Mr. Angel's advice on business plans is strident - and timely.
For entrepreneurs seeking angel investor funding, the deadline for submission of applications to compete to be one of the five companies to present at CVG’s Live Fire! ™ has been extended to midnight, Wednesday, March 11, 2009.
Those who have submitted applications can update them; those who haven't can do so until midnight, March 11.
Inside VT KnowledgeWorks provides advice to entrepreneurs seeking angel investment from an authoritative source with a distinctive voice. Just as "Stanley Bing" writes with a pseudonym for Fortune, given that the angel investing grapevine can snap with a whisper, this individual prefers to remain anonymous. Meet "Mr. Angel."
We asked Mr. Angel this question:
No matter how top-notch a company's business model is, or how fantastic its pitch is to an angel investors group, what are top three items missing from a business plan that doom it to not receive funding?
Mr. Angel replied:
1. If your business plan is printed, opened and read by the screening committee, and an intelligent, charismatic leader doesn’t jump out from your business plan like a 3-D insert, we’re not interested. We’d rather invest in an A+ person and a B+ idea BEFORE the opposite (although we prefer all A’s, of course).
The person who presents to the screening committee MUST be the de facto leadership of the company. Don’t send your scientist (a.k.a. owner of the patent to which you have joined yourself) to do a leader's job if their strength is science, not PowerPoint - and business models, etc.
If the presenter can’t dazzle us out of our money, they clearly won’t be able to dazzle the next round into funding and the next round after that - which is the only way we, the angel investors, ever get out of the company with at the very least a small return on our investment!
2. If your business plan (BP) is missing substantiated facts which would have been easy to click on to get to to the article/reference/web site/quote, then don’t put that in the BP. This isn’t your father’s business plan. It needs to be interactive, be done in Word, and be set for readers to click on a link and have it TAKE the reader to the footnote.
Forget the listings on the last page like you learned in high school. Yes, put that on there and reference them in case someone prints the document without the underlying links to read on the train home, but otherwise, show you’re up-to-date.
“The pet industry’s growth is expected to be X over the next two years." THAT should be LINKED to a URL through a Word doc that takes the reader DIRECTLY to your source. If you can’t do that, print the article, sign up for Box.net, up-load your footnotes, create links to each document and put those in your business plan. The plan that reduces our work gets to the top of the pile VERY quickly.
3. If your business plan is missing correct spelling, you’re dead. If you don’t have that kind of attention to detail, get help from three other friends to read it. Pay them for every spelling error they can find. You’ll thank them for it for years.
BONUS: If you go to a funding source and don’t have LinkedIn completely filled out and with some real business contacts on it, we’re not impressed. Get with the program.
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The inaugural VT KnowledgeWorks Entrepreneurship Summit will be held on Thursday, April 2, 2009, in Blacksburg, Virginia.
During the CVG’s LiveFire! ™ session in the afternoon of the Summit, five companies selected as pitch-worthy by the Charlottesville Venture Group (CVG), in affiliation with the Virginia Active Angels Network (VAAN), will pitch in public, answer questions in public, listen to the angel investors express pros – and cons – in public, right there in front of an auditorium full of 100 silent, scrutinizing audience members.
"No one's feelings are spared and no question is out of line."
The auditorium only has 100 seats. If you want to be a member of that silent, scrutinizing audience, you might want to register now.
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