Title PageName of company, date, contact information, etc. Table of Contents Executive Summary Business Concept Company Market Potential Management Team Distinct Competencies Required Funding and its Use Exit Strategy Main Sections I.  Company Description Mission Statement Summary of Activity to Date Current Stage of Development Competencies Product or Service Description Benefits to customer Differences from current offerings Objectives Keys to Success Location and Facilities II.  Industry Analysis Entry Barriers Supply and Distribution Technological Factors Seasonality Economic Influences Regulatory Issues III.  Market Analysis Definition of Overall Market Market Size and Growth Market Trends Market Segments Targeted Segments Customer Characteristics Customer Needs Purchasing Decision Process Product Positioning IV.  Competition Profiles of Primary Competitors Competitors’ Products/Services & Market Share Competitive Evaluation of Product Distinct Competitive Advantage Competitive Weaknesses Future Competitors V.  Marketing and Sales Products Offered Pricing Distribution Promotion Advertising and Publicity Trade Shows Partnerships Discounts and Incentives Sales Force Sales Forecasts VI.  Operations Product Development Development Team Development Costs Development Risks Manufacturing (if applicable) Production Processes Production Equipment Quality Assurance Administration Key Suppliers Product / Service Delivery Customer Service and Support Human Resource Plan Facilities VII.  Management and Organization Management Team Open Positions Board of Directors Key Personnel Organizational Chart VIII.  Capitalization and Structure Legal Structure of Company Present Equity…

A new business requires resources such as funds for R&D, equipment, marketing, and inventory. These funds are obtained by attracting stakeholders. Financial stakeholders are most at risk – these include banks, bond holders, investors, and venture capital firms. However, employees, customers, and suppliers of a business also are at risk. Employees may not receive some of their pay if the business fails, and they may have given up lucrative positions to which they no longer can return. Customers may find that they are stuck with a non-supported product, and suppliers may lose the opportunity to recoup their development costs or to receive their accounts receivable. Because of the risk of failure, attracting stakeholders is more difficult for a new venture than for an established, successful company. Minimizing Downside Exposure One way to make a new venture more attractive to potential stakeholders is to minimize their downside exposure to the fullest extent possible. For example, non-transferable R&D costs can be reduced by using off-the-shelf technology wherever possible. Investment in capital equipment can be made somewhat reversible by using more general machines that can be used for other purposes, thereby enhancing their liquidation value. The initial marketing expenditures can be reduced by…

Some Tips for Success Acquiring venture capital funding can consume a large amount of valuable time and effort. Here are a few tips that can help you secure funding and get on with the process of building your company. Choose the Right VC Carefully research your potential investors. Learn about their focus areas and their philosophy. Then, go to venture capitalists who have financed firms similar to your own; they will understand what you are saying. Some VC’s are very hands-off, whereas others regularly become quite involved with the operations of their portfolio companies. Be sure to talk to those that more closely match your needs. Once you have identified a good match, be sure to talk to the right person within the firm. For example, if your idea is in the realm of medical technology, be sure that you are speaking to those people in the VC firm. Business Plan A VC likely will spend only a few minutes looking through your business plan. Illustrate concepts using diagrams so that one does not have to read the plan to figure it out. Assume that the VC will not read the entire plan, because he/she probably won’t read it. A…

When dealing with the press, it is important to realize that the outcome will not necessarily be like you think it should be. Rather than controlling the press, it is better to think in terms of managing it. The following covers some basics and serves as a primer on managing the press. Know With Whom You Are Dealing If you are contacted by a reporter, the reporter should identify herself and the organization that she is representing. Be sure to have a clear understanding of which media you are dealing with, i.e. a trade publication, newspaper, or television. Provide responses that the reporter will understand. For example, a Wall Street Journal reporter probably will have a better understanding of business issues than will a smaller town newspaper reporter, so be sure to tailor your responses accordingly. Also consider who will be the ultimate audience. Building the Relationship Your relationship with reporters is very important and is the basis of your interaction with the media. These relationships take time to develop, and this time should be viewed as a long-term investment. If you are heading a start-up company that has not established a relationship with the local press, read the local…

  Innovation and entrepreneurship are at the heart of “creative destruction”. In his book, Open Innovation, Henry Chesbrough describes a new paradigm of open innovation that is in contrast to the traditional closed model. To understand open innovation, it is worthwhile to review the older model of closed innovation.   The Closed Innovation Model Under the concept of innovation that prevailed during most of the 20th century, companies attained competitive advantage by funding large research laboratories that developed technologies that formed the basis of new products that commanded high profit margins that then could be plowed back into research. This vertical integration of the research function meant that firms that could not afford such research were at a disadvantage. The vertically integrated concept of the research and development pipeline is depicted in the following diagram:   Closed Innovation Concept   In the above diagram, the red lines represent completed research projects, some of which may have resulted in patents, but that never made it to development. This often is the situation if the innovation is not useful to the company’s core business. Such completed research projects often are shelved until a market opportunity arises to use them, if such an…