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What does my business plan need?

Anja Swan

Created by Anja Swan, 3rd April 2017


Oli, The Syndicate RoomThank you to The Syndicate Room for supplying this piece giving insights into what a business plan needs to be successful.

Investor memorandums, pitch decks and business plans are the core of any decent investment proposal. It’s important you get these documents right, otherwise you may find yourself with empty pockets and egg on your face.

Business plans are difficult to get right. Many people don’t want to go down the route of consistency (too boring), while the majority are reluctant to make them too different in case it scares off investors. The reality is that there should be an element of consistency in ANY business plan – there are certain aspects of any business you need to touch on, boring or not. And that’s what I’ll be focusing on here, because I work in finance and that’s just about as boring as it gets anyway.



Sophisticated investors are frequently time-poor (you don’t make that sort of money without being busy) and so need to have quick access to necessary information. Now, I’ve previously used the terms ‘business plan’, ‘investor memorandum’ and ‘pitch deck’ rather frivolously, but shame on me because they are not the same thing.

Business plans tend to be more in depth. Traditionally, these were the hefty documents you gave to your bank manager, which they used to scan and stamp to make themselves feel better. When doing my reviews for SyndicateRoom it’s not alien to come across business plans that are 50+ pages. These documents are important because they cover the whole intended lifecycle of the company, but as such they are prone to change. Do not be scared to change your business plan if you need to. Company progression is rarely linear and, like a good night out, you rarely end up where you intended to at the start.

Investor memorandums (IMs) and pitch decks tend to be shorter and particular to the funding round. These documents will not only contain information about your company (keep reading for those tips!) but also specific information about the round itself: valuation, share price and targets. They usually float between 15 and 25 pages, and will give a solid overview of what investors need to know – and they will likely be the first thing a potential investor will want to see. After reading, investors may well ask to see your business plan for supplementary information and a more in-depth review but, to pique interest, these documents are the best way to go.

One mistake that a lot of early-stage companies make is to attempt to flood investors with information, which is likely to put them off from the start. In a competitive landscape, companies need to be able to quickly encourage interest from investors with relevant information before giving them access to intimidating technical readouts and 50-page plans.


Team bios

In early-stage investment, your team is incredibly important. I’m keen not to start ranking requirements here in terms of importance, but let’s just say if I was forced to… hypothetically… I would put the team at the top. The road to success is long and your team is vital to achieving this, so don’t feel embarrassed to shout about them – and yourself! Early-stage investing relies on a belief from investors that a team is capable of carrying out what is stated in the plans, so make sure you dedicate a page to the background and qualification of your team; not doing so would raise questions.

In fact, go one step further and add your advisors and non-execs. Key areas to mention include specialities, previous companies and exit experience. All of these people will give potential investors more confidence in your product and your business, making them more likely to follow interest with their cash.



Financial projections are something that consistently cause controversy in early-stage companies. I’ve said it once and I’ll say it 1,000 times more before some entrepreneurs listen: financial projections are, at best, uncertain; at worst, deluded.

Some claim that financial forecasts are not overly relevant because they’re just guess work, while others can put high stock in them. Personally, I tend to sit on the fence. But whatever way you look at it, they should never be overlooked.

The key with financials is to be realistic; too often an investor will see forecasts that defy physics with their growth. Contrary to what some people seem to believe, forecasting huge growth for your company can actually be a hindrance rather than an asset during a funding campaign. You need to make sure you’re basing your assumptions on reasonable expectations. Why would this growth occur? What in your future allows you to scale to this level? If you can’t answer these questions then why are you forecasting any growth at all? More than anything, realistic financials show a realistic attitude and a working knowledge of your market.

