V.C.’s Ignore Business Plans, Study Finds

Go ahead and write that 50-page business plan about your fledgling venture if it helps you to focus. Just do not bother showing it to venture capitalists, because it will do nothing to improve your chances of getting financing.

That, The New York Times’s Brent Bowers writes, is the surprising conclusion of a new study by researchers at the University of Maryland’s business school.

Researchers found that venture capitalists, who screen hundreds or thousands of solicitations each year, pay little or no heed to the content of business plans. Instead, the study said, because they make decisions “under conditions of high uncertainty,” venture capitalists rely on instinct and their expertise in ferreting out information by other means to evaluate the prospects of a business.

Full Story: http://dealbook.blogs.nytimes.com/2009/05/14/investors-pay-business-plans-little-heed-study-finds/

(Thanks to http://www.nasvf.org for passing this along.)

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