“Markets come and go. Good businesses don’t.”
Fred Wilson, Co-Founder, Union Square Ventures
Any business at different stages of a lifecycle faces changes on the market either caused by external environment or internal processes. Such changes are especially frequent in a startup and when they happen it is best to look back at the strategy and check how it fits with the current reality. Company strategy defines its potential efficiency and investment needs for a given period.
One of the key tools that helps deal with changes effectively and implement strategy is a business plan. A good business plan is like GPS for your business. An effective business plan serves as a tool to ensure that the financial decisions and the budget are in synch with the goals. In terms of VC a good business plan shows the milestones and how the investment will be spent to fulfill the KPI set for each milestone. Usually it is developed for a period of 3-5 years.
One factor that drives investability of a startup in the eyes of a VC is ROI which is in part determined by the target market size and volume, that is measured at least in hundreds of millions of dollars.
Entrepreneurs must know everything about their target market: market size –number of potential customers, how to reach these customers, what they are willing and not willing to pay for, the major players and competitors on this market. Even when you think there is no competition, it IS there or will be very soon.
It is also important to know the stage of your startup, risks associated with this particular stage, main goals and investment required to achieve these goals. Before starting on VC hunt you must know exactly that your product solves a real existing and painful problem, its competitive edge, whether your team is experienced and competent enough to overcome challenges and solve unexpected problems and build a successful business.
All of those factors collected together and processed in a business plan will serve to swing VC’s decision to invest in YOUR startup.
We have all the resources and expertise to help your startup develop a solid business plan and effective strategies to attract “smart money” and build a successful business.