Are business plans a waste of time?

Social connections trump business plans by a long shot, says Goldfarb Thus it is that people who already know VCs and angels have an easier time raising money. The irony, says Goldfarb, is that people who don’t have connections need to go out and make them, which may require that they have a business plan to discuss. But the plan is sort of like a business card, he says – just something that business protocol dictates you carry around.

via peHUB » Study Finds Business Plans a Waste of Time.

I wasn’t surprised by the results from this study, although the study only looked at plans from the dot-bomb era.  I’d be interested to see how the conclusions would have been affected had they also looked at a less frothy period.

On a related note, here’s what I like to see when being pitched, in lieu of a full business plan:

• 3 year financial model
• 10 slide pitch deck (I like the guidelines they’ve got on www.garage.com for early stage company pitches)
• 20+ slide supplementary deck that reads more like a document, filling in details from the pitch deck

With these three items, you’ll have the meat of a business plan, without the less nutritional filler.

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