One final note: investors who want business plans are probably not your target market, if you’re founding a high growth technology startup. We had lots of great followup conversations with the angels who wanted them, but ultimately none of them turned in to investors
A bit of sense from Dan Shapiro which is worth reading in its entirety.
The problem I see at the moment is a heap of self-labelled entrepreneurs who won’t write anything down. They have obviously spent too much time watching Dragons Den or making pointless elevator pitches at BarCamp (where most people are too polite to be honest) and reckon that by sheer force of personality they’ll get what they want. Because, obviously, this has happened. Deals can be made on the back of a napkin, the investor wants to invest in you as a person so they’re not interested in the detail. And I’m not even talking about a 30 page operations plan, folk won’t even put the time n to do the executive summary which is, after all, the most minimum of effort and the only thing worth writing.
I say this after writing a dozen business plans, after finishing an executive summary and now having to write the accompanying 30 pages of supporting materials for a strategy document. I’m currently on page 11 with that one. But you have to choose your battles and suit them to the audience. And by audience I mean customer.
The customer is the person who gives you money. The customer may change over the life cycle of your business and you’ll need to change your pitch accordingly.
- The customer as private investor
- The customer as public sector
- The customer as VC
- The customer as Punter
– will want a story about markets and returns and how you’re going to achieve them. You are competing with golf, drinking cocktails by the pool and sailing in the Aegean so your pitch needs to be short, snappy and exciting.
– a very different story when accessing public funds. The risk-aversion will go deep and wide and you’ll have to address every concern. And it’ll need to be written down.
– in many ways like the private investor but with fewer bikinis and sailboats. You have to outline possibility and opportunity and, to be honest, make I seem like you can deliver.
– way too many variables depending on where the market is, how much it’s going to cost, whether it’s a hit model or a slow burn, buy once or forever subscribe. Arguably these are the second most important customer.
Your punter customers don’t necessarily want to see your entire business plan and it’s likely that your initial investors don’t either. But they’ll want to see something and the more institutionalised they are, the more paper they’ll want to see.
At the moment, Northern Ireland is awash with startup supports. There are more than 10 startup incubators either in planning or in execution. All of them will require you to do more than an elevator pitch.
