Creating a good venture plan can help to put your business on the right track from the start.
We spoke to Ben Ling on the topic of creating a venture plan. From the best blueprint for a venture plan to ways that will help you to stand apart from the crowd, this article will equip you with the tools to craft your venture plan.
Ben has been an entrepreneur most of his life, he currently lives in Bali and Singapore and owns businesses in hotels and properties. At INSEAD, he has also been the IVC Chairperson since 2019, where he mentors all teams and mediates the event and judging. Ben graduated as an architect from the Architectural Association in London and also has an Executive MBA from INSEAD.
What do you consider to be the best blueprint for a venture plan?
A venture plan is something that constantly evolves – it is not fixed in stone. There are four main parts to any venture plan: why, what, how and who. The first part explains the problem you’ve identified and why it’s worth solving. The second part would be what makes you unique. The third part is how you plan to do it, and the last part is who you are.
Explaining the solution you offer can sometimes be more difficult to do than expected. Picture someone saying that they want to build a rocket to the moon because someday we’ll need to move there. With such a big idea, it is important to show how you are planning to do it. Investors want to see that you not only have good ideas but that you have thought of ways to execute them.
What are some of the main pitfalls to avoid when creating a venture plan?
On a basic level, there are two things: presenting and content.
When presenting a venture plan, it is typically in one of two situations – a venture competition like the IVC or for VC investors. VCs receive hundreds of venture plans every month. Your venture plan needs to be visually appealing, clear, and not all text-based if you want to stand out from the crowd.
You have to understand who will be reading your venture plan. Take the time to make it look good, clear and concise, allowing the person who reads it to understand it in a couple of minutes.
People generally understand the first two parts of a venture plan: the why and the what. Investors often look for the last two (how and who). They want to know why you are doing this, how you will acquire customers, generate capital and execute your idea. These are two very important points to cover.
What sections of a venture plan do people tend to consider less important?
There is no “one-size-fits-all” approach to a venture plan. A template does not work. You are telling a story, and every story is going to be different. It depends on what you are trying to tell. For example, if you are trying to do something highly technical, you’ll need to spend more time explaining the technicalities. Whereas setting up an eCommerce shop that sells vintage clothes is more simple, so you can spend less time on it.
One thing that is sometimes overlooked, is that the person reading your venture plan is also a human being. It is important to make someone feel for you and your story. It is not just about facts. If you have a story behind what you are doing and how you came about the idea, it can add emotion. We are still emotional beings, and it is essential to find a way for people to relate to your story.
What are three key pieces of advice to consider for every venture plan?
In any venture plan, it needs to be clear why this idea came from you. A person with a good reason to start a business has a higher chance to push forward. The person with a reason has a lot more motivation than just a great idea that will make tons of money. They will push a lot harder than someone who sounds like they’ve pulled an idea out of the sky. It is key to establish a personal connection.
To a lot of people, the team is the most important thing. A great idea with the wrong team might not achieve anything. Whether you are a single founder or multiple founders, it is important to understand what skills your startup needs and to find people that are complementary to it and share the same passion to develop the idea.
In general, startups do not have a lot of experience. What you can do is surround yourself with advisors and experts who can help and guide you when needed. This will inspire confidence in the person reading your venture plan. While you might have the most experience, you have surrounded yourself with people who can guide you. Therefore, there is a better chance you may reach your goals.
Lastly, try to get your idea to a point where it is as close to starting as possible. Let’s look at two examples:
1. Hi, my name is Ben. I want to build a rocket to the moon. The Earth is dying and we need to move to another planet. This is such a big opportunity, we could make trillions of dollars.
2. My name is Ben, and I want to build a bicycle. My uncle is one of the chief engineers at Toyota, and I spoke to Elon Musk, who is going to help me make an electric version of my bicycle. I’ve been talking to GE, we are currently creating some prototypes. My co-founder has worked for Formula 1, and he is an expert in mechanics.
The rocket idea is massive. The bicycle idea is a lot smaller, but chances are people will be more likely to choose the second pitch. It already looks like this idea is closer to being realised. If an investor were looking to invest $5,000, there is a very high chance they would lose their money, if they invest in the rocket idea, even if the upside could be massive. The bicycle idea is not that big and the upside may not be that high, but their chances of losing the money they’ve invested are minimal.
There is one more important point: product-market fit. People tend to talk about the problem and then the solution. You need to remember, the solution is just a hypothesis. You are assuming people will buy your solution. The key is to test your hypothesis and make it real.
If you put an idea on Kickstarter, and 2000 people have purchased it, it proves that there are people who like your idea and they are responding to it. There are multiple ways to prove your hypothesis, through surveys, and partnerships, that will allow your solution to become real.
What’s one thing you can do to make yourself stand apart from venture plans or pitches?
Try to present your business idea in person. There are many things that you can put on paper, but presenting in person allows you to show integrity, leadership and a will to fight. You can also show the chemistry between you and your co-founders, the ability to collaborate and work together.
If you have the opportunity, don’t email a document. Meet and pitch to your potential investors in real life, because there are so many intangibles that they are looking for.