Business Plan Details

Last week, a private equity partner--Ron Mika-- attended my MBA 664 Venture Capital / Private Equity course and gave us a document on what he likes to see when a company is pitching itself to be bought by his firm.

I definitely think this list will be useful to me in the future and probably to thousands of the million of readers of this blog :)

Presentation Outline Suggestions:

Executive Summary ("Answer First"):

• Company/Industry/Transaction Overview
• Investment Thesis - Why why are we interested?
• Risks - What should we be concerned about?
• Proposed Deal Structure (Sources & Uses)
• Financial Cases (Management, Underwriting/Base, Downside)
• Financial Returns

Industry Detail

• Is this an attractive industry to invest in?
• Porter 5 Forces
• Growth
• Relative Market Share
• Speed of Change/Innovation
• Cycles
• Etc. --- (ok I agree, is there a need for an 'etc' in a list like this?)

Company Detail

• Is this an attractive company to invest in?
• Competitive Advantages
• Product Advantages
• Distribution Advantages
• Relative Cost Positon
• Technology of IP Position
• Management
• Etc.

Deal Detail:

• Deal Dynamics (Auction, Inside Track, Proprietary, Mgt. Reinvest, Etc.)
• Structure/Financing Terms
• Comparables (Trading & Transaction)
• Exit Scenarios
• Major Assumptions for Each Case (Mgt, Base, Downside)
• Bottoms-up P&L, B/S, CF
  
• Downside Protection - "How low can you go?"
• Excel Model

Obviously, this list is for a Private Equity firm, but there is still lots of applicability to those trying to raise Venture Capital. I imagine there are thousands of lists out there like this. I'm sure those are legit too, but I know this one is because of who gave it to me.