Question: What are the normal steps for angel investment? What’s involved in submitting a business plan?
I decided to answer this question here because I see it so often in email and in question and answer sites on the web, especially Quora, which is where I first saw it and answered it.
Yes you do need a business plan
In the U.S. market the business plan generally stays in the background while investors look at summaries first, then pitches, and only eventually, after a lot of screening, if they are interested enough to do the detailed study called due diligence, then the business plan.
You want a bare-bonesto guide your summary and pitch deck. You need to know strategy, tactics, milestones, and essential projections. But investors screen startups based on summaries and pitches before they look at full business plans.
But that’s not what you show investors first
So here are the normal steps:
- Summary. That’s either summary memo, or profile on and , or similar.
- If and only if the summary is interesting, then the pitch. There is a lot more information on the business pitch here on bplans. And for more of my posts, on this blog, choose the business pitch category.
- If and only if the pitch is interesting, investors will want to see a full business plan for due diligence.
However, this applies as general norm only, and in the U.S. market only. Generalizations are never always true. There are always exceptions.
(note: this first appeared as my Quora answer to What are the steps involved in submitting a business plan?