Sorry its been a while since the last post, I was away with my family for a week. In the time I was gone we received a number of new business plans. Continuing a trend that has been evident over the past few years, many of the plans have compelling business ideas. The issue still remains, however, the construction of those ideas in a coherent fashion. In the last post we dealt with competition, both obvious and not so obvious. The point was to deal with competition honestly and upfront. Ask the potential buyers of your product or service whom they view as competition and you might be surprised. In today’s post, we delve into the team.
5. Who are the people running the show? This seems obvious. One of the core issues VC’s deal with in virtually every business is team building. We help recruit, mentor and advise on key hires all the time. I personally believe this is as important to an investment as any criteria. I bet on jockeys as much as the horse.
Most plans include the obvious, using a section to outline the founder’s background and the management team’s bios. That’s fine and it will help us understand your historical reference. What is missing, however, is the relevance. Some of the best plans I have ever seen use the bio section as a way to create the bridge to why this team is the best to execute the specific vision as laid out. This can be done with a paragraph or two explaining why this particular team was put together. e.g. Given John’s experience with building out the core infrastructure at XYZ, we are convinced he can architect a scalable solution… etc. Sometimes its best to outline what you believe are the core roles necessary for this stage of the company. Brand marketing may be required at some point, but given short-term goals are further developments of the site and attracting a few beta customers, a CMO level position isn’t necessary at this stage. Through this needs analysis, the plan can effectively communicate a link between the need and the skill set. Its ok to point out that the need is still open. An honest assessment of the company and its current goals is preferable. Remember, we are still dealing with an executive summary so try and keep it brief but powerful. In a later post, we will deal with the type of people that tend to make attractive funding candidates.
Next post: 6. How do you intend to distribute?