Transcript Business Plans for Technology Entrepreneurs

Business Plans for
Technology Entrepreneurs
Eric Cooper
[email protected]
November 2001
Outline
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Why write a business plan?
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Who reads it?
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How do they read it?
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What should be in it?
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Where can you get more help?
Why Write a Business Plan?
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Clarify your business model and
strategy
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Identify and prioritize what you need
to succeed
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Plan ahead
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Schedule resources efficiently
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Explain the business to others ...
Who Reads It?
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You; your senior team; your advisors;
your Board of Directors
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Document your evolving strategy
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Stay on the same page
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Smooth management transitions
Who Reads It?
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Investors
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Employees
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Strategic partners
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Early customers
How Investors Read Plans
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Kinds of private investors
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family and friends
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angels
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venture capitalists
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strategic investors (other companies)
Differing motivations!
How Investors Read Plans
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Venture Capitalists are financial
investors
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The crux of all financial decisions:
risk versus reward
Risks
Technology risk
Will the product work?
Market risk
Will people want to
buy it?
Competitive risk
Will another company
eat your lunch?
Execution risk
Will you screw up?
Rewards
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Revenue growth
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Profitability growth
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Market share growth
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Exit strategy
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IPO (initial public offering)
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acquisition
What Does a Plan Look Like?
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Executive Summary
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Company Description
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Market
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Competition
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Operations
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Management Team
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Financial Projections
(I read this second)
(I read this first)
Executive Summary
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The elevator pitch
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What will you sell?
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Who will buy it?
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Why will they buy it from you?
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How much money do you need?
Company Description
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Product or service offering
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Development status
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Number of employees
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Facilities
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Summary financial status
The Market
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Define your market narrowly and precisely
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Don't project 1% of a zillion dollar market
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Understand what consitutes a complete
solution
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Read Geoffrey Moore's Crossing the Chasm
on the technology adoption life cycle
Competition
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Who are the competitors?
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What are their strengths and
weaknesses?
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What are your proprietary advantages
and barriers to entry?
Operations
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Engineering
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Manufacturing
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Marketing
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Sales
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Business Development
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Finance and Administration
Management Team
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Why will this team succeed?
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Short bios, not full resumes
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Emphasize relevant experience
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It's OK if your team is incomplete
Financial Projections
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Historical (if any) and pro forma
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Income (profit & loss) statement
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Balance sheet
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Quarterly for three years is customary
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Of course, this will usually be bogus
Financial Projections
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How long will this round of cash last?
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How much cash is needed to reach
key milestones?
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product demo
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product revenue
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break even point
Resources
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Other entrepreneurs
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Pittsburgh Technology Council
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EnterPrize competition
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www.phtc.org
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Entrepreneurship center in GSIA
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www.sba.gov/starting
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Random web pages
Questions & Answers