Improve Business Plan 'To Get Funds'
The advice follows a survey into the behaviour and attitudes of business angels - wealthy entrepreneurial individuals who invest in companies in return for a stake in the business. The survey reveals 84 per cent of business plans seen by potential investors are rated as poor.
The Investor Pulse 2003 Business Angel Survey, conducted by the National Business Angel Network (NBAN) and business angel network, c2Ventures, also shows once past the initial filter, 50 per cent of businesses fail to get funding because the management team is seen as weak or lacking commercial reality about the true market potential for the product or service.
Of this 50 per cent, 20 per cent chose not to invest in a particular company because of dissatisfaction with the quality of the management team, 19 per cent are put off by poor commercial awareness and 10 per cent back away because of personality clashes with management.
To increase the chances of securing funding, small firms should spend time perfecting their business plans and take a good look at their management team, says Paul Gardner, managing director of c2Ventures.
"Take time on your business plan. Eighty-eight per cent of the angels surveyed are satisfied with an executive summary or short precis at the first point of contact," said Gardner.
"Companies should aim for a concise, articulate and compelling illustration of their business which will immediately grab the attention of a potential investor.
"How management gels with a potential investor is also important - particularly when an angel wishes to sit on the board or be part of the management structure."