The article gives you information on An Effective Business Plan To Attract Venture Capital Funding. A business plan is considered to be the most effective tool used by entrepreneurs to attract business investors to fund their business. How much capital a company can raise often depends on the effectiveness of the business plan. A business plan in other words has to be a well-structured document that will help you in securing funds from venture capitalists, banks and other investors and lending agencies to help finance your business.
There are some essentials that need to be followed while writing down a business plan to attract a business investor or a venture capitalist. Some of these include:
A convincing introduction: In order to attract venture capital funding, it is essential to include an introduction or an executive summary that is convincing and has the potential to create an impact on the investor, so that he gets motivated to invest into the venture.
A well structured body: Although the executive summary is something that attracts investors the most, the body of the plan needs to convey the meaning and the purpose of the business. The different sections such as nature of the business, market and competitor analysis, management team and the company’s marketing strategy is what attracts more venture capital funding.
The USP of the business: In order to attract investors, a very important thing the entrepreneur should do is highlight the unique aspect of the business, popularly called the unique selling proposition. For example, an internet-based business should focus on how much of traffic it is generating.
Some companies highlight on how its products/services is different from its competitors, some focus on the marketing strategies, corporate social responsibilities and so on. Whatever the USP is, the plan should be able to persuade the potential venture capitalist that it has the potential to make profit and make some difference in the market with the help of its products/services.
An interesting layout: Many entrepreneurs tend to ignore this aspect of a business plan, but it often creates an impact to venture capitalists. A typical business plan has a boring layout. However, successful plans often have interesting layouts with short paragraphs, use of appropriate bullets and judicious use of colors, images and pie charts, alongside relevant information.
A good packaging: A good packaging of the business plan is essential to attract venture capital funding. There are three types of summaries that attract investors, and these needs to be highlighted. These include: executive summary, management summary and financial summary. Once these are packaged well and presented before the investors, you can be assured of raising capitals for your business. A cover letter requesting for funds is also very important and has to be written in meticulously.
Investors look for realistic plans. So, one should not come up with a highly optimistic financial projection as such plans may get rejected outright.