According to Pratt's Guide to Venture Capital Sources, "if the (business) plan is done properly and completely, it will probably take 150 to 300 hours of intense work." This might sound like a lot of work but the business plan does need to be thorough. The venture capitalist wants to know if the business is viable taking into account every aspect of the business from a thoroughness of the market analysis and stratagy to the competency and strength of the management. "Before committing their funds for what will probably be at least five years, most venture capital investors will want to be certain the (business) plan has been carefully thought through..."
With the high level of competition for the scarcer venture capital, the venture capitalist will spend little time on a business plan. He will most likely read only the executive summary portion of the business plan. In addition, as a rule of thumb, a company should have the potential to be worth at least $30 million within three to five years to be of interest to the venture capital investor.
Because there are many reasons for doing a business plan, there are different types of business plans. A business plan should help put your business ideas to paper. The business plan will help identify problems and issues with a venture. The "venture capital" busines plan is the highest level to which any entrepreneur's business plan should strive to attain. The venture capitalists have set base standards of profitability, performance, competency for their venture capital dollars. While these standards my not be relavant to every entrepreneurs business, the standards are available to entrepreneurs to benchmark their business' performance.
posted by Silentman, Henry C. @ 17:43 hours MT(GMT-7)
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