How to Present a Business Plan to Venture Capitalists

culled from:wikihow.com

venture capitalist (VC) is a person or organization that invests in another’s business or business idea. If you have contacted a VC about investing in your business and have received an invitation for an interview, you will need to prepare your business plan to present during the interview. To present a business plan to a venture capitalist, follow the steps below.

Steps

1

Do your research. Know what types of businesses and industries the VC usually invests in, and what characteristics he or she values in a company and its staff members. Keep these things in mind while preparing your presentation and try to tailor it to the specific VC of VC firm to whom you will be presenting it.

1. 
   2
   Introduce yourself and your company. State your name, the name of your company, and briefly describe what your company does. You really want to do this in just one or two sentences. You may say for example, "Hello, my name is Mark Maddox, I am the sole proprietor of XYZ Corporation, and we manufacture educational products for children".
2. 
   3
   Recite your mission statement. If you do not have a mission statement, consider drafting one. Many VCs view a mission statement as an essential part of starting a successful business. Your mission statement should be no more than a paragraph in length and should include the following:
   • The company's purpose. Make it short and to the point. For example, a company who manufactures educational products for children may state its purpose as, "to provide children with high quality, inexpensive, educational materials".
   • Your target audience. Your target audience is the group of people to whom you will market your product or service. For example, a manufacturer of children's educational products may serve children all across the United States or a tax preparation company may serve tax payers in a certain county or state.
   • A description of your company’s product(s) and/or service(s). Describe what your company's product or service is, what it does or how it works, and why someone should want to buy or use it. For example, a tax preparation company may provide faster, more accurate, and less expensive income tax preparation services to tax payers in the area than any other company.
   • An explanation of what the company wishes to accomplish. For example, an animal shelter may wish to "ensure that all homeless and abused animals find caring, loving homes" or a tax preparation company may wish to "make fast, accurate tax preparation available to all taxpayers".
3. 
   4
   Show a PowerPoint presentation. Design the presentation as a visual aid, to be used by the VC, while he or she listens to you describe the information being displayed on each slide in more detail. Your presentation should be clear, concise, and to the point. It should be approximately 20 minutes in length and include:
   • Your company contact information. This includes your company name, logo, tagline, if you have one, the businesses' physical address and your name and personal telephone number.
   • An introduction to your product. Provide a brief description of the product or service your company offers. You might want to use photos or illustrations of the product in appropriate places, or include a video demonstration of the product.
   • Your company’s financial information. A summary of your most recent profit and loss statement, your current budget, and a financial projection for the following year should be included in the financials. Consider using bar graphs and pie charts to illustrate the most important points.
   • A marketing plan. The plan should be a summary of your marketing strategy from your business plan, and should include just the most important points. You may wish to illustrate your points with charts or graphs to make the plan easier to read and understand.
   • A description of the competition. Identify and name your competition. Describe the competition’s product and marketing strengths and weaknesses. You may also want to briefly describe why your product is better than your competitor’s product and how you will convince potential customers of that.
   • A summary of why the VC should invest in your company. Create a bulleted list of your company’s main attractions or write a paragraph selling your product and your company. However you format it, this is your last chance to 'pitch' your product to the VC.
4. 
   5
   Introduce your management team. You may choose to include this in the PowerPoint presentation or make it more personal by speaking about the team at the end of your PowerPoint slideshow. However you do it, your introduction should include the following information for each team member:
   • Experience. A team member’s experience is important to a VC. After all, new companies fail everyday due to a simple lack of experience. Your team’s previous experience and successful business ventures will help convince a VC that your business will succeed and is worth investing in.
   • Education. A team member's educational background is important to a VC considering investing in your company. Well-educated members can give your company an advantage over those company's without educated team members. Describe each member’s education and any degrees he or she possess.
   • Personal characteristics. Your team member's character and personality traits are an important factor in whether your business will be successful or not. Hard working, intelligent, creative, reliable, trustworthy team members are more apt to create and run a successful business than lazy, unreliable, and dishonest team members. Talk about your team members’ strengths and how they will contribute to the success of your business.
5. 
   6
   Describe how much capital you need and what you will do with it. You may wish to make extra slides or create an addendum to your presentation so that you can show charts, graphs, or bulleted lists while presenting this information. Be very specific about how much money you need and how it will be spent.
6. 
   7
   Ask the VC or group if there are any questions that you can answer. No matter how well you cover everything in your presentation, a person considering making an investment in your business will very likely have some questions. Ask if there is any additional information that you can provide to the VC, any questions you may answer, or any concerns that you may address. Be prepared to answer questions about your business, product, and financials completely and honestly.
7. 
   8
   Thank the VC for his or her time. The professional way to end any business presentation is to thank your audience for their time. Shake the VC's hand and tell him or her that you appreciate their time and look forward to hearing from them. If you have a business card, this would be the time to hand it to them.