B-Plan For VC Funding
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B-Plan for VC Funding

 

Looking for VC funding? Need to Submit B-Plan to a VC?

Here is the basic Bullets, need to be considered while Preparing B-Plan to VC’s:

 

1.  Elevator Pitch (1 Slide)

A 5 line quick pitch on

What does the Company do?

What new benefits do you provide and/or what pain points are addressed?

How are you differentiated from competitors on a sustainable basis?

 

2. Vision & Mission Statement (1 Slide)

Please define the Vision and Mission statement of the Company.

The management team's vision for the business needs to be powerful and realistic enough to rally employees, customers, investors and the industry around it. Venture Firms usually partner with businesses that have the potential to be market leaders in their category.

 

3. Market & Industry Environment (2 Slides)

Help VC learn more about the specific market segments that you are targeting and the industry that you operate in.

This would include relevant facts of the market such as market definition, key segments, size of target segments, growth rates, key market trends and challenges/issues the market is facing. Please briefly note the critical success factors for a company in this market.

A visual illustration of the market place with names of various participants, such as competition, vendors, distributors and customers would paint a picture of the environment.

 

4. Value Proposition, Key Products/Services and Differentiation (2 Slides)

Use this section to convince VC that a very large number of sticky customers will repeatedly pay you good amounts of money to enable you to build a sustainable, profitable and scalable business.

Tell VC why the customer is passionate about each of your products/services; what benefits does the target customer get and/or what pain point is addressed. Also, briefly note the profile of your typical customer.

Describe your key products/services today and the roadmap for the next two to three years.

Explain how your business is deeply differentiated on a sustainable basis; for instance by way of a unique business model, technology or industry partnerships.

 

5. Competitive Scenario and Entry Barriers (1- 2 Slides)

Please provide a table describing the competitive scenario with separate columns for competitor name, business line, geography, representative customer list, key strengths and weaknesses of each competitor.

A thorough understanding of the competition will demonstrate an awareness of the environment and the resulting opportunities and threats.

Highlight why an extremely well-funded new entrant in your market will not succeed in dislodging your position.

 

6. Business Model and Sales/Marketing Strategy (2 Slides)

Note the important revenue and cost drivers of your business.

Please describe the sales/marketing strategy ensuring that you include

a. Overall product/brand positioning

b. Sales & distribution strategy

c. Key business development alliances & partnerships

d. Pricing approach

 

7. Market Traction (1 - 2 Slides)

The best possible validation of your business strategy is a list of repeatedly and well paying quality customers. So please use this section to tell VC about your customer wins and historical traction with key accounts.

For example, as applicable to your business, please provide metrics such as your key accounts, number of unique users, distribution partners, average revenue per account/user and any other metric you consider important for measuring traction of your business.

Please forecast your projections on each of the above metrics for the next four quarters.

 

8.Management Team (1- 2 Slides)

This is a vital section of the business plan. Our belief is that good teams are rarer than great ideas.

VC' are looking for solid management teams that demonstrate strong ethical standards, entrepreneurial mindset, a history of achievements, formidable domain expertise, proven chemistry between founders and perseverance.

Please share with them specific facts about your team's past (with ex-employer/venture names, role descriptions and timelines included) and why it will be able to meet the challenges posed by a very dynamic market environment.

 

9. Organisation (1- 2 Slides)

Do tell VC about your organization's human resource structure, number of employees and locations. Please include information on the constitution of your Board of Directors and if applicable your Board of Advisors.

 

10.  Financials (2 Slides)

Please provide all currency figures consistently either in INR or USD only.

This section should include audited annual high level Profit and Loss statement for the last three years (if applicable) and projections for the following three years.

Kindly list the main 3 or 4 assumptions underlying the financial projections. Please break down the revenues by the main business lines/products/services as applicable.

 
  1. 11.   Exit (1 Slide)

Please provide all currency figures consistently either in INR or USD only.

Venture capitalists invest with a definite intent of exiting the investment within a defined time frame ranging from 3 to 7 years. Exit may occur in the form of the Company making an IPO (Initial Public Offering) or an M & A (Merger & Acquisition).

Please list the 4 or 5 most likely acquirers of your business and why would they be interested in acquiring your Company?

Do provide a few examples of recent exit valuations in this market (IPO and/or M & A).

 

12.  Capital (1 Slide)

Tell them how much money you are raising and give VC a high level breakdown of how you will deploy these funds across the various business streams/segments/functions of your Company.

Please specify the current capital shareholding structure and the history of earlier funding; dates of such transactions, amounts raised, the pre-money valuations applicable and the equity stake allotted.

Do provide a few examples of recent exit valuations in this market (IPO and/or M & A).

 

13.  Risk & Gaps (1 Slide)

Share the specific risks that your venture and market/industry face. What are the likely reasons that would cause your Company to under-achieve its targets? (These may be company-specific and market-specific reasons). What steps are being taken to mitigate these risks?

Finally, share with them the gaps that exist in your Company today. Those could be in the strategy, business model, customer traction, talent, technology, operations etc. By sharing with them your perspective on gaps that exist you would allow VC to work with you in bridging them and enabling your Company to achieve its vision. Truly, this section may be used to compellingly demonstrate the maturity of the management team.

 

 

Thanks & Regards,
CA. Rahul Kothari
SBIC: Strategic Business Investment Centre
www.sbic.in

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