Communicating your Idea

One of the questions that I get asked really often is "what goes into a business plan?" or "if I want to communicate my business idea to a potential investor what do I include?". Below is an outline of what the venture capitalists at Sequoia Capital see as important to include in a business plan. It is a great concise outline of what they (i.e. the venture capital community) pay attention to...

Formatting
VC's like business plans that present a lot of information in as few words as possible. The following format, within 15-20 slides, is all that’s needed:

Company Purpose
Define the company/business in a single declarative sentence.

Problem
Describe the pain of the customer (or the customer’s customer).
Outline how the customer addresses the issue today.

Solution
Demonstrate your company’s value proposition to make the customer’s life better.
Show where your product physically sits.
Provide use cases.

Why Now
Set-up the historical evolution of your category.
Define recent trends that make your solution possible.

Market Size
Identify/profile the customer you cater to.
Calculate the total market size (top down) and the size of the market you can reasonably capture and service (bottom up).

Competition
List competitors
List competitive advantages

Product
Product line-up (form factor, functionality, features, architecture, intellectual property).
Development roadmap.

Business Model
Revenue model
Pricing
Average account size and/or lifetime value
Sales & distribution modelCustomer/pipeline list

Team
Founders & Management
Board of Directors/Board of Advisors

Financials
P&L
Balance sheet
Cash flow
Cap table
The deal

The Sequoia Capital portfolio of investments includes some of the most successful technology companies of all times - these guys know what they doing, so when they put out some advice ...LISTEN!!!!