ONLINE BUSINESS

What's the Need for Numbers in an Internet Business Plan?

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Q: I am putting together a document with two friends in order to approach aventure capitalist for an Internet-based start-up business. We believe wehave a very good idea but are not sure about implementation costs. Arefinancial projections important for the Internet market, or is it the numberof people you are going to attract?

A: Potential for traffic is a very serious component of the Internetbusiness plan, but venture capitalists are looking for more these days.

Yes, Silicon Valley is still awash in VC big money, even more so today becauseso many have made piles with their Internet investments. Here's some advice for approaching VCs with your concept:

  • Build a solid business plan and know your business model.Passion, passion, passion! VCs will need to see the fire in your eyes.
  • Forecast to the best of your ability. Don't skip the numbers. Look at theother models out there. The financial statements for hundreds of publiclytraded Internet companies are available for your picking.
  • Know how you'll keep the traffic coming and how you'll survive the competition.
  • Finally, do something that so many Internet companies haven't. Think about howto make money from all that traffic!

Copyright © 1997-2000 Palo Alto Software Inc.

Last updated: Feb 4, 2000




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