Deck 8: The Business Plan

Question 1

The entrepreneurial team should tailor their business plan to the likes and dislikes of the target investor group.

Answer 1

True

Question 2

When is it a good idea to hire an outside professional to write the business plan?

A) When time to market is a critical factor
B) When the lead entrepreneurs are deeply involved with other pursuits
C) It is not a good idea to hire an outside professional to write the business plan
D) When no one on the team is willing to take the lead in writing the document

Answer 2

C

Question 3

Why is it important to develop a business plan?

Answer 3

Mentioned in the text:
• It will document the "five anchors" noted earlier,including key issues such as the opportunity,the buyer and user,the market and competition,the economics and financial characteristics of the business,and the likely entry strategy.
• It communicates to and helps persuade stakeholders,financial backers,team members,key new hires,directors,brain trust prospects,and strategic partners.
• It will provide a roadmap for accountability around company performance.
• The collisions between founders and investors that occur during meetings,discussions,and investigations reveal a great deal to all parties and begin to set the mood for their relationship and negotiations.

Question 4

A dehydrated business plan is often developed by entrepreneurs who are too busy to write a complete business plan.

Question 5

The business plan should identify several alternative sources of financing.

Question 6

Describe how listening and asking questions is an important aspect of the business plan presentation.

Question 7

When presenting a plan for a business that involves highly technical material,investors will expect a full description of those applications and processes within the plan.

Question 8

Developing a business plan sets the mood for internal relationships and negotiations.

Question 9

What are three questions the team should ask after investors have had a chance to review the business plan?
Mentioned in the text: What have we missed? Where are we vulnerable? How would you knock us off? How would you modify our strategy? What would you do differently? What do you believe has to happen to make this highly successful?

Question 10

Professional investors will discount the potential of an opportunity if they are initially presented with a dehydrated business plan.

Question 11

If a team is starting a venture that will not need startup capital,then it is appropriate to hold off on the business plan while they establish a base of sales.

Question 12

During a business plan presentation,entrepreneurs can become so focused on selling the idea to the investors that they fail to ask great questions and do little serious ________.

Question 13

When speaking with venture capitalists,the entrepreneurial team should be prepared to provide details of ongoing talks with other venture capitalists.

Question 14

The business plan becomes the point of departure for prospective investors to begin their ________ to ascertain potential and various risks of the venture.

Question 15

What aspect of the plan would be of least interest to venture capital investors?

A) The economics
B) Team member resumes
C) Pro formas
D) Market studies

Question 16

The right investor can make the difference between an average and a good or great venture.

Question 17

It is acceptable to have unnamed management team members in your business plan as long as you can demonstrate they are critical to the operation.

Question 18

Your team is in the middle of writing your business plan to present to a key investor next month.In the process,a sales opportunity arises that will provide some positive cash flow.You should:

A) Put the business plan on hold and service the customer
B) Put the customer off until you have met with the investor
C) Hire an outside consultant to keep the plan on schedule while you service the client
D) Seek advice from the key investor

Question 19

Since business plans are obsolete at or before the printer,it is best not to invest a significant amount of time and some money in preparing the plan.

Question 20

Venture capitalists can be expected to say no quickly when they believe a venture or a team is not a fit with their investment objectives.