I continued to insist and the entrepreneur finally gave in. “All right. I will write a proper business plan.”  But then he really became annoyed, when I would not commit to forward it to an investor.

The reason? Because few inventors know how to present properly. And even less understand what goes into a really good business proposal. Until my insistence had got the better of him, my contact had felt that 4 badly photocopied pages with some pictures and technical explanations (of a great idea) would suffice. No!

Let’s quickly examine this point . Inventors know how to create – it is wonderful talent that I can only admire. From my perspective, it looks like a simple game for them. Similarly, good business plans are also a skill – the difference is that many feel that all it takes is the ability to sit down and churn out 20 pages with a few financial numbers.

No, again! Bluntly, a business plan is all about telling a prospective investor in a concise and simple (and truthful) manner why they are going to make a lot of manner very quickly. The punchline is in the the first 2 – 3 sentences.

By definition, that puts your average entrepreneur at a natural disadvantage. There is little room (or patience) for their rambling explanations about their wonderful invention – be it software, wires feeding into a medical device or a mobile app. ROI rules the waves, not clever but bewildering explanations, which merely cater to the founder’s ego.

An IIB colleague, Siu Ling Hui, has summed this up very eloquently in her latest newsletter. Her four page description of what is needed in a business plan is one of the clearest I have read. And she gently inserts a very telling piece of advice.

It’s all about striking a fair deal for both the business entrepreneurs and the business investors….Would you be prepared to invest in the business under the proposed terms of your offer?

I probably meet about 2-3 great new ideas every month. Very few sound genuinely convinced by their own commercial models. Yet, most are deluded by a belief that an investor will be won over by the wonders of the tech. For the third time, “no”!