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You need to secure money for
your project. You visit venture capitalists to
see if you can get that money. A venture
capitalist views your project as a pure
investment. A venture capitalist has no
emotional attachment unlike you. You need to
write a proposal that is structured around a
venture capitalists needs, not yours. What may
interest you may have no relevance to your
potential funder. You need a business plan that
is ‘investor-focused’.
An investor focused business
plan contains relevant information about your
project. It addresses concerns, questions and
should allay fears that any potential venture
capitalist may have. It should meet their needs
exactly. Venture capitalists exist to make
substantial gains. They want to see a good
return on investment. By compiling an investor
focused business plan, it will be clear to
Venture Capitalists that you are focused,
prepared and competent.
There are four areas that
need to be addressed:
»
Management Responsibility
»
Know Your Markets
»
Know Your Product
»
Know How Management,
Markets and Product Make Money
Management Responsibility
The strength of management
assigned to the project can make or break your
proposal. Venture Capitalists need reassurance
that you can manage their money. They will want
to see a demonstrable track record in areas
specific to the project you are pitching. The
ability of management will be tested so be very
prepared.
Know Your Markets
Venture Capitalists will
need to see where your income will be coming
from. Your company must demonstrate a strong
understanding of your customer base and be able
to fulfil their needs. Your plan also must
address any potential new or growth markets.
Illustrate any research you have conducted to
emphasise this.
Know Your Product
Venture Capitalists will
want to fully understand your product. They will
want you to demonstrate how the product that
they are funding will attract customers. The
information in this section must be extensive
and also feature any potential expansions or
upgrades that your product will feature. This
will show that you have thought about long-term
growth.
Know How Management, Markets and Product
Make Money
It must be demonstrated that
management can create links and paths between
customers and product. This element must be very
strong as ambiguous information, or an assumed
relationship will scare off any potential funder.
Create a step-by-step guide of how their money
will be processed and how the customers money
will be received. This has to be clearly shown.
Tie in these points together
and you are already in the top 3% of all venture
capital submissions.
Good Luck!
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