I have been following a long thread on a popular forum about the importance of business plans in raising capital. Many frustrated capital seekers blame their business plans. Then of course, the business plan writers, who always outnumber them two to one, tell them that they are correct and launch into pitches for their services.
If you have been trying to raise money for over 6 months without success, here are a few things to consider.
1. Maybe it's not the business plan's fault?
Instead, maybe it's you. Maybe you and your team are the problem in the investors' minds. Sadly, if this is the case, they will almost never tell you because they want to avoid hurt feelings and possibly an unpleasant scene.
People are like that. Most are wimps about being frank if it may result in wounded feelings.
2. Maybe your idea is really not all that compelling? (This is the case 9 out of 10 times.)
Unfortunately, everyone wants to be supportive to aspiring entrepreneurs. So they shower you with fake encouragement. "What? You invented a new way to butter toast? That's fantastic. You'll make millions! Go get em, Tiger! Best of luck to you."
A few people see through this nonsense. Most don't want to face that they are being lied to and delude themselves into thinking it's the business plan's fault. It almost never is.
Bottom line: if both you and your idea were as good as you thought, you might have the money already. So you need to take a long hard look at yourself and your idea. Ask tough questions that demand brutally honest answers.
1. Is there anything in my past to inspire confidence in potential investors? Have I already succeeded in a business and made money for previous investors? Or am I a complete unknown to investors?
2. Do I have any real proof of market demand for my product (i.e., actual paying customers versus supportive pats on the back from mom and Uncle Ignatz)? Or is all just wishful thinking on my part?
If you're not attracting the money you need, dollars to donuts it has nothing to do with the business plan.