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As a corporate finance house specialising in
European tech VC-backed companies, we always face the challenge of identifying
the better startups which we want to work with. Especially when the task at hand
is financing or refinancing, we have to put our VC hat on, trying to anticipate
which companies VCs may be prepared to back.
Over the years we have developed a set of
questions and possible answers which we are using to benchmark companies. We use
this tool internally because it helps us:
- Be comprehensive in reviewing new situations (“checklist”)
- Be consistent in evaluating alternative opportunities (“scoring”);
alternatively this scoring system forces us to analyse why our gutfeel
encourages us to deviate from our conventional benchmarking
- Document our decisions – so that we can better understand what the market
is telling us when it comes to real-life feedback (“audit”)
- Share our experience and train newcomers joining Go4Venture (“training”)
We feel the tool has been sufficiently tested to
now share it with other entrepreneurs so that you can make your own assessment
of the merits of your business plan. In the process, we also hope you’ll get a
favourable impression of our own expertise and the analytical approach to our
work so that, should you consider hiring advisers, you will think of Go4Venture.
The Business Plan Scoring Tool
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The aim is obviously not to be 100% prescriptive – every
situation is different and every VC investor has its own specific circumstances
(stage of their funds, particular sector expertise, etc) which will influence
its thinking.
The scoring tool can however be useful in a number of respects:
- As a useful reminder of the key questions VC keep addressing when reading
a business plan or listening to a pitch.
- Through the suggested way of scoring answers, you will also gain the
possibility of benchmarking the level of maturity of your plan vs. your peers
as we see them.
- A word of caution though: the scores are tuned towards the very best
companies, so don’t expect too score high on every dimension. Rather try to
see how you can improve your areas of weaknesses. It is also worth pointing
out that, by definition, the later stage your company is, the better the score
should be. So don’t be too disappointed if, as a Series A, your score is
modest.
You’ll notice that there is room to make your own comments. This
is a place where you may want to document the key facts supporting your
assessment in regard of the guidelines provided – this usually ensures a level
of honesty to your scoring.
It is also the place where you may want to document your own
rationale in coming up with a score, particularly when the guidelines don’t seem
to apply so well to your particular business.
FAQs
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- Who should use this tool?
Entrepreneurs who want to assess the merits of their business plan. This can
be used as a reality check to measure your chances of getting funding (from
VCs). This can also be used as a way to anticipate VCs pushbacks and therefore
improve your proposal or the way your present it.
- What happens to the information if I press
“Send”? Go4Venture uses this web-based tool internally to
assess various companies which we are asked to work with, hence the “Send”
facility. If you choose to submit your information, it will come to enrich our
database of scores and eventually allow us to make better allowance for stage
or sector circumstances. We may also feel compelled to call you if we find
your plans exciting – unless you have contacted us by then! It goes without
saying that the information is held in confidence and will not be shared with
anyone outside the Go4Venture organisation without your approval.
The Business Plan Scoring tool is obviously work in progress. As
VC preferences evolve (particular from a sector standpoint) we’ll aim to amend
the scores accordingly. As we get more experience using the tool internally and
as we get more feedback from external users, we will obviously improve the tool.
So please do not hesitate to make comments – good or bad, this
will help make this questionnaire more robust for future users.
- For instructions on how to use the site, please refer to the
user manual, which you can download here.
- To see a full list of the questions you will be asked in the
scoring process, click here.
- If you experience any difficulties or problems using
this site, please contact info@go4venture.com for
assistance.
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