1. Business Plans for Technology Entrepreneurs Eric Cooper ecc@cmu.edu November 2001

2. Outline " Why write a business plan? " Who reads it? " How do they read it? " What should be in it? " Where can you get more help?

3. Why Write a Business Plan? " Clarify your business model and strategy " Identify and prioritize what you need to succeed " Plan ahead " Schedule resources efficiently " Explain the business to others...

4. Who Reads It? " You; your senior team; your advisors; your Board of Directors " Document your evolving strategy " Stay on the same page " Smooth management transitions

5. Who Reads It? " Investors " Employees " Strategic partners " Early customers

6. How Investors Read Plans " Kinds of private investors " family and friends " angels " venture capitalists " strategic investors (other companies) " Differing motivations!

7. How Investors Read Plans " Venture Capitalists are financial investors " The crux of all financial decisions: risk versus reward

8. Risks Technology riskWill the product work? Market riskWill people want to buy it? Competitive riskWill another company eat your lunch? Execution riskWill you screw up?

9. Rewards " Revenue growth " Profitability growth " Market share growth " Exit strategy " IPO (initial public offering) " acquisition

10. What Does a Plan Look Like? " Executive Summary (I read this second) " Company Description " Market " Competition " Operations " Management Team (I read this first) " Financial Projections

11. Executive Summary " The elevator pitch " What will you sell? " Who will buy it? " Why will they buy it from you? " How much money do you need?

12. Company Description " Product or service offering " Development status " Number of employees " Facilities " Summary financial status

13. The Market " Define your market narrowly and precisely " Don't project 1% of a zillion dollar market " Understand what consitutes a complete solution " Read Geoffrey Moore's Crossing the Chasm on the technology adoption life cycle

14. Competition " Who are the competitors? " What are their strengths and weaknesses? " What are your proprietary advantages and barriers to entry?

15. Operations " Engineering " Manufacturing " Marketing " Sales " Business Development " Finance and Administration

16. Management Team " Why will this team succeed? " Short bios, not full resumes " Emphasize relevant experience " It's OK if your team is incomplete

17. Financial Projections " Historical (if any) and pro forma " Income (profit & loss) statement " Balance sheet " Quarterly for three years is customary " Of course, this will usually be bogus

18. Financial Projections " How long will this round of cash last? " How much cash is needed to reach key milestones? " product demo " product revenue " break even point

19. Resources " Other entrepreneurs " Pittsburgh Technology Council " EnterPrize competition " www.phtc.org " Entrepreneurship center in GSIA " www.sba.gov/starting " Random web pages

20. Questions & Answers