Add value to your business plan

When deciding to start-up a company, you need to firstly have a business idea which to transpose into a business plan. Although there are numerous entrepreneurs who believe that writing a business plan is just a waste of time, opinion which is based on a lack of knowledge, you should know that a business plan is a useful tool from numerous points of view. First of all, this will help you discover which are the problems your company may be confronted with, it may help you think about some of the difficult aspects you would have neglected otherwise, but, most important, it will help you raise external capital.

A great way of adding value to your business plan is by writing it yourself as this will give you the opportunity of confronting all the major issues a business plan deals with. This will provide clarity and a great over view. The thing that scares most of the entrepreneurs out there is the fact that writing a business plan can be a task that would take months. This is not true. If using a professional business plan template, you can easily finish your business plan in less than a day.

Just remember that not hiring a professional writer for putting together your business plan is a great way of adding value to your business plan and, finally, to your company as it is the business plan that will help you raise external capital.

What Can you Do with a List of Investors?

Dear entrepreneur,

If all you need now is funding for your business and what you have there in front of you is a comprehensive list of investors, what do you do with it?

Hopefully you don’t plan to send an email to all of them, using the “send-to-all” function. What I mean is, you are not going to use a standard text for all your teaser emails, are you?

Again, hopefully you don’t intend to contact the whole list and send them your business plan. There may be hundreds to thousands of business investors there, including angel investors, venture capitalists, private equity firms…Are you planning to write a customized teaser e-mail that you are going to send to all these people and firms? In other words, are you going to spend the following months focusing entirely on this activity? What about the other aspects of your business? Or you may be planning to hire somebody in order to fulfill this task?

So, how can this problem be solved?

Well, first of all, you should consider some selection criteria in order to customize your list of investors. What are these criteria? The most important thing when you start looking for capital is to select suitable venture capital firms or angel investors that may fund your venture. This selection will be made taking into account the investors’ preferences for different geographic locations, stages of a company’s development and business industry. If you can also have access to the minimum and maximum amount of capital that your prospective business partners usually invest, then you have surely increased your chances of getting funded.

If your customized list of investors contains only those individuals or firms that match your company’s funding needs, stage and location, you will not only target the right capital providers, but you will also benefit from their expertise and assistance.
Choose wisely and when you send them the teaser email, make sure that it sounds convincing and that it highlights why you are uniquely qualified to succeed.

When Do I Need International Investors?

There are countries that lack the variety of business investors that you can find, for example, in the US, Canada or the UK. What should an entrepreneur do in this case? Having learnt their lesson, that is, to always consider investors’geographic location and preference, in order to increase the chances of getting funded and of receiving management assistance from those investors, business owners may be at a loss. This uncertainty can only make one postpone or even give up their dreams of building a successful company. So, what is the solution?

Well, for entrepreneurs based in those countries where the number of local investors is quite limited the solution is to contact international investors. There are angels, venture capitalists and private equity firms that actually fund overseas businesses. The condition is that those enterprises prove to have high chances of a very promising ROI. It is the main factor that would convince an international investor provide money to a company that is located in another country. Moreover, if the respective private investor or firm has experience with companies in the same business field, they can also provide assistance and guidance whenever necessary.

So, if you are located in a developing country with few investors but with a great economic potential, international investors are an excellent alternative source of capital. All you need to do is have a detailed business plan, a great executive summary and an updated investors software that would allow you select and contact the suitable investors. The process of business planning is as important as writing the teaser email or preparing the pitch. Every little detail matters as long as it shows your business is worth the funding.

I Need an Angel Investor. How Do I Make My Choice?

You are ready to turn your business project into a real venture. You have a certain amount of money from your savings, as well as from family and friends, but you still need more capital to get things going. Bank loans are impossible to obtain at this stage, as the risk of failing is too high, the only alternative you have are private investors.

Am I Eligible?

Angels invest in start-ups with a very promising ROI. Is your business eligible? If you have a very clear vision of the process, you are able to make pertinent financial projections and are also a skilled presenter, capable of persuading prospective business partners to provide you their money, you may be very close to getting funded. But being “very close” does not necessarily mean being “there” and most investors stumble before getting what they want for unsure reasons.

Where Do I Search?

One of the reasons that cause a stressful delay in raising funds is connected to the disorganized manner in which investors are (not) selected and contacted. If you have some acquaintances that could refer you to some angels, and referrals are very appreciated in this case, you may still not obtain the money. It is not that your idea is uninteresting, your business plan needs to be revised or you lack public speaking abilities. The problem is that the selected investors may have no experience in your field and they’d rather not risk putting their money into something they don’t sufficiently understand.

What Are the Selection Criteria?

What you need to do is organize your list of investors, so that they perfectly match your company, considering the following criteria: stage preference (and most angels invest in start-ups, only some of them being also interested in follow-on investments), industry preference, amount of money they usually provide, proven track of success with other funded ventures. The more familiar with your activity sector they are,the more domain knowledge they have, the more benefits you will have regarding management assistance and advice in difficult situations.

The choices you make in the start-up phase will later influence the success rate of your business, so remember to choose wisely and keep the gates open for new rounds of investment.

