Business Plans and Angel Investors

I attended two extremely helpful — and mutually reinforcing — entrepreneurial events last Thursday: a free (!) Business Plan Writing workshop offered through the Northwest Entrepreneur Network (NWEN) and a seminar on "An Entrepreneur’s Perspective on Angel Investing: Plan, Present and Negotiate" offered through the MIT Enterprise Forum of the Northwest. The former provided some guidelines for how and why to write a business plan; the latter provided some first-hand experiences by successful entrepreneurs who have effectively used business plans (and other tools) to attract investment.

The Business Plan Writing workshop pn Thursday afternoon was led by Bill Keough, Director of Business Development for Hubspan, Inc., and Bryan Brewer, Founder & CEO of Business Plans Northwest. They posited the goal of a business plan as "a tool to convince someone else that your venture is worth pursuing"; I like that, as it is broad enough to encompass all [prospective] stakeholders. They also emphasized the value of empathy: being able to adopt the perspective of convincees (my term for potential investors and employees … and existing spouses). Throughout the workshop (and the MITEF seminar), empathy and other traits associated with emotional intelligence (e.g., self-awareness and optimism) were either implicitly or explicitly referenced repeatedly.

The slides from Bill & Bryan’s presentation will be posted on the NWEN web site soon. Among the pearls of wisdom I gleaned from the workshop:

* The idea behind a venture is not nearly as important as the management team and their ability to execute (my notes read "99% execution").

* The first paragraph of the business plan should include some financial projection that provides quantifiable evidence that you are aiming high.

* Your board of advisors can help create an unfair advantage, by giving you access to some world-class expertise that your competition does not have access to.

* Wherever there is a business opportunity, there will be competition … and if it is an [as yet] largely undiscovered opportunity, there is always the competition from inertia.

* It’s not enough to simply identify the pain that your product or service will help overcome, you have to assemble evidence that enough people will be willing to pay enough money to use your product or service [aye, and there’s the current rub for me].

Full Blog: http://gumption.typepad.com/blog/2005/12/business_plans_.html