Digital Ventures

As you may know I work extensively with 3 of the World’s Top 10 business schools and I regularly have to help MBA’s work on their business plans. In working with them I help them shape their plans and eventually I often have to rate and mark them as part of their course grade!

In order to help them ensure that their plans can withstand the "beating" it will get under examination from investors, and mainly VC’s, I came up with a simple and informal way to check out a plan.

Here it is, compare your plan to these tests and see how you think it measures up…

Hopefully by testing rigorously you will expose any weaknesses before you send it out and can make your plan as strong as it can be. This is critical as you will get only one chance to impress a VC and get through the incredibly tough business plan review process – don’t waste any hard earned opportunity with a plan that’s not as good as you can make it!

Feedback Scale for a business plan

   Readability – Does the idea come across clearly and easily? Is the language and communication method used effective? Is there a logical flow and does the plan have me “nodding” in agreement and understanding as I read through. Are the spelling and grammar right? Are all the required topics included in the plan in sufficient detail and the right places? Is there a “story” I get excited about or that holds the reader throughout the plan?

   Lucidity – Is the idea and the business compelling and obvious. Do it get “it” in the first few minutes of reading and do I want to read more to understand the full details. Can I feel the pain, see the business solution and get that it’s an “Advil” solution that is required by the target market now. Has the idea been illustrated clearly in terms that allow me to “feel” it and experience it in a way that’s meaningful to me? I am thinking yes I can see how that would work in my own experience.

   Believability – Are the plan, the numbers, the people and the idea credible. Does everything stack up or am I questioning assumptions, issues and the concept. Are there any obvious “dumb” issues that turn me off right away or obvious holes in the plan that should have been highlighted and covered off? Are there the classic faux pas and lazy assumptions/statements or is everything nicely backed up with fact based arguments.

   Fundability – Is the idea and the market big enough to attract the investors I am seeking. If this is VC is the IRR correct and is the idea big enough for my fund. Ideally the TAM is $1Bn range and the revenue expected at year 5-7 $100M+ minimum. Is there scope in the plan for changing the business in order to succeed? Are their multiple revenue opportunities or extensions to the core market? Is this team the team that can pull off this idea?