Startups: Who Needs Business Plans? Draper Fisher Jurvetson, Mayfield, Sequoia…
Who needs business plans? So rallies the current conventional Silicon Valley startup hype.
Who indeed! Draper Fisher Jurvetson, Mayfield Fund, Sequoia Capital…
In fact, Timothy Draper, Managing Director DFJ, made a personal pitch for business plans from Silicon Alley entrepreneurs at a summer NY Tech Meetup demo event.
Draper at the Draper website on the importance of business plans for startups, the sooner the better:
Q: At what stage should an entrepreneur consider approaching a top-tier venture capital investor?
A: They should approach DFJ immediately. We like to help a company from the very beginning. Some of the early business planning can be the most important to the company’s long term success.
Q: What’s the best way for an entrepreneur to make the initial approach to a venture capital investor?
A: Get us an executive summary as soon as possible. There is no need to come with an introduction. The business plan should be clear and concise. Every detail is not necessary. Full resumes should be included in the executive summary. A full discussion of competition is also very important to us.
Q: What do investors look for in a business plan?
A: A clear understanding of the business. How do you plan to make money? How much money is required? Why is your company unique? Why can it overcome much larger and better financed competition? What does the competition look like, both startup and large company competition? Who are the people in your team? What are their complete backgrounds? What is the company going to focus on?
Q: How seriously do investors take the business plan?
A: Very seriously. The business plan includes your business model, your team, your competition, all of which can be the difference between success and failure in business.
Q: Which sections of the business plan are the most interesting for investors?
A: The people are the most important. The business model is often very critical. The competition discussion is always important. We understand that the best people can overcome almost anything. We also believe that a large market, and large margins can be somewhat forgiving.
What is Mayfield Fund “looking for” from entrepreneurs in order to realize its “investment strategy”?:
Flexible and sustainable business models with strong customer value propositions, a large addressable market and a focus on profitability and ROI.
Some “key questions” Mayfield “asks entrepreneurs” include:
- Are you addressing a large and fast-growing market?
- Do you have a compelling value proposition?
- What is the day like in the life of your user?
- Who are your competitors?
- Do you have a world-class team?
- How far will this money take you?
WHO ELSE WANT BUSINESS PLANS? FOR MORE SEE:
Want Sequoia Funding? Submit a Business Plan: Here’s How AND Kleiner Perkins Venture Capital: Business Plans Please
WANT TO SUBMIT YOUR BUSINESS PLAN?: Draper Fisher Jurvetson ~ Mayfield Fund ~ Sequoia Capital ~ Kleiner Perkins Caufield & Byers
NEED HELP IN DEVELOPING A BUSINESS PLAN? CONTACT DONNA BOGATIN
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