Most companies that are worthy of raising venture capital have proprietary Intellectual Property (IP). In fact, the quality of the IP and the management team are often the two most important aspects of a venture capitalist's investment decision. The challenge that many ventures face, however, is that most investors will not sign non-disclosure agreements (NDAs), and NDAs are critical to maintaining the proprietary nature of the IP. This article details the appropriate strategy for addressing proprietary IP in your business plan in order to attract investor attention while retaining the confidentiality of your inventions.
Focus on the Benefits of and Applications of the IP: The business plan should not discuss the confidential aspects of the IP. Rather, the plan should discuss the benefits of the IP. Remember that even the most amazing of technologies will not excite investors unless it has tangible benefits to customers.
The business plan first needs to discuss the products and services into which the IP will be integrated. It then must detail the benefits that these products and services have to customers and differentiate them from competitive products. When applicable, it is helpful to include non-confidential drawings and backup materials of the products and services in the Appendix.
Focus on Customer Needs and the Relevant Market Size: The business plan must also discuss how the benefits of the IP fulfill a large customer need. To accomplish this, the plan needs to detail customer wants and needs and prove that the company's offerings specifically meet these needs.
Secondly, the plan needs to discuss the marketplace in which the IP is offered and the size of this marketplace. Critical to this analysis is determining the relevant market size. The relevant market size equals a company's sales if it were to capture 100% of its specific niche of the market. For example, a medical device's market size would not be the trillion dollar healthcare market, but rather the sales of all competing medical devices.
Focus on Competition and Competitive Differentiation: Your business plan must also prove that your IP is better than competitive inventions. In identifying competitors, note that listing no or few competitors has a negative connotation. It implies that there may not be a large enough customer need to support the company's products and/or services. On the other hand, should there be too many competitors, then the market may be too saturated to support the profitability of a new entrant. The answer -- any company that also serves the customer needs that you serve should be considered a competitor.
The business plan should detail both the positive and negative aspects of competitors' IP and products/services and validate that your offerings are either superior in general, or are superior in serving a specific customer niche.
Prove that you can Execute on the Opportunity: As importantly as proving the quality of the IP and that a vast market exists for its applications, the business plan most prove that the company can successfully execute on the opportunity.
The plan should detail the company's past accomplishments, including descriptions and dates when prior funding rounds were received, products and services were launched, revenue milestones were reached, key partnerships were executed, etc.
When a company is a complete start-up, and no milestones have been accomplished, the plan should focus on past accomplishments of the management team as an indicator of the company's ability to execute successfully.
Results: Getting Investors to Sign the NDA: If you are able to convince the prospective investor that the IP is integrated into a product/service which yields real customer benefits in a large market, then the investor will take the quality of the invention for granted when reviewing the plan. Later, during the due diligence process, the investor will review the actual technology. At this point, a discussion regarding signing an NDA would be appropriate.
Since its inception, growthink business plans has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share. Growthink has become the firm of choice for venture capital firms, angel investors, corporations and entrepreneurs in the know. For more information please visit growthink business plans
Barrington South Lincoln Stretch rentals .. Lockport Chicago limo O’HareNo "meme" isn't a typo and Got Milk, the more... Read More
Every new business owner knows that a business plan is... Read More
In today's rapidly changing and highly competitive markets, many privately... Read More
Note to Northwest Airlines ? It's not about fuel costsFor... Read More
Diversify - to make diverse, give variety, to balance, to... Read More
GETTING STARTED WITH SUCCESSION PLANNING: PART IA survey of 4,300... Read More
More than $117 billion passed hands from Internet shoppers to... Read More
Microsoft Great Plains, former Great Plains Dynamics is excellent fit... Read More
Imagine an office without a desk, or lights, a computer,... Read More
This will make some people angry as hell, but it's... Read More
Does the competition drive you crazy?Are they relentless about taking... Read More
The trick is to determine what uniquely identifies your best... Read More
Regroup?is this a new management trend? Not a chance! Regroup... Read More
To stop a computer virus you must understand how it... Read More
If you are in the parking business and own or... Read More
( * - the word 'product' can be substituted to... Read More
1. Largest Selection -One way that you can make your... Read More
Writing a business plan is no easy task, sure you... Read More
Private equity firms have raised so much capital over the... Read More
Writing a business plan is not an easy endeavor, nor... Read More
When developing the competition section of your business plan, companies... Read More
Possibly THE most frequently asked question of me is "What... Read More
There is so much small business information available today that... Read More
The Accountability/Alignment Process: Three Steps to an Accountable Organization Generating... Read More
ACTION PLANNING: Action Planning is a process to develop strategies... Read More
Downers Grove limo Chicago ..Although North Americans were the dominant population on the Internet,... Read More
Microsoft Great Plains fits multiple services market niche and healthcare... Read More
Microsoft Great Plains does wonderful ERP job for horizontal markets... Read More
If you own a mobile franchise business and wish to... Read More
More than $117 billion passed hands from Internet shoppers to... Read More
A piano tuner recently moved to Buffalo, NY, and would... Read More
Many of us are discouraged by the networking events that... Read More
If ever there were an industry where we want zero... Read More
I am surprised how few sales professionals, independent consultants, and... Read More
The new check cashing instant clearing will take some time... Read More
A focus group is a group of employees or current... Read More
In today's rapidly changing and highly competitive markets, many privately... Read More
A menu is the foundation of any restaurant; Guests will... Read More
If you're a solo professional like I am, you know... Read More
If you are in the parking business and own or... Read More
In Ohio: besides the 3-Cs you should look at Akron,... Read More
So what makes a vision successful? Everyday companies try to... Read More
Q: A key investor in my business has suggested that... Read More
If you own a mobile car wash business or auto... Read More
Part 1A few weeks ago I attended a seminar sponsored... Read More
Do you work in or own a business that's affected... Read More
"Rubbish!" shouted the large, aggressive man in the red-striped shirt... Read More
Many of Ohio's downtown areas are in need of upgrading... Read More
With a heightened awareness of opportunity, ideas can often be... Read More
The boom of the dot-com era in 1999 brought the... Read More
Strategic Planning |