever. If the plan is favorably received, the investor
will proceed to the next step in the funding process: Due diligence.
What do investors want to see in a plan? They basically want answers to the following seven questions:
1. What is unique about this venture? The investor is not necessarily looking for a unique product,
but one with growth potential that sets it apart from other industry competitors or from other
plans received. Think about the transitive value1 your venture offers to potential customers. Also
think about uniqueness in the context of “blue ocean strategy”.
2. What does the company do? The reader wants to be able to understand the company's product
and services and the operations of the company. Refine your elevator pitch into a clear, concise
statement explaining your business model. Avoid jargon and buzzwords. This does not impress
an investor.
3. How will the company attain profitability? This area entails discussion of the market and
competition, as well as an analysis of areas such as revenue and profit margins. Make sure you
have a well-defined revenue model, and a table of assumptions that form the foundation of the
revenue model.
4. What benefit will be derived from a capital infusion? How will the proceeds of the financing be
utilized and what results benefiting the investor will be achieved? This should translate into
increased revenues and profits and an excellent return on investment. Use sensitivity analysis to
provide a range of likely outcomes.
5. Do the financial projections make sense? Over-optimistic projections reflect on management's
judgment. Projections can be aggressive, but must be within the realm of the real business world.
Have all the necessary information to support the basis of your financial projections readily
available. Again, develop a table of assumptions used in preparing financial projects.
6. Is management capable of implementing the business plan? Many investors consider this the
most important element of a business plan. An investor must be comfortable with the experience,
knowledge, and abilities of the management team. Many times, an outstanding management
team can overcome other plan deficiencies. Always remember, professional investors be the
jockey, not the horse.
1 The "Transformative value" of an invention or innovation is the degree to which it transforms the lifestyle of a consumer. See
David Croslin, “Innovate the Future”, 2010.
Copyright 2001-2011 - Hal Spice Page -1- 15-Jun-2011
SCM - What Investors Want To See In A Business Plan V2.5

2. SENTE CAPITAL MANAGEMENT BUSINESS PLAN
7. Is there an exit strategy for the investor? Does this business have the potential to merge, be
acquired, go public or buy out the investor? This is important, since the most popular venture
capital vehicle is the convertible debenture. The investor must be confident that either the debt
payments can be sustained or that their stock conversion rights have homerun potential.
You must be able to support the likelihood of the exit strategy you select. For example, if your
exit strategy is acquisition, identify at least three potential acquirers and explain why your
company would be a desirable acquisition opportunity.
The key to developing a fundable business plan, and to securing investment funding in today’s economic
environment, is to always remember to think like and investor and view the world from the investor’s
perspective. Every professional investor has constructed an investment framework that they employ
assessing opportunities. Understanding the framework used by a particular investor will greatly improve
your probability of securing funding.
Next Steps
If you contact me please succinctly state how you feel I can help and I will review your request.
Specifically state your needs to be addressed and important parameters such as time frames.
For Additional Information Contact
Hal Spice
Founder and Managing Partner 888.898.9381 – US HQ Toll Free
Sente Capital Management LLC 650.867.1382 – US Cell Phone
1840 Gateway Drive – Suite 200 hal.spice - Skype ID
San Mateo, California 94404 USA hal@sente-capital.com
www.sente-capital.com
Copyright 2001-2011 - Hal Spice Page -2- 15-Jun-2011
SCM - What Investors Want To See In A Business Plan V2.5