Texas Investment Network

Business Plan Tips

What Investors Are Looking For In A Plan

Investors, whether angels or VC's, are looking for the same things when reading a business plan. They want to know how big the opportunity is, whether this is the right team to exploit the opportunity, who the competition is, what the risks are, and why they can expect this team to implement successfully. Your job in writing the business plan is to address these questions convincingly and clearly.

Emphasize Your Real Strengths

Highlight what your team brings to the table. If your business hinges on a particular competency (for example, understanding the procurement process), your plan will be more persuasive if one of your team members knows something about it and that is brought out in your plan. Rather than including generic resumes of team members, tailor the resumes to draw out the experience each member has that will make him or her a valuable contributor.

Get To The Point And Make It Clear And Comprehensive

Investors see many business plans. A 20-page plan which clearly lays out your business is far more likely to be read than a 100 page plan. Today, some entrepreneurs are using a 15 slide Powerpoint presentation. If your text is short and punchy, you won't need to repeat yourself, because the reader won't be bogged down keeping ten chapters in their head. Reading the same thing over and over, even if it's in different words, can get really tiring. The more you use brevity and give each concept a single home in your document, the more people will want to read it.

Write In Plain English

If you can't explain your idea in English, either you don't understand what you're talking about (What is a transaction enabled atomic journaling database server, anyway?) or you haven't simplified the idea enough. Think, revise, and try again.

Get Rid Of The Hype

Yes, we know you will be the "premier insert product category here of the Internet, achieving 99% market penetration with 60% customer retention in 3 months". Your product will reach "new heights in customer experience through the use of personalization and one-to-one profiling and customization". It will be "user friendly" because you will be creating a truly "ecstatic customer experience". It is a "quantum leap forward" in the marketplace for product category here. Um, yeah. Believe me, we've read it before. About a dozen times today, in fact. (And by the way, the phrase "quantum leap" really doesn't mean anything.) Stick to a tight, simple explanation of your idea. Convince your reader you'll be the best because your idea is the best, not because you can string a dozen buzzwords together.

Use Quantifiable Information

In each section, back up your assertions with solid facts. Even if you are a new venture and cannot give specific figures on the performance of your business, quote figures for the industry or your competitors. These real figures carry more weight than your assumed projections and give more reality to your plan.

Choose A Huge Market

Especially in the internet world, investors are looking more at the market than at the detailed specifics of your financials. Choose a market that is big enough to be an obvious good opportunity. A business which targets teenage girls who listen to music and has a reasonable chance of capturing 90% of the girls that are online is a huge opportunity. A business which targets net-savvy SAAB mechanics who need prosthetic limbs is not.

Texas Investors

Texas > Houston

Experienced investor with MBA looking to substantially grow small businesses.

$10,000 to $300,000

Texas > Huffman

Married, 52 years old. I have over 20 years in Industries Sales experience for rotary screw air compressors and low pressure blower. I have been investing in single family rentals over the past 20+ years. Current self manage 12 single family rentals. I want to learn the multifamily business model. I am looking to invest/partner with someone in the Houston area who has a proven track record doing Multifamily.

$1 to $50,000

Texas > Arlington

I have participated in public and private offerings including oil & gas, banking, real estate, and agriculture. I am a lawyer by profession. I invest individually or in connection with an entity I control.

$500,000 to $10,000,000

Texas > Baytown

I am a 36 year old married man with 2 boys. I am a full time employee as a pipefitter superintendent. My background is generally industrial oil and gas. I am a high school grad with some college experience. I am learning the ins and outs of investing but have yet to take the final step, I am convinced that 401ks do not give me the control I want in my own destiny. I would like to start off small to gain the valuable experience in investing and grow from there.

$5,000 to $30,000

Texas > Austin

The investor is a natural person whose individual gross income (excluding that of spouse) exceeded $200,000 in the last two calendar years, and who reasonably expects individual gross income exceeding $200,000 in the current calendar year; or for such periods, the combined income of the investor with spouse exceeded and is expected to exceed $300,000. Has net worth in excess of $1,000,000, or had and expects to have a gross income (not including spouse's income) for the last two years and the current year in excess of $200,000, or for such periods, had and expects to have all gross income including that of a spouse in excess of $300,000.

$100,000 to $1,000,000

Texas > Cedar Park

Married couple who own a family entertainment center. Husband is a former Navy Construction Battalion (Seabee), with extensive experience in construction build-outs, managing contractors, and leadership. Also over a decade of experience as a financial analyst with the Federal Government, managing accounts in excess of $2B annually, and in private industry, making him ideally suited to ensure detailed financial management of the restaurant. Bachelor's Degree from the University of Virginia and an MBA from George Mason University in Virginia. My wife has a Masters degree from the London School of Economics. Prior to leading the family entertainment center she specialized in economic development and small business consulting, and now works closely with me to oversee every aspect of the business. Looking for companies that could compliment out family entertainment center or that are just interesting business opportunities.

$10,000 to $250,000

Texas > Houston

I am a 47 years old married, Chemical Engineering professional in Houston TX. I have 27 years of petrochemical experience with various roles ranging from production engineer, process engineering, Operations management, Technical management, and roles with global reach. I've lived in the US Gulf Coast and Europe (Germany & France). I have 27 years of investing experience with typical investments such as stocks, bonds, and options. I am looking to expand into private equity. I am active in the Sustainability space, looking to reduce energy intensity, carbon emissions, and costs.

$1,000 to $25,000

Texas > San Angelo

Invested with private small businesses in Eastern Europe and public stocks in US. Had an active management role with many of the companies I invested with. Interested in diversified portfolio and generating higher return than what public stocks can offer right now. I like business models that can show potential for steady monthly revenues. I prefer a profit sharing agreement.

$10,000 to $100,000