Investors want to see a plan that is first and foremost an operating plan of action for the business. Entrepreneurs try to impress financiers by explaining their widgets in techno-jargon which potential investors do not understand. Investors want to see independent evidence to support any market claims. Entrepreneurs do not use realistic sales and financial projections. They project phenomenal growth from the moment they get their money, claim they will obliterate the competition without a fight, and state generalizations about the business that clearly indicate they have no knowledge of the operation of a dynamic, chaotic, growing company.
Entrepreneurs write a plan that expresses arrogance.
Their message will be partially heeded, because potential investors will leave them alone. Entrepreneurs avoid or disguise potential negative aspects of the business, thus creating the impression they are either naive or devious. Neither of these traits has an endearing quality to financiers. Beyond a basic spread sheet, entrepreneurs ignore or do not adequately address cash flow, suggesting they have no idea if the company will be a cash-generating enterprise. If company cash self-sufficiency is not crystal clear, investors will avoid this opportunity like the plague.