1	How to Wow With a Business Plan: Legal Aspects Green & Green
2	Before The Plan Try to get most of the following together: Original Financing History Creative Team Product and Service inventors Concept and R&D Team Marketing Team Professional team ATTORNEY: Help define and protect TS and intellectual property. Immediately keep agreements, records, licenses and hiring clean and accountable. Help select best form of business, prepare for Due Diligence by investors CPA: Help keep Books straight, GAAP, budget, prepare for audits, Due Diligence INSRANCE AGENT: Immediately cover for contingencies, supply litigation defense. Board of Directors Professional advisors Founders Major Investors
3	Making the 1^st Plan Table of Contents Mission Statement Executive Summary 2-3 pages Tells the basic story – what is the product / service? How does it make money? Models The Team: Personnel 2 pages Background R&D, Board and Professionals The Market, Opportunities, Competition 3 pages Properties 1 page Intellectual property and inventions, stock in trade, tools and real properties History, projects, growth in work and current projects. The Industry and its Risks 1-2 pages Be HONEST Financials & Key Issues 3-4 pages Current picture Demand for your Product / Service Caution on the Future
4	Mission Statement A clear statement of your company’s long-term mission. Try to use words that will help direct the growth of your company, but be as concise as possible. Make this a part of the beginning of your Executive Summary. Include Selling Points.
5	Executive Summary In 2-3 Pages: Communicate your company's particular competence The factors that will make your business successful in a competitive market. Use Plan Titles consistently Coin important phrases Define terms of Art Raise Value of Intellectual Property Mention its protection, licensing schemes. List Personnel Professionals Attorney – CPA - Insurance CEO and Board Partner companies, Parent Company Engineering and R&D, Sales Staff Caution on Financial Disclosures Agreements tell investors that it is high risk, that the debt is non-recourse and that they may not get their money back. Unless you have a PROFESSIONAL marketing analysis or long history, do not project profits.
6	Executive Summary: The Board – Core Team List CEO and key management by name Have a CEO with track record. Include previous accomplishments to show these are people with a record of success. Summarize number of years of experience in this field. “Partners” NOTE: if they have not actually signed an agreement they should not be mentioned as partners or joint venturers.
7	Executive Summary: The Market Market: past, present, & future: Review those changes in: market share, leadership, players, market shifts, Costs & pricing, or competition that provide the opportunity for your company’s success. The characteristics of your target market demographic, geographic, etc. the size of your target market.
8	Executive Summary: Opportunities Problems and opportunities: State consumer problems, and define nature of product/service opportunities created by those problems. Tell how this will become profitable and why it is expected to quickly gain market share If the product or service is unique, why and how you will remain ahead of the crowd.
9	Executive Summary: Business Concept Summarize: key technology, how it has a large market concept or strategy on which your business is based ONE paragraph on each should do here. IF you cannot sell this to the investor how can you sell it to the market?
10	Executive Summary: Competition Summarize competition Outline your company’s competitive advantage
11	The Plan: Goals & Objectives Immediate goals The next steps What it Costs to get there. Five-year goals State specific measurable objectives State market share objectives State revenue/profitability objectives
12	The Plan: Financial Plan High-level financial plan that defines its financial model, pricing assumptions, and reviews yearly expected sales and profits for the next three years. Do not Use other’s projections or an “overall industry” model of profitability. Be Realistic, use some graphics, have a CPA with experience prepare financials. Present an actual Profit Model Disclaimers are a MUST to avoid SEC violations and fraud actions. All claims to repayment must outline the risks Investors Agreement contains disclaimers Non-Standard: Every industry has its own risks.
13	The Plan: Resource Requirements Technology requirements Personnel requirements Resource requirements Financial, distribution, promotion, etc. External requirements Products/services/technology required to be purchased outside company
14	Be Prepared: Risks & Rewards Risks Summarize risks of proposed project Addressing risk Summarize how risks will be addressed Rewards Estimate expected pay-off, particularly if seeking funding Caution in estimating: base on experience and/or professional marketing
15	Be Prepared: Audit & Due Diligence - Legal Needs Intellectual property © ® & Pat Pending increases value Typically 90% + of Company’s future value. Contracts Letters of Intent for Convertible Stock ,Term Sheet Financing Agreements Cap Worksheets – capitalization is a benchmark valuation – what can be liquidated? SEC & Dept. of Corporations Registration of non-exempt sales of shares Exemptions Reg. D, Rule 504 (<$1mm) Limited Offerings (<35 persons, minimal advertising) Accredited Investors
16	Key Issues Near term Isolate key decisions and issues that need immediate or near-term resolution Long term Isolate issues needing long-term resolution State consequences of decision postponement If you are seeking funding, state specifics
17	Thank you! Visit Phil Green at the Mentoring sessions. Green & Green: Entertainment Intellectual property Virtual In-House Counsel Services Litigation Estates & Probate Business law www.greenandgreen.com (415) 457-8300