Remember that adage about the best start-up ideas being scribbled on a napkin? Turns out there may be some truth to that adage. Or, at least, the fact that brevity STILL is the soul of wit.
There's a new blog up on the Bizcovering Web site about why spending lots of time and money on a business plan might not be the best way to get a new company off the ground. The blog (written by a contributor named "Sinomaster" who is a senior partner at Sino Management Partners) points out that most venture capital portfolio investments were not signed by virtue of a business plan submitted for consideration. Indeed, my guess is that a completed business plan would suggest to a VC that he or she might not be able to have the level of control necessary to make their investment worthwhile. The plan might come later.
"Sinomaster" writes that the best plans really start as executive summaries that prove out your idea. The shorter the better. After all, how likely are YOU to read a 100-page document? Plus, if you really ARE looking for outside money, you're going to have to rewrite it anyway. Concentrate on a compelling, well-written essay that sets up your start-up.
Here are two other tips from Sinomaster that made a whole lot of sense to me:
- Don't number your cover sheet. Make the recipient of your executive summary feel like one of the privileged few to read it.
- Ask for input on your "incomplete" plan.
Here's the complete blog, I encourage you to read it to gauge whether you or your team are guilty of the habits he cautions against.