The Top 3 Things VCs Look for in Your Business Plan

A business plan is essential to secure funding. You can have the best elevator pitch, but VCs want to see more before they decide that your startup is a viable idea. In order to attract VCs you should focus on the following 3 sections while writing your business plan.

Define your Audience

Many great ideas fail when there are too few customers and when the founders neglect to properly define their audience. You should take the time to research your audience and determine a realistic number of potential customers. VCs are looking to invest in profitable ventures; your business should offer a solution to a problem shared by many individuals. Once you have clearly defined your target market, make sure you have chosen the most profitable and relevant customer segment.

Present your Team

Entrepreneurship is all about execution. The VCs have to believe in your team; they won’t invest in a good idea if they suspect it will be poorly executed. Showcase your team and the diverse skills complementing the idea at hand. Use this section to answer the questions such as “Why you?” “What can your team bring to the table that no one else can?”

Outline an Exit Strategy

At the end of the day VCs are just out there to make money. Assure your investors that the money will be paid back. Outline the specific timeline and resources allocated for the payment. VCs is are extremely risk-averse and prefer to cash out quickly with the highest possible return.

A clearly defined audience, a strong team, and a realistic exit strategy will benefit you greatly and improve your odds of securing an investment.

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