If I have a good idea but not a business plan, and if I do not feel that I am qualified to devise a good business plan, is it okay to pitch my idea to investors with the notion that the business plan could be developed after the seed funding is received?

Question:
If I have a good idea but not a business plan, and if I do not feel that I am qualified to devise a good business plan, is it okay to pitch my idea to investors with the notion that the business plan could be developed after the seed funding is received?

Answer:
It depends on how much you need and what for.  Give us the answer to this and we'll be able to help more.

It depends on how much you need and what for.


Unless you have a patent, you need to finish a business plan before investors will even give you the time of day.  And if you do have a patent, you need to finish a business plan so investors will take you seriously.

You propose what you want in your business plan and investors will decide what you get.  You don't like what they offer, you don't have to take their money.


Too many factors determine this and you haven't given any real information for even a speculative answer to either of these questions.

CEO is at the absolute top of the corporate power structure. President is another title for such a position.  However, when one is titled president and another is titled CEO, the president answers to the CEO.  How a person can hold both titles is because the CEO can hold any other title they want. Usually it means these titles were held by different persons and now one holds both.

Very carefully. There aren't any rules. The valuation you establish for the company will be arbitrary. Obviously, the further you are in prototyping (proving the business model) and the stronger your management team, the more leverage you'll have in arguing for a higher valuation. You would do well to have someone experienced in such matters at your side or at least mentoring you.

Depends if the seed investor is your dad or your CEO. I don't know that there is a typical seed investor.

Well, the latest issue of Business 2.0 counsels not to bother writing a business plan because nobody reads them. My experience suggests that's probably true in the sense that few sit down and wade through 60 pages of marketing blather and pipe dream financial projections. But you will need something to show the investors that demonstrates the brilliance of your idea, the depths to which you've thought it through, and the validity of the revenue model.

Yes, put it in the business plan. Your plan should include a "use of funds" section which will outline your personnel outlay.

 

 


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