What happens when business plans do not go as plan?

A business plan is nothing but a plan for your business. It is an articulation of your vision on how the future will play out.

A business plan also articulates how the startup proposes to go from point A to point B, and by when. It also outlines the milestones and other dynamics (costs, resources, revenues, etc.) on the way from point A to point B. I.e. It is a plan of how the concept of your startup will alter the market, and how you intend to implement that disruption.

But at startup stage, there is no past data that can be used to make reasonably dependable predictions. Hence the vision of what might happen in the market with your concept is based on assumptions that you have made based on your conviction and your insights. Even in more established companies, there is only so much predictability you can bring into a business plan based on past data. How in-market dynamics may change is an unknown, and business plans even of larger, established companies can and often do get disrupted.

Some of the assumptions you have made will play out as assumed, others will not. Nothing surprising about that. Why then is it important to make a business plan knowing that what happens in the market is most likely to be very different from what you planned for? Click here to read more

 

 

 

Advertisements

How corporates can find innovation and disruptive ideas by engaging with the startup eco-system

There is a lot of innovation happening outside of company R&D labs. In startups. And the only way companies can get early access to that innovation is if they engage with startups meaningfully.

Engaging with the startups eco-system can give corporates to get early access to innovation in several aspects of their business – from disruptive products to disruptive solutions in marketing, finance, supply chain, operations and indeed any aspect of business.

Meaningfully designed startup engagement programs can also help companies attract talent, and enhance their brand appeal with the younger generation of entrepreneurially minded, innovation driven, consumers.

Often large companies feel that startup engagement programs will be complicated for them to design, and challenging to implement. But there are several easy-to-do models in which large companies can initiate their interactions with startups, and gradually deepen the engagement. Some of the models of engagement will be simpler to decide on and implement, while some may need deep thinking, and some may even need board level approvals to execute.
Continue reading “How corporates can find innovation and disruptive ideas by engaging with the startup eco-system”

What makes a good mentor-mentee relationship

A good mentor-mentee relationship can be game-changing for a startup, and therefore it is important that both – mentor and mentee – understand how they can make the engagement meaningful, productive, rewarding and fulfilling.

A good mentor can make significant contribution in not just the success of a startup, but also in the personal and professional growth of an entrepreneur. And therefore, I advise entrepreneurs to not give the tag of a ‘mentor’ loosely to anyone whose advice you seek regularly.

Mentoring is way beyond business advice and expertise sharing, and hence entrepreneurs and experts should be very, very careful when initiating a mentor-mentee relationship.

Who is a good mentor for your venture? Continue reading “What makes a good mentor-mentee relationship”

Thinking beyond VC funding can significantly expand the options and possibilities for an entrepreneur

The word ‘startups’ is currently used to describe technology companies or technology enabled companies that have the potential to get funding from angel investors or VCs. However, using that definition for a startup narrows the possibilities that the entrepreneur can pursue as a business because the kind of companies that VCs can invest in is a very small subset of the many kinds of businesses that entrepreneurs can pursue.

While many ventures can be good businesses for the entrepreneurs, they need not necessarily be a good investment for VCs. And to understand why that is so, it is important to understand the business model of angel investors and VCs. Continue reading “Thinking beyond VC funding can significantly expand the options and possibilities for an entrepreneur”

Are angel investors and VCs greedy? Why do they seek 10x – 20x returns on their investments.

Angel investors and early-stage VCs invest in companies at a stage when the assumptions around the business and the entrepreneur’s execution capabilities are yet to be proven.

While investors review shortlisted companies very, very diligently based on their perspective of the opportunity, their assessment of the business case, and their perception of the entrepreneur’s capabilities, quite a few of the companies that they invest in will fail for a variety of reasons. Some of their portfolio companies may do well, but the investors may not get an exit i.e. they may not get a buyer for the equity they hold in some reasonably successful ones.

Not only will the investors not get any returns on these investments in ventures that don’t succeed or where they do not get an exit, they will most likely lose their capital as well. Only a few of the companies that they invest in will be successful to the extent that they had assumed they would (or much more than that in rare cases).

And therefore, to cover these losses and to make money on their portfolio as a whole, they need at least a few multi-baggers in their portfolio i.e. companies that will be sold for 10 – 20 times the capital they had invested in. Continue reading “Are angel investors and VCs greedy? Why do they seek 10x – 20x returns on their investments.”

Why I wrote the book: Starting up and Fund Raising

There are now more ways than ever for startups to find and connect with investors, through in-person events and online deal-closure platforms, but this also means that investors are seeing more companies than ever before – it is important for entrepreneurs to catch their attention as they may only have one chance to make a good first impression.

prajakt-raut-book-launch-starting-up-fund-raising

Many startups start reaching out to investors before they know how to make a sound and compelling investment case for their business – and how to articulate that. 

Often even strong entrepreneurs with good ideas never get a foot in the door, or catch an investor’s attention because they have not been able to present a compelling case to investors.

Investors want to see a well thought out plan for your business. And how well your pitch deck or intro video communicates a well-thought-out plan is what can get investor attention. Continue reading “Why I wrote the book: Starting up and Fund Raising”