Business Planning and the Business Plan

Business Planning and the Business Plan - In preparing for...

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1 1 Erik Sander: EGN6640 In preparing for battle I have always found that plans are useless, but planning is indispensable. Dwight D. Eisenhower ± Most tech. start ups fail in the first 5 years ± 80% of failures due to under capitalization, marketing & management not the technology ± Poor timing, fundraising, choice of expenditures ± Overestimating market demand; Underestimating costs ± Focus on tech. rather than business/market development ± Each tech development stage costs 2 10 times as much as previous stage ± Financing (General Stats) ± First $1M scraped together; Next $1 20M from sales/investments ± Less than one fifth of companies with 40%+ annual growth have VC ± Of 100 business plans reviewed by aVC 1 2 will get a call ± Of 10 presentations 1 will get financing ± Of 10 financed–1 2 hit, 3 5 living dead, the rest fail Erik Sander: EGN6640 2
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2 ± To Sell Yourself on the Business ± To Arrange Strategic Alliances ± To Obtain Large Contracts ± To Attract Key Employees ± Mergers and Acquisitions ± Motivate and Focus Management Team 3 Erik Sander: EGN6640 ± To obtain financing ± To mitigate avoidable risk ± Make sure everyone’s on the same page ± Make sure all market and competitive factors are considered ± Do the financials–Does this thing float? ± Identify key resources / alliances to get to market ± Vet business and revenue models Erik Sander: EGN6640 4
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3 ± Document that defines your business and presents a compelling argument to you, your potential employees, partners and and investors that your company will be a successful enterprise. ± Fundraising Instrument Designed to convince a potential investor to invest capital in your business. ± Risk Mitigator Thorough, rigorous and realistic process of thinking through your business Erik Sander: EGN6640 5 ± Business and stakeholder goals and dedication ± Potential partners and competitors ± Funding strategies and options ± Key requirements (technology, employees, partnerships etc partnerships, etc.) ± Prioritizing and focusing efforts & resources ± Dedication to business planning 6 Erik Sander: EGN6640
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4 English BizSpeak Who are you Management Team; Strategic Allies; Partners; Boards; Vendors What are you doing Product / Service Offering; Core Technology; Product Lines Why can you do it better than anyone else
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Business Planning and the Business Plan - In preparing for...

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