Bootstrapper.com - Confessions of Serial Entrepreneurs

I am often asked what VC’s typically look for when performing analysis/due diligence on a business plan. Below is a plain and simple outline on what they look for:

1. Cover Page

1. Table of Contents

1. Executive Summary
   1. Company Intro
   2. Concept and Mission
   3. Mission Statement
   4. Strategy
   5. Company’s Products and Services
   6. Market Analysis and Trends
   7. Competitive Analysis
   8. Value Add of the Company
   9. Financing Amount, Purpose and Time Span
   10. Milestones
   11. Management Profile
   12. Financial Summary
   13. Exit Strategy

1. Company History and Current Status
   1. How Company Started
   2. Founders and Personnel

1. Revenue Model
   1. Nature of the Business
   2. Profit Margins of Industry

1. Technology, Products and Services
   1. Description of the technology (include diagrams)
   2. Value Add
   3. Competitive Advantages
   4. Proprietary Nature
   5. Current State of Development

1. Market Analysis
   1. The Overall Industry
   2. Market Segments Targeted and Rationale
   3. Customer Profiles (needs met/unmet, buying patterns)
   4. Describe how the company’s products will meet the needs of intended markets
   5. Describe all industry forces (suppliers, buyers, threat of substitutes)
   6. Barriers to Entry
2. Competitive Analysis

1. 1. Competitor Profiles (History, Segments Served, Market Share)
   2. Provide Solutions to Breech Entry Barriers
   3. Competitive Advantages (IP, etc)
   4. Anticipated reaction from competitors upon market entry

1. Sales and Marketing

Sales

1. 1. Material, Labor, Overhead Costs
   2. Methods of Promotion and Distribution
   3. Revenue Model
   4. Customer Selling Approach

Marketing

1. 1. Identify customer purchasing decisions and trends
   2. Identify current needs served and unmet by competition
   3. Identify company’s positioning (quality vs. price, innovator vs. adaptor, follower vs. leader, private sector vs. government)

1. Management Profile
   1. Background Information
   2. Capabilities
   3. Management Gaps
   4. Organizational Chart

1. Financial Strategy

Financial Operations

1. 1. List of all loans and terms
   2. Operating Budget
   3. Milestones
   4. Pro-forma income, cash flow and balance sheet

Financing

1. 1. Breakeven Analysis
   2. Amount Needed, Time Period, Total Amount Required
   3. Capitalization Table showing the amount raised and the percentage of ownership
   4. Exit Strategy