The spectrum of describing your business

There are times when you will need to explain what your start-up does in full detail, and times when all you get to provide is what will fit on a bumper sticker.  So, here's my shot at the entire spectrum of forms that explain your business, from longest, to shortest:

1)  Full written business plan (some start-ups don't do this anymore)
2)  Business plan presentation (your presentation slide deck...sometimes a proxy for a written business plan)
3)  Executive summary (1-2 pages, typically the first section in your business plan)
4)  Elevator pitch (explain your business in 3-5 minutes)
5)  Mission statement (1-3 sentences that describe your company's purpose)
6)  Bumper Sticker (up to five words that describe what your company does)

So, as you move forward with your start-up, have each of these ready for whenever you need them.  Who knows, your next customer or next investor might be sharing an elevator ride with you tomorrow.

I have to write a business plan...where do I start?

Comprehensive advice on writing a business plan requires much more space than a typical blog post can provide, and there are those who even question the necessity of a true, 70-page business plan.  Today, many business plans just take the form of a slide deck (e.g., PowerPoint presentation).  But, how does one even get started?

First, identify the Problem you're trying to solve.  Don't provide your solution yet, but clearly state the problem, and the magnitude of it.

Next, provide the consequences of the Problem.  What is the current outcome of the Problem?  Again, make sure this is quantified.

Next, state your Solution.  Make sure your Solution is disruptive and revolutionary.  Just making something a little better isn't going to fly with investors.  They are looking for home runs, and you need disruptive solutions to hit home runs.

Next, state the consequences of your Solution.  And quantify this.

Once you've done the above steps, you have a great foundation for your business plan and executive summary.  Then you can go on to address the other essential topics in the business plan (market, management, competition, financials, etc.).

Angel investing is changing...does your company still look attractive?

A number of my fellow angel investors and I are finding that the "angel model" of investing just doesn't work in many cases.  We come in at an early stage, and if the company needs multiple rounds of VC investment, we are vulnerable to getting squashed...diluted to nothing, or at least watered down to the point that the return just isn't nearly what it should have been once subsequent investment "preferences," etc., are honored.  So, to make your company attractive, you either need to convince your angel-level investors that a) there really will be a significant step-up in valuation before the next round, b) there will be at most one more round of angel or VC investment after this one (this includes A-1, A-2, etc., rounds), and/or c) you really will reach profitability or cash flow break-even with the money you're raising.  Are you still an attractive angel investment?