Writing a Business Plan : Startup Ideas : Sequoia Capital : US. Writing a Business Plan At Sequoia we like business plans that present a lot of information in as few words as possible. The following business plan format, within 15–20 slides, is all that’s needed... read We like business plans that present a lot of information in as few words as possible. The following business plan format, within 15–20 slides, is all that’s needed.
Company purpose Define the company/business in a single declarative sentence. ProblemDescribe the pain of the customer (or the customer’s customer). SolutionDemonstrate your company’s value proposition to make the customer’s life better. Why now Set-up the historical evolution of your category. Market sizeIdentify/profile the customer you cater to. Competition List competitors List competitive advantages Product Product line-up (form factor, functionality, features, architecture, intellectual property). TeamFounders & Management Board of Directors/Board of Advisors See also Elements of Enduring Companies. Elements of a Strong Business Plan | General Catalyst Partners. Napkin Think Force yourself to summarize your idea on the back of a cocktail napkin.
Don’t submit your plan until you have this level of clarity. Team Who will occupy the leadership roles in your company, why are they the best players for the task at hand, and how will they go about building an agile, customer-focused culture? If you believe that an advisory board or governing board will help you grow your dream team, we may be able to help you find the right people. Pain What problem are you trying to solve? Solution Why is your solution superior to competitors, who are the key competitors, what differentiator will propel your solution to break through and achieve broad adoption? Customer Acquisition Too many early stage businesses fail to fully explain their methods and costs of acquiring customers.
Business Model Show us the near and long-term value of a customer, how you earn revenue, and your growth projections over at least a three-year period. Capital Efficiency Financials Final Answer? Words. The 11 Risks VCs Evaluate. Though the industry is called venture capital, the goal of a VC isn’t to maximize every risk. Instead, we try to understand all the risks a business might face and weigh those risks with the reward - the exit. Here are the major risks that I typically review when a startup pitches. Market timing risk - Is now the right time for the business? It’s often hard to evaluate this risk, but nevertheless, it’s an important consideration. Business model risk - Is there a clear business model? Market adoption risk - Are there strong competitive players in the market? Market size risk - If the company is successful, is the exit scenario large enough to provide the types of returns our fund needs?
Execution risk - Does the team have the right skills and passion to reach their goals? Technology risk - Does the company have to develop a new technology that may not reach fruition, or may take much longer than expected? Platform risk - Is the startup building atop YouTube, Twitter or Facebook? Class 8 Notes Essay. Peter Thiel’s CS183: Startup - Class 8 Notes Essay Here is an essay version of my class notes from Class 8 of CS183: Startup.
Errors and omissions are mine. Bruce Gibney, partner at Founders Fund, gave the lecture these notes are based on. Credit for good stuff goes to him and Founders Fund. Class 8 Notes Essay—The Pitch I. One of the most important things to remember when thinking about pitching is that there are huge numbers of pitches in the world. Conceptually, pitching sounds easy. But it’s not that easy. Humans are massively cognitively biased in favor of near-term thinking. Before you pitch you should have a clear goal in mind. First, you need to raise the right amount of capital. Second, higher valuations aren’t always in your interest. Your subsidiary goal should be to keep control of your enterprise. II. It’s always important to understand your audience. One of the most important things to understand is that, like all people, VCs are different people at different times of day.
Startups: How to Communicate Traction to Investors - Posts. The Best VC Meetings are Discussions not Sales. This is part of my blog series “Pitching a VC.” I’ve sat through a lot of VC pitches and having been CEO of an enterprise software firm for many years I’ve also sat through many customer meetings with sales teams. There is one classic mistake that I see across both types of meetings – “the tell & sell” presentation. This involves a person who leads a PowerPoint presentation in which the presenter feels more comfortable racing through pre-practiced slides and rattling off charts & bullet points than having a discussion. The presenter comes out of the meeting proud at having gotten through all 30 slides (and maybe even a demo) with a bunch of smiling faces and nodding heads and no discussion.
After the sales meetings I would ask the exec afterward, “how do you think it went?” And always be surprised when they’d say, “great, I think they really liked it. The advice I gave to my sales execs is the same advice I would give to you: smiling, nodding heads are normally not a great sign. 1. 2. 3. Data and Statistics | Research | EMPEA. VCs Invested $26.5B In 3,698 Companies In 2012, Total Dollars And Deal Volume Both Down. A new Moneytree report is being released this evening, showing that annual VC investment dollars have declined for the first time in three years. The study, which was conducted by PricewaterhouseCoopers and the National Venture Capital Association (NVCA), and based on data from Thomson Reuters, reports that there were $26.5 billion put into 3,698 VC deals in 2012, a decrease of 10 percent in dollars and a 6 percent decline in deals over the prior year. For the fourth quarter, venture investment of $6.4 billion into 968 companies fell 3 percent in dollars, but rose 5 percent in deal volume over Q3 2012.
While the numbers differ slightly, this data is in line with a similar report released earlier this week from CB Insights. Most industries saw double-digit decreases in investment dollars, especially the Clean Technology and Life Sciences sectors. However, the software sector actually saw an increase this year in dollars invested. Fund Raising is a Means Not an End. Not all that glitters is goldWilliam Shakespeare For many entrepreneurs “raising money” has replaced “building a sustainable business” as their goal. That’s a big mistake. When you take money from investors their business model becomes yours. One of my ex students came out to the ranch to give me an update on his startup.
Entrepreneurs need to think about 1) when to raise money, 2) why to raise money and 3) who to take money from, 4) the consequences of raising money. It all starts with understanding what a startup is. What’s a Startup? • Temporary Organization: The goal of a startup is not to remain a startup. . • Search. . • Repeatable: Startups may get orders that come from board members’ customer relationships or heroic, single-shot efforts of the CEO. . • Scalable: The goal is not to get one customer but many – and to get those customers so each additional customer adds incremental revenue and profit. Who to take money from? There are two reasons to take venture money.
Lessons Learned.