Many ventures are faced with the challenging task of raising venture capital. The first part of this process is finding the right venture capital firm (VC). While this may seem simple, it isn't. There are thousands of venture capital firms in the United S...

When a company decides that it must raise capital, a key question that must be answered is how much the company is worth. For example, if the business needs $500,000 to get started and/or grow, how much of the equity in that company should $500,000 comman...

Entrepreneurs and companies who are seeking venture capital often negotiate with one or more venture capital firms on a number of important issues. These issues include the amount of capital to be raised, the investment terms, etc. The document which summ...

A shell corporation is a company that is incorporated but has no significant assets or operations. These corporations may be formed as an alternative venture financing mechanism. Shell company financing works in two ways. In many cases, the shell corpo...

When raising capital for a business venture, a company can either raise debt capital, equity capital or a combination of the two. Debt capital is money loaned to the company at an agreed interest rate for a fixed time period. Conversely, equity capital is...

When raising capital for a business venture, warrants are a common form of equity that is given to investors. A warrant is like an option – it gives the holder the right to buy a security at a fixed or formulaic price, which is known as the "exercise" or ...

Companies seeking capital often ask how long the Executive Summary of their business plan should be. The answer depends upon the use of the summary, mainly determining if 1) it precedes the full business plan, or 2) it will be used as a stand-alone docume...

Many people ask how many graphs or charts they should have in their business plans. As with most other business planning questions, the answer is "it depends." This article discusses the key factors influencing the number of graphs and charts to include i...

In developing their business plans, companies of all sizes face the challenge of determining the size of their markets. To begin, companies must present the size of their "relevant market" in their plans. The relevant market equals the company's sales if ...

All investors greatly desire and are motivated by a clear picture of a company's exit strategy, or the timing and method through which they can "cash in" on their investment. This picture best comes into focus when the key valuation and liquidity drivers ...

Many investors skip straight to the financial section of the business plan. It is critical that the assumptions and projections in this section be realistic. Plans that show penetration, operating margin and revenues per employee figures that are poorly r...

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 chall...

Business plans continue to be an essential element of the capital-raising process. They must convince investors to take notice - investors that are shrewder today due to the ups-and-downs they have experienced over the past few years. Adding to the fin...

Most companies vastly underestimate the time commitment necessary to successfully complete a financing. In actuality, a company seeking financing needs to budget between 500 to 1000 work-hours to the capital-raising process, spread out over a 6-9 month t...

The Operations Plan is a critical component of any business plan as it presents the Company's action plan for executing its vision. The Operations Plan must detail 1) the processes that are performed to serve customers every day (short-term processes) and...