venturechallenge DFJ Writing winning

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venturechallenge DFJ Writing winning Powered By Docstoc
					Writing a winning
 business plan
        What are we looking for and
       what you will be judged against?

1) Team
2) Customer Need
3) Market Size
4) Competition
5) Sources of Sustainable Competitive
  Business Model
                  Key guiding questions

1)       Before starting your business plan
         you need to answer two key questions
     •    What is the pain your customer is
     •    What is the solution, and why is this
          better than any other solutions in the
            What your business plan should

1)   Brief business description
2)   Team
3)   What is the issue / pain point that your
     product / solution will address
4)   What is the size of the market opportunity
5)   Product / Technology Overview
6)   What is the value proposition
7)   Business model / financial model
8)   Competitive landscape
9)   Risk factors to execution
              Brief business description

1)   One paragraph, no more that articulately conveys the
     business opportunity
2)   Starts with a one sentence tag line – grab reader’s
3)   Think of this as an ‘elevator pitch’ where if you only
     had one minute to capture the interest of a Venture
     Capitalist, what would you say?
4)   Venture Capitalists are interested in big problems,
     and bold and innovative solutions
5)   If you cannot distill the core of the business down to
     one paragraph, go back to the drawing boards. The
     simpler the message, the quicker you will draw in the

1)   The most important asset that a company has is its
     team, not its technology, or its business model
2)   Key question to frame this section. Why is this
     team the best team to capture the business
3)   Demonstrate that the members of the team have
     either relevant industry experience or core
     competencies that will facilitate their effort
4)   Be succinct, and keep it tight. VCs are interested
     in work experience and educational background
               Problem you intend on solving

1)       This is your time to utilize the
         brainstorming that you and your team
         conducted before writing this business
         plan. Just as in the executive summary, the
         key here is to be succinct and clear
2)       What is the pain in the market?
     •     Is it an inefficiency?
     •     Is it a need?
3)       What exactly is the solution. Why this, right
     •     Why has no one else come up with this solution
           yet? Has technology only recently made this
                                   Market size

1)       Key question - who is going to be the customer for your
         product and how much will they spend?
2)       Big ideas have big markets. Think back to the initial exercise
         and the question of pain. Think now ‘how much does this pain
3)       How much does the customer currently spend on solutions
         that you will replace
4)       How much are customers willing to spend on a product like
         your own
     •      Depending on the amount of pain, there is a degree of cost
            associated with that pain. Your product should be less expensive
            than that pain, and should represent the obvious choice for the
            customer to make if the solution is provided to him or her
5)       Build the model from the bottom. Who will buy this, how
         much will they spend, and how much revenue does that mean
         for you
6)       Then think of it top down to cross-check. What portion of
         the market do you have to capture to get to this revenue
            Product / technology overview

1)   Make this simple and do not assume that the reader
     necessarily is an expert in your domain
2)   Focus on the question – why is this technology or its
     application unique? What are its main benefits?
3)   Just as in the business summary, be succinct. Diagrams are
     helpful as are pictures / descriptions if necessary to show us
     what you do
4)   Demonstrate that the technology is scalable, and how you
     intend on building or improving this to address the market
     you are going after
5)   Is the technology patent protected? What other applications
     could the technology potentially be used for. Show the VC
     that this is even bigger than what you are initially addressing
                 Value proposition

1)   What is the value proposition of this
     product / technology
2)   How does the customer perceive
     ‘value’ in their purchase of the
     product (why will they buy it)
                   Business model / Financial

1)       How do you make money from this opportunity?
2)       How will you reach your customers?
     •     Advertising? Direct sales? Channels? Partners?
3)       Focus on how it is sustainable, if it is proven in
         other industries or areas, and why the team you
         have in place is the best to execute on it
4)       What are your revenues, gross margin, EBITDA,
         EBT, and Net Income for the next five years
     •     Be sure this foots to the market opportunity. It is unlikely
           that you will capture an entire market – be reasonable
           about your solution
                  Competitive landscape

1)       Who are your competitors?
     •    Your competitors are anyone who is
          addressing the same pain point as you
2)       Why are you better than them?
     •    Technology? Team? Customers?
3)       How are you the dominant player?
                        Risk factors

1)       What are the biggest risks to your
     •    Market risks?
     •    Financial risks?
     •    Competitive risks?
     •    Business model risks?
     •    Execution risks?

1)       This is a guideline, not an outline
     •     Be sure that your business plan includes all of these
           aspects, but make sure it is laid out a manner appropriate
           to your business
2)       As you write the plan, try to write it in a language
         that anyone could understand / value. You want
         this business and the opportunity to be obvious to
         anyone who reads the plan
3)       Ask questions. Reach out to peers, professors,
         CEOs, and entrepreneurs for advice
4)       This is not something you write overnight. Do not
         underestimate the challenge of writing an effective
         business plan

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