It is imperative that any business seeking venture or angel investment understands equity capital. Equity capital is an investment that an individual or company makes in a business in exchange for ownership share in the company. Equity capital can come in the form of owning stock shares of a company outright or other financial instruments with the right to convert into stock.
Generally speaking, there are two types of investors that seek to infuse new and emerging businesses with equity capital—angel investors and venture capital (VC) firms. These investors typically review business plans written especially for angel investors or VCs. A business plan for Angel or VC capital must cover every component of the respective company to a degree of reasonable assumptions and illustrate a greater return on investment than would a typical debt capital. This is because the nature of new or emerging business investment carries with it a high degree of risk and risk is something that the business plan should seek to mitigate through proper business structure and an analysis of the market and the competition.
Writing a business plan directed toward angels or VCs is an exercise that an entrepreneur or management team might only do once or twice in their lifetime. Thus, it is logical that a company should specialize in helping these individuals or teams create a compelling document. This environment is what led to the development of MasterPlans. Not only have we developed a longstanding track record in creating concise, compelling business plans to raise equity capital, but we also keep abreast of trends in the business investment community. This has led to an ever-evolving business plan that keeps with the demands of continually more stringent investors guidelines.
Simply put, the business plan that might have raised $2 million 10 years ago doesn't hold a candle to the business plans that are being invested in today. For more information on how MasterPlans can help turn your business concept into a structured and investor-worthy business plan, please contact us.