When we were raising our first round for hCentive, Manoj Agarwala – our finance wizard – helped us create a very solid business plan which was well-appreciated by many VC.
When I noticed Thanasis over at NAV fund talking about what VC want from your Series A business plan, I thought I should try to provide a template that we used when presenting to them and other VCs.
First of all, the plan should be created in excel and then distilled into a small 6-slide deck. Secondly, you should always try to present it in person rather than just sending it and hoping they will make sense of it themselves. If you have to send it, send the deck but ask permission to present it in person (or at least over phone)
Your 6 slides should be:
- Overall business model. (how you get customers and how you make money)
- Final revenue and goals (things like when you break even, how much you burn till then, whats your end goal)
- Base Assumptions (built bottoms up) and their justification
- Bread Crumbs (how your assumptions lead to final numbers).
- Key Drivers (and how they compare with the rest of the industry)
- How much money you need now and where will it get you
Thats it !! The six slides should be straightforward and simple to follow and should be backed by a model in excel that you can use to answer any questions that might come up.
I agree with Tarun for the most part. I would like to add the following:
- Don’t invent the business model. There are plenty of successful business models out there, just copy the business model from a successful business
- Make sure your assumptions are defensible and reasonable. Offer examples (make sure these examples are not ones in lifetime successes like Google) of other companies that have achieved your assumed numbers.
If you are planning to raise venture capital, the book “The Art of the Start” is quite helpful.