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1. | Should Entrepreneurs Hire Entrepreneurs?
In his book, Gerber discusses that an entrepreneur encompasses three roles, which are: the technician, the manager, and the visionary. As a technician, the entrepreneur is able to perform the core tasks that the business performs such as baking a cake or ...
[Added: 01 Mar 2006 Hits: 369 Words: 308]
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2. | Pre-Money vs. Post-Money Valuation
When a company decides that it must raise capital, a key question that must be answered is how much the company is worth. For example, if the business needs $500,000 to get started and/or grow, how much of the equity in that company should $500,000 ...
[Added: 03 Dec 2005 Hits: 250 Words: 333]
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3. | Answering "Why You, Why Now" - A Critical Component of a Winning Business Plan
Business plans continue to be an essential element of the capital-raising process. They must convince investors to take notice - investors that are shrewder today due to the ups-and-downs they have experienced over the past few years.
Adding to the financing challenge is the plethora ...
[Added: 03 Dec 2005 Hits: 278 Words: 317]
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4. | Finding a Venture Capital Firm
Many ventures are faced with the challenging task of raising venture capital. The first part of this process is finding the right venture capital firm (VC). While this may seem simple, it isn't. There are thousands of venture capital firms in the United States alone, and going after ...
[Added: 23 Nov 2005 Hits: 280 Words: 467]
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5. | Describing Intellectual Property in Your Business Plan
Most companies that are worthy of raising venture capital have proprietary Intellectual Property (IP). In fact, the quality of the IP and the management team are often the two most important aspects of a venture capitalist's investment decision. The challenge that many ventures face, however, is that most investors will ...
[Added: 23 Nov 2005 Hits: 296 Words: 649]
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6. | The Marketing Plan and the Four P's
The Marketing Plan section of the business plan demonstrates how a company will penetrate the market with its products and services. The Marketing Plan should include "the four P's" – Product, Promotions, Price, and Place.
Products and/or Services
The first "P" stands for Product, ...
[Added: 07 Nov 2005 Hits: 263 Words: 546]
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7. | Developing Realistic Financial Assumptions in Your Business Plan
Many investors skip straight to the financial section of the business plan. It is critical that the assumptions and projections in this section be realistic. Plans that show penetration, operating margin and revenues per employee figures that are poorly reasoned, internally inconsistent or simply unrealistic greatly damage the credibility ...
[Added: 07 Nov 2005 Hits: 335 Words: 315]
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8. | Venture Capital Negotiating Issues
When companies enter into negotiations with venture capital firms, there are several issues which need to be defined and agreed upon. This article describes the key issues.
Valuation. Valuation is the most prominent negotiating issues. Valuation is the price of the ...
[Added: 25 Oct 2005 Hits: 222 Words: 506]
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9. | Documenting the Exit Strategy in Your Business Plan
All investors greatly desire and are motivated by a clear picture of a company's exit strategy, or the timing and method through which they can "cash in" on their investment. This picture best comes into focus ...
[Added: 25 Oct 2005 Hits: 218 Words: 321]
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10. | Issuing Warrants to Investors
When raising capital for a business venture, warrants are a common form of equity that is given to investors. A warrant is like an option - it gives the holder the right to buy a security at a fixed or formulaic price, ...
[Added: 12 Oct 2005 Hits: 232 Words: 329]
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11. | Alternative Venture Finance: Federal Grants and Loans
While most companies seeking venture capital initially think about angel investors and venture capitalists, a large alternative source of financing is federal grants and loans. The two largest federal grant programs are run by the Small Business Administration (SBA), and by ...
[Added: 12 Oct 2005 Hits: 227 Words: 333]
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12. | How to Size an Emerging Market in Your Business Plan
In developing their business plans, companies of all sizes face the challenge of determining the size of their markets. To begin, companies must present the size of their "relevant market" in their plans. The relevant market equals the company's sales if it were to capture 100% of its ...
[Added: 12 Oct 2005 Hits: 232 Words: 663]
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13. | Documenting Partnerships in Your Business Plan
Forging partnerships to improve market penetration has become commonplace, particularly for "new economy" businesses. And, most companies proudly mention their many partnerships in their business plans.
The fact is that, regardless of whom the partnership is with, partnerships by themselves are meaningless. What are meaningful are ...
[Added: 26 Sep 2005 Hits: 231 Words: 312]
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14. | How to Use Graphs and Charts in Your Business Plan
Many people ask how many graphs or charts they should have in their business plans. As with most other business planning questions, the answer is "it depends." This article discusses the key factors influencing the number of graphs ...
[Added: 26 Sep 2005 Hits: 236 Words: 558]
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15. | The Term Sheet's Role in Raising Venture Capital
Entrepreneurs and companies who are seeking venture capital often negotiate with one or more venture capital firms on a number of important issues. These issues include the amount of capital to be raised, the investment terms, etc. The document which summarizes these terms is known as a "term ...
[Added: 25 Aug 2005 Hits: 205 Words: 347]
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16. | Raising Capital for Your Business - How Long Does it Take?
Most companies vastly underestimate the time commitment necessary to successfully complete a financing. In actuality, a company seeking financing needs to budget between 500 to 1000 work-hours to the capital-raising process, spread out over a 6-9 month ...
[Added: 25 Aug 2005 Hits: 189 Words: 435]
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17. | Two Types of Business Plan Executive Summaries
Companies seeking capital often ask how long the Executive Summary of their business plan should be. The answer depends upon the use of the summary, mainly determining if 1) it precedes the full business plan, or 2) it will be used as a stand-alone document.
...
[Added: 25 Aug 2005 Hits: 194 Words: 395]
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18. | In Business Planning, Competition is Good
When developing the competition section of your business plan, companies must define competition correctly, select the appropriate competitors to analyze, and explain its competitive advantages.
To start, companies must align their definition of competition with investors. Investors define competition as any service or product that a ...
[Added: 19 Aug 2005 Hits: 216 Words: 405]
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19. | Analyzing Customers in Your Business Plan
The Customer Analysis section of the business plan assesses the customer segments that the company serves. In it, the company must 1) identify its target customers, 2) convey the needs of these customers, and 3) show how its products and services satisfy these needs.
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[Added: 12 Aug 2005 Hits: 183 Words: 435]
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20. | The Ideal Length of Your Business Plan
How long should a business plan be? A business plan needs to be whatever length is required to excite the investor, prove that management truly understands the market, and detail the execution strategy. From surveys of investor needs, Growthink has found that 15 to 25 pages ...
[Added: 03 Aug 2005 Hits: 181 Words: 448]
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21. | The Management Team Section of the Business Plan - Don't Just Include Resumes
Even the best new concept or existing plan will fail if executed poorly. The Management Team section of the business plan must prove to the investor why the key company personnel are "eminently qualified" to execute on the business model.
The Management Team section ...
[Added: 01 Aug 2005 Hits: 227 Words: 357]
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22. | Angel Investors: Who They Are & When Are They Appropriate
Angel investors are individuals who invest in emerging business ventures. Angels typically provide both capital and know-how to companies who are in either their start-up or expansion phases. To reflect the increased risk of investing in such firms, angels seek a higher rate of return versus ...
[Added: 06 Jul 2005 Hits: 186 Words: 225]
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