Nic Brisbourne and Tim Berry on what a Business Plan should include

In the context of our Business Plan Development course we have to research about what experts in the field of investment consider key that an entrepreneur should show in it’s BP. The reason? Well to prepare us or at least have the most accurate idea of how it works for when the time comes that we will need to present our own BP to a group of investors. I found two interesting articles/blogs of two experts that I considered useful and practical especially because it’s information coming from people that know what they do and have years of experience in the investment field.

Nic Brisbourne is a British expert venture capitalist since 2000 and is currently partnered with DFJ Spirit. Among his career he counts with being an expert focusing in software and media working from Europe to Silicon Valley and having been part of Reuters Venture Capital (www.telegraph.co.uk). Brisbourne not also enjoys being a venture capitalist but also shares his thoughts on the European market and venture capitalism through his blog ‘theequitykicker’ where one of his posts from September last year gives an interesting point of view. Although this article was also posted by another student in a previous course I also wanted to reference it because I kind of fell in love with Nic’s work and more specifically his blog and all he writes about; to me it just seems incredibly interesting and accurate. 
In ‘Understanding how a business plan is read’ Nic explores the difference between the venture capitalist and the entrepreneur in means of the writer and the reader. A thought he came up with after attending the BVCA conference. In Nic’s perspective, the reader, which in this case relates to the VC, usually has limited time to go thoroughly through a proposal due to the amount of business plans received every day, said in his words: “when I’m looking at a new business plan I’m rushed and my aim is to quickly work out whether it makes sense to meet the company behind the plan or whether we should politely let them know we are not interested”. Whereas in the case of the entrepreneur the scenario varies as they are trying to make THE impression so they can at least achieve a first meeting with a VC. So from the entrepreneur’s side a lot of time and effort are put into work when from the other side might not be ‘appreciated’ entirely since the VC’s read it quickly. So from this premise, Nic being a VC and understanding the other side of the coin, recommends the sections of a business plan that should be more explicit in order to drop in the list of future meetings:

•       Summary of product

•       Evidence of momentum – e.g. user traction or customers

•       Summary financials

•       Evidence of ambition

• Maybe a description of the market dynamics.

Another article I read that can complement the previous one is Tim Berry’s ‘What investors look for in a plan”. Tim berry is an entrepreneur, author and expert in business plan coaching. He is the president and founder of Palo Alto Software, bplans.com, and Borland International, and author of Business Plan Pro. He is also a speaker and a teacher. Berry shares that a venture capitalist usually is extra demanding because they use other people’s money to invest what makes them also be extra careful and leaving low limits of risk. Tim explains that for that reason when a VC searches or evaluates a business plan what they look for is:

•       A management team with a proven track record

•       A defensible product with a competitive advantage.

•       Reasonable valuation.

•       A clear statement of the investment offering

Another thing Berry considers important for a VC is “a clearly stated exit strategy”. Because according to his beliefs investors want to have evidence that the entrepreneur at least thought of how the investors will get their money back.