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are business plans that are prepared and marketed for a company by a business consultant. Many entrepreneurs use packages to attract venture capital. They do so in most cases to avoid having to create a business plan and become involved in the funding process. Business plans that are not prepared with the active involvement of management, however, stand little chance of attracting investors. Few brokers can present a company’s business proposal well without this active involvement. And few investors will invest their money in a company whose management is not involved throughout the planning and fundraising process. Why must management participate in preparing the business plan? For one thing, it is rarely possible for a broker to know a client company as well as its management does. For another, regardless of how well informed and connected a broker may be, no savvy investor will invest in a company without dealing directly with management. There is nothing wrong with seeking professional help in preparing a business plan or even in having a professional prepare parts of the plan as long as management actively participates in the process, understands the entire plan, and agrees with its form and focus. Entrepreneurs should understand that using a broker or investment banker to help locate funding will not free them from becoming involved in the fundraising. See: Brokers, Business Plan, Due Diligence, Investment Bankers, Negotiation. |
