What Top Venture Capitalists Look for in Internet Business Plans

Overview: The article tries to find out the ways to attract the attention of venture capitalists. One needs more than a great idea and a great business plan. To interest a venture capitalist today, one have to present more than a business plan for billion-dollar company. Without the possibility of reaching this level of market value, one is probably wasting time. Internet venture capitalist invest in people even more than in ideas. Given the fast pace of change in the Internet field, it is assumed that the direction and focus of the business are likely to shift several times. In most industries, the business model-the way the business makes a profit-does not need to be described because it is obvious. In the Internet field, however, the model often isn’t clear. A great idea and a super manager team will not be enough if he cannot find a way to make the idea generate cash. Every Internet business plan has projections that start low and shoot up to absurdly high profit forecast by the third year. Venture capitalist do not necessarily believe these projections, but the forecast are useful to show optimism and growth potential. The ability to adapt to market shifts is crucial for an Internet entrepreneur.

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Format: HTML | Date: Jan 2003 | Pages: 1