Different business plan strokes for different startup folks

Some startups don’t need business plan presentations. This includes companies that won’t grow beyond one person and won’t ever raise capital. If you fall into this group, do the thinking behind a plan—but keep your output very basic. A few bullet points about each of the topics in a plan should suffice. Forget the fancy graphics and charts.

If you have more than one founder, want to get feedback on your plan, or intend to raise capital, you’ll need a presentation. Still, demands will vary.

Many startups raise capital from friends and family. These investors tend to be fairly easygoing. Chances are good that your wealthy Uncle is investing in your business because he loves you, wants to help you succeed, and thinks you are the greatest nephew this side of the Mississippi. He’s not going to grill you. Still, the more you explain to him, the more informed he’ll be—which means he’ll be able to do more to help you (e.g. make appropriate introductions)—and the better he’ll understand the challenges and risks you’ll face using his money.

Other startups raise capital from angel investors—people who invest their own money on an amateur basis. Angels that invest in many startups or that are part of angel groups or “networks” tend to see many business plans and have high standards. If you are pitching to angels, you’ll need to have a great presentation.

Finally, some startups raise money from VCs. If you are pitching to VCs, you’ll need a comprehensive, investor-grade business plan backed up with detailed research and analysis.

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