The best laid plans...

Biz plans; do VCs read them?


  1. This tweet...
  2. ...prompted this question; "do VCs read business plans?"
  3. This article references work by Kirsch, Goldfarb and Gera, "Form or substance: the role of business plans in venture capital decision making," which I had already read in the past.
  4. This substantial study primarily looked at tech business plans circa the dot com era.
  5. Does it apply, as I suspect, to VCs in other sectors, such as biotech?
  6. Joe Cunningham, MD, Managing Director of Santé Ventures, gave me a great response; "Because we look at such a high number of potential deals each year, we find that reading a business plan is a very inefficient way to evaluate opportunities, so we just don't do it. We screen deals based upon reading an executive summary, generally 2 pages or less. If interested, we may have the entrepreneur present a PowerPoint. We will ask questions. If we get serious and are really digging in we are going to do our own research and analysis, not rely on what the entrepreneur puts into the business plan. So writing a business plan may be useful to help the entrepreneur put his thoughts in order, but it is not helpful to me in evaluating an opportunity." My emphasis.  
  7. So, a concise PPT deck--with "real" data, minus spin--is perhaps more valuable in the VC process.
  8. Here is feedback from a company developing heat-stable vaccines that recently closed a Series A:
  9. Do VCs read business plans? Here's a great summary, also by Joe; "I simply don't have the time to read the business plans of each opportunity that comes in, and I find them to be an inefficient source of information."

    And yes, I have an MBA.