Funding Sources For Early Stage Companies - Hub Angels

Who Are Hub Angels?

In 2000 the group was an organized club with 15 individuals. Since then, it has evolved to a group of limited partners investing through angel funds. Hub Angels have invested over $12 million in a wide range of sectors, such as biotech, financial services, healthcare and software.

Fund III consists of $3.5M of capital and 35 members and provides capital to seed and early stage companies based in the New England States, with a preference mainly for Series A rounds. As a base investment the fund typically provides $250,000, with an additional amount of $250,000 coming from its Members. Some of the VC firms having co-invested in Hub’s companies include Commonwealth Capital, Intel Capital, and GE Capital. Companies in Hub’s portfolio: Zipcar, Flexplay, Seahorce Bioscience, Intelligent Bio-Systems.

Recent Investment - $1.9 Million in Series A Funding for Copiun

Copiun is a provider of corporate endpoint management solutions , based in Marlborough, Massachusetts. On September 1, 2010 it secured 1.9 million in series A funding from Hub Angels and RRE Ventures and the money will be used to expand customer acquisition and market adoption. Copiun Data Manager 2.0 is the latest version of its corporate solution. The main features that ensure the company high chances of becoming a market leader in this market are native end user experience, object based deduplication and federated search capabilities.

How Can Your Company Benefit From Angel Funds?

If you need capital for your start-up and you cannot obtain a bank loan, angel investors are the best funding alternative. The advantage is that they also provide management advice and expertise, helping you along the difficult business process. What you need is an innovative idea, a good business plan, an executive summary and a skilled presenter, able to convince angels that your business is worth investing, with great ROI perspectives. If you lack contacts that can refer you to business investors, you have the option of using an angel investors directory, that would allow you select the ones suitable for your venture’s development stage, industry and geographic location.

Business Investors - Draper Triangle Ventures

Draper Triangle Ventures is the Midwest-based Network Partner of Draper Fisher Jurvetson. As industry preference – they usually fund high-tech start-up companies with high market potential and, regarding stage preference, they provide seed and early-stage capital. Globally, the DFJ Global Network Partner Funds comprise more than 140 VC professionals, in over 30 US, European, Asian, Israel, Russian and South American cities. There are more than 600 portfolio companies that have been funded and over $6 billion of capital under their management. Here are the most recent investments made this year.

1. ClearCount Medical Solutions

At the end of August 2010 Draper Triangle Ventures Invested $5Million in ClearCount Medical Solutions, a patient safety solutions innovator. The close of series B financing round brings the company funds for research and development, as well as for market penetration. What ClearCount provides are RFID chips to count and track surgical sponges. The benefit for patients is preventing surgeons from leaving sponges within their bodies during intra-abdominal surgical procedures, such quite frequent incidents leading to severe infections. What do the products ensure to hospitals? A better reputation at a rapid rate of ROI.

2. Co-eXprise Inc.

Co-eXprise is a developer of supply chain software, based in Wexford. In February 2010 it raised more than $2 million from Draper Triangle Ventures. It was the first time when the company used funds from an institutional investor. In the past Co-eXprise assisted firms that purchased commodities such as gas and electricity. Later it started to develop software that helps clients find supplier matched for their supply chains. The funds have been used to hire sales and marketing staff that would support Asian and European opportunities, to increase local employment and to push sales.

3. Landslide CRM

Landslide is a a leader in innovative salesforce solutions software. In January 2010 it secured $8 million in growth capital. Draper Triangle Ventures were included in the financing round,among other business investors. The aim was an increase in staff in order to expand its brand and marketing presence in Pittsburgh and Boston. Landslide have expanded their second generation CRM (customer relationship management) product, allowing organizations to define their sales process, combining the sales process with innovative sales performance technology.

International Investors in South Africa

The opportunity to make significant investments in the South African market has been considered by more and more private investors in recent years. With international angels, as well as South African investors, the country has a lot of potential for investments that bring high returns. What were some of the key deals of the past month from which South Africa’s development will benefit?

Rail Pact with China

The agreement signed in August 2010 aims at promoting trade and investment in rail projects and finding new approaches for the consolidation of the transport sector, China being the largest high-speed rail network operator in the world. China is willing to share expertise with South Africa, as it has great specialists in developing and upgrading highland rail, networks and maintainance. Research institutions and private organizations with the technical and financial resources to implement specific projects will be identified and contacted. Another mutual benefit will be the exchange of professionals such as engineers in the field of intelligent transport fields.

Russian Uranium Supply

The agreement signed by Jacob Zuma and Dmitry Medvedev states that South African nuclear power stations will be supplied with uranium starting with 2011. South Africa has been long considered an important investment destination due to its natural resources. Besides uranium, Russia will also provide technological support, also considering the option of building its own plants. This deal represents the first important step in further consolidating and enhancing bilateral relations, as the Russian business delegation members also represented sectors such as engineering, energy, logistics, infrastructures or aerospace.

Some of the advantages, foreign investors are aware of when they decide to put their money into South African projects are the resource-rich region and the tax regime, in line with global tax systems, Entrepreneurs willing to start a new business there and looking for investors should, however, consider the option of first contacting investors in South Africa, to be able to benefit from permanent management assistance, besides business capital.