What Kind Of Business Plan Do Investors Like?

You must have a copy.

Another important issue you need to understand is that investors are not carved out of a mold.

At the top of the investment chain are thousands of venture capitalists from hundreds of VC companies, with friends and family at the bottom, thousands of private investors in the middle, and used to be called "angels".

The most stringent requirement is VC. Only a few thousand business plans can get their favor every year.

Because they invest with other people's money, they must avoid risks as far as possible.

It is impossible for them to deal with a large number of applications received. If there is no personnel recommendation, it is very difficult for you to enter their scope of consideration.

VC is not a shark or a bad guy who is interested in blood. They are just professional managers who are loyal to their duties.

They will not plagiarize your creativity, because they hate the business idea that no specific team works.

To sum up, when VC looks for investment opportunities, what they expect is:

A good record management team.

Yes, that means they will not invest in inexperienced people, but no one will be able to gain experience without investing.

This is the reality.

If the crux of your problem is here, go to angel investors or family and friends (then read on).

Unique products with competitive advantages.

The development prospects of physical products are easier to predict than service products, which is why VC has little interest in the service industry.

Of course, there are special cases, such as the DVD rental home service company, Netflix., which is widely welcomed by the market.

Reasonable valuation.

Use your plan to raise the amount of financing divided by the percentage of shares to be exchanged.

For example, if you want to swap 50% of the company's shares for 5 million dollars, that means you think your company is worth 10 million dollars.

Too absurd valuation will make investors feel unrealistic.

A clear investment agreement.

Consult lawyers about the legality of this investment paction, including how much stock they need to exchange, and the expected dilution of equity in future financing.

VC may also be interested in other situations:

It is possible to increase the company's value by 100 times in three to five years, no matter how much it is worth now.

The business plan of investing at least $3 million or so is, in fact, the more the better.

The business plan must be carefully planned for capital needs and really needs so much money.

There are other business plans for investors to invest together.

VC often feels that the more people are, the safer they are, so they usually do not like to be the only investor in the paction.

Clear exit method.

Investors want to see that you have made arrangements ahead of schedule so that they can get their money back and return in the paction.

The investment pattern of angel investors is hard to sum up. Usually, some wealthy people invest in various fields in the form of independence or group.

Most angel investors have the same concerns as VC, but some angel investors like small investments, or even do not want to be the only investors.