I think that you can include a condensed version of a business plan (like a summary and/or PowerPoint), but you can’t rely on it to attract investors. There’s a mixture of tangible expectations (like a quality pitch, professional/knowledgeable answers to questions, obvious understanding of the market, etc.) as well as abstract expectations (charisma, likability, the “it” factor).
The reality is, you aren’t going to meet the expectations of every investor. It’s just an unrealistic goal. But—you can definitely work on setting yourself apart and keying in on the investors that are most likely to hear what you have to say.
Outside of a business plan, here are some areas that I would encourage you to focus on:
- Express your experience—even if you don’t have it. If you are brand new to startups, it might take a bit to capture the attention of an investor as they usually like working with people who have a track record of operating multiple successful businesses. However, if you haven’t done that then really sell your education and research or any other relevant experience (like maybe you worked as a marketer or financial advisor in a previous life). This is also a great time to include team members who maybe have the experience that you lack. Which brings me to my second point:
- Showcase your team. Every single team member should have a voice when presenting to a potential investor. Be sure to include relevant experience and allow them opportunities to answer some questions where they have an expertise. This not only shows diversity in your group, but also indicates to the investor that you work well together.
- Demonstrate ways that you can see around corners. Talk about potential issues and challenges and how you plan to face them head on. Don’t pretend that you have it all figured out—you don’t. An investor will definitely be weary of a company that lives in a world of nonexistent utopia.
- Prove how your business is valuable. The ability to attract customers and gain revenue definitely matter, but does your business have a real purpose? Does it truly answer a problem in the marketplace? Be sure to clearly define what it is your business solves and why your business is just a little bit better than lead competitors.
- Have facts to back up your financial forecast. Spend some time understanding, researching, and explaining how your business will succeed now and into the future. What kinds of trends will impact your business? How will you keep the goldfish attention span of your consumer base?
- Practice your pitch. I’m just going to throw this out there because it matters more than you realize. Make sure your pitch is thorough, but doesn’t waste time. Be concise, but also be friendly, likable and genuine. There is definitely a human element to investment that people sometimes overlook. Investors want to LIKE the people they work with. Practice your pitch, know your audience, and include only the most relevant information.
A business plan is important, but they are usually pretty lengthy and and investor will likely not be interested in reading it. Plus, execution and delivery is really what they want to understand.
There’s a lot that goes into a startup, and the truth is it can be really overwhelming. To put your best foot forward, you may benefit from talking with a startup attorney.can connect you with a seasoned business attorney that understands the finer details of various stages of a startup. In fact, we’ve already helped over 1000 entrepreneurs just like you. I want to invite you to check out our website and let us know if you’d like a consultation. Best of luck in your business.