Q: What are venture capitalists looking for in a business plan? Are they looking for a short memo with a small demo or a more detailed plan that covers every aspect of the business in detail? How do you choose a venture capitalist? I'd also like to know if you're aware of any entrepreneurial gatherings or conferences in the Boston area.
A: Venture capitalists want to know you've thought your business through in detail. You'll need to convince them that you have a large opportunity (market size), a product that meets a real need and a team that can deliver the product and win against the competition. You need to establish that in roughly 25 pages or less. Less is better.
Choose a venture capital firm for the non-tangibles it brings to the table. Are they people you would want to work with? Can they help you as you grow and need resources? Especially these days, with all the novices getting into venture capital, it's important to do due diligence on your venture capitalists and make sure they're good businesspeople as well as sources of cash.
There are lots of entrepreneurial events in Boston. The Cambridge Business Development Center is one. Harvard and MIT business schools have lots of entrepreneurial events, as does Babson. Boston University has the Photonics Center, which is actually a center for entrepreneurship. Later this year, Red Herring magazine is having Venture Market East, which is a large gathering of "new economy" entrepreneurs and venture capitalists. There's also the Route 128 Venture Capital Breakfasts as well as the MIT Enterprise Forum.
As an entrepreneur, technologist, advisor and coach, Stever Robbins seeks out and identifies high-potential start-ups to help them develop the skills, attitudes and capabilities they need to succeed. He has been involved with start-up companies since 1978 and is currently an investor or advisor to several technology and Internet companies including ZEFER Corp., University Access Inc., RenalTech, Crimson Soutions and PrimeSource. He has been using the Internet since 1977, was a co-founder of FTP Software in 1986, and worked on the design team of Harvard Business School's "Foundations" program. Stever holds an MBA from Harvard Business School and a computer science degree from MIT. His Web site is a http://www.venturecoach.com.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.