Venture Capitalists are very protective of their time. Their first step is to listen to a concise summary of your business proposition delivered in the notorious elevator pitch. Articulate a concise and compelling summary that would motivate the VC to listen to your story. Deliver it in 3 sentences within 60 seconds.

If a venture firm and all goes well, they will provide you funding for growth in return for an equity share in the business, often a controlling share. At one point, they will ask you for a business plan.

Venture investors do not want to see the same plan that you might write as an operating guide to building the business.. Venture investors are very straightforward in what they want to learn from a business plan:

1. What is the investment proposition?
2. Do you have a convincing plan for business growth?
3. Can the management team execute the plan?

Investment Proposition: Remember the distinction between your focus and that of the VC. Your primary concern is business; the VC’s primary concern is money. You want to succeed at launching and building the business of your dreams. The VC wants to invest money and extract multiple gains. To the VC, your business is a means to his end. In your business plan you must define the investment proposition by answering three questions:

1. How much money are you seeking?
2. What are you offering in return?
3. What are the exit options for the VC?

Be very clear and sure about how much funding you are raising. This number should tie into your business plan projects. How do you intend to use the money and over what timeframe? Usually businesses seeking early stage capital will have to offer a significant share of the business in return. VCs will frequently want in excess of 50% of the company. When can the investors expect to cash in their investments and how?

Growth Plan: What is your business model? What kind of growth do you expect, how will it be achieved, how will funds be applied, and what are the expected results of each investment subproject? Two very important questions to address are: how will the business be scaled for growth and how will the pacing and timing of expenditures and revenue impact cash flow and profitability? For a business to rapidly expand by 5 or 10 times, management controls and systems must be put in place. The infrastructure of the company must be able to support and control rapid growth.

Management Execution: Identify the management team and demonstrate that they are the right team to execute. As a company grows, the skills and management practices required change. The VC will want to explore whether the current management team has a growth vision and the execution skills to actualize the investment proposition. No matter how brief, view every interaction as an opportunity to demonstrate command and mastery of the knowledge and skills your investors are seeking.
You would be well served to address the above questions in a concise and clear investment summary of 2 to 4 pages as the first part of your plan. Speak directly to your VC keeping your sentences simple and to the point.

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