Something else that should always be included: cash flows. Cash is king and to ignore it would leave you playing the court jester. Nine out of ten startups will fail, with one of the key reasons for this being they run out of cash. Investors know this and will be keen to view the business’s current cash position, expecting to see a controlled and sustainable burn rate. Finally, please make sure your financial terms are standard and that you’re using them correctly, otherwise investors (and analysts like me) will get confused. Cash burn and expenditure are not the same thing…



Absolute no brainer, this one – I hope you’re not surprised by its inclusion. You need to make sure you cover your product properly. At SyndicateRoom we deal with a lot of high-tech companies: medtech, biotech, SaaS and engineering. All of these sectors tend to produce products that are industry specific and hi-tech, which means they come with a lot of jargon and technical expertise attached. We completely get it – you’re a blockchain company or a medtech company with some really high-end, impressive technology. You, rightly, want to shout about this technology – and so you should! However, blinding investors with jargon and coding is not the best way to make your case. Investors don’t like to feel stupid (and neither do I!).

You need to make sure you outline the practical use of your product. Who is this product helping? Why do they need it? And, importantly, why would they come to you? Don’t sweep the fact that you’ve got market competitors under the rug; if you’re unwilling to acknowledge them, then how should an investor expect you to compete?



So, you’ve showcased your team, you’ve polished your product till it sparkles – but it’s all worthless unless you’ve got a market for it. Investors will be keen to see a working knowledge of the market you operate in, and to suggest that you don’t have one would be committing funding suicide.

Make sure you keep market statements relevant. It’s not rare to see companies creating a niche product for certain markets and citing the size of the whole market in validation: ‘We create a drink, specifically a health drink made from coconut water and smashed avocado, that is high in protein and helps with IBS. The size of the food and drink market in the UK is…’ Investors want to know what the size of the market you can hope to address is. Stating the size of the health drink market, or even the size of the health food and drink market, is a step in the right direction that potential investors will appreciate.

Make sure you use reputable sources to back up your claims. This won’t only help validate your market/ financial forecasts to investors, but is also important for financial promotion compliance, which the FCA is strict to enforce.



As a millennial, I had Jessie J and 50 Cent. Those of you from Generation X may have had Liza Minnelli or Abba. For those of you who don’t see the link, I haven’t gone crazy; they all sang songs about money. Money is the reason most investors will get involved with your company: they want to see a return, preferably a big one.

Investing in early-stage companies is two things: very high risk and illiquid. All sophisticated investors should be aware of this. Due to the high risk, an investor will expect to see information on anticipated exit points. Now, you need to be careful here and stay away from language such as ‘you will see a return in…’ or ‘we will exit at…’ because nothing is certain until it’s happened and to claim otherwise is, from a financial promotion point of view, simply asking for trouble. Make sure that your targets are achievable and that your language isn’t binding: ‘We expect to achieve…’, ‘we aim to exit…’. A sophisticated investor will be aware that any exit expectation given will usually be speculative, but don’t use that as an excuse to let your protection slide or you may find that it comes back to bite you in the future. A good way to validate any exit proposal is to look at other exits in your industry and compare them to where you expect to be in future.

Goals of the round

You: ‘Mum, can I have a tenner?’

Mum: ‘Why?’

You: ‘No reason, I just want a tenner.’

Mum: ‘Well go and get a paper round then.’

Amounts are (hopefully) different but premise is exactly the same – why should I give you my hard-earned cash? If you don’t know what you’re going to spend the cash on, why are you even raising it? Make sure you set out a clear plan for the round and make sure that this is present in your deck.

Being clear about what you plan on using the funds for can help you in several ways:

  1. By having clear goals, you’re less likely to end up giving away too much equity by oversubscribing your round
  2. It means you’re less likely to end up with insufficient cash runway
  3. It shows investors you’re organised and have control over your business finances

So, there we go, a few tips to point you in the right direction. Remember, consistency is helpful, but isn’t always the key. Businesses come in all different shapes, sizes and sectors, so be prepared to add information to your investment documents that you feel is important for your potential investors.


What you need to appreciate is that an investment round is about more than just a healthy bank balance; it’s about recruiting experience and opportunities. Don’t feel obliged to on-board an investor just because they’re throwing money at you. Look for those who will add value to your company in other ways. Who knows, they could make up part of the team that will help you secure those larger rounds in future.  


Anja Swan

Created by Anja Swan, 3 years ago, [last edited 3 years ago]

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