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I have never read a business plan or balance sheet

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Re: I have never read a business plan or balance sheet

#291

Post by rgrieselhuber »

darksaints wrote: post #288
austenallred wrote: post #159

Seems like a lot of people are missing the point of this one. PG/YC invest at the earliest stages. The information they need is pretty much: 1. What are you doing? 2. Do people like it? 3. How big is the market? 4. What are you/team like? Could you cover all of those in a formal business plan? Sure, but you can also do so in a short-form application that's 1/20 the length or in a 10-minute back-and-forth conversation…

> PG/YC invest at the earliest stages Except when they don't.

If they invest at the later stages, then the above four questions are validated enough anyway.

Re: I have never read a business plan or balance sheet

#292

Post by syedkarim »

alasdair_ wrote: post #98
Negitivefrags wrote: post #57

Earlier quoted context omitted.

I founded a company without a business plan. Raised money without a business plan. Ran the business profitably for a long time and then sold the majority of it without a business plan. I don’t see the value in a formal business plan at all and so I would almost agree with your made up quote there. I mean obviously you need to have a plan for your business. But writing it down in some formal way seems like a waste of…

I found the process of writing a business plan to be a useful one. It’s really just a list of questions to ask yourself - who are the customers? What is the product? How will you sell it? etc. The plan itself was short enough that I could share it with a fee people for advice but I never showed it to any of my investors, other than perhaps as a way to give a pre-canned snippet of information on a specific thing. The…

I've found the process of writing a business plan to be a complete waste of time. I've also found the organizations and investors who require a business plan to be a complete waste of time. Specifically, I'm referring to early stage, high-growth (potential) businesses. The short-term questions that a business plan answers are basic and a lot of fluffy writing goes into stating simple answers. The bigger-picture statements are really just short-form fiction.

Re: I have never read a business plan or balance sheet

#293

Post by HWR_14 »

throwaway1777 wrote: post #277
tener wrote: post #190

Earlier quoted context omitted.

Fair? Some people do much better in writing due to anxiety etc.

If you have so much anxiety you can’t pitch your idea and tell someone who you are you aren’t gonna make it as a founder unless you have a cofounder who can carry you.

The person was clearly responding to "as a teacher" and "students". We don't hold eighth graders to the same standards as founders.

Re: I have never read a business plan or balance sheet

#294

Post by jollybean »

A 'balance sheet' is useless in determining the value of an early stage company.

Let's be a bit cynical: the 'balance sheet' for a company at 0.2 on the scale of 0->1->N is basically the 'download and stickiness numbers'. YC strongly encourages users to 'share the numbers'.

The problem with this, is basically it's not really super early stage investing.

The implication is, you need to have a company showing material traction with a product, before taking on significant funds. Which is fine, but let's just be real about what that means.

It's a myth that 'rounds have been getting bigger' in a way ... really we've just been renaming rounds.

If you need to 'post good numbers' to get into a Seed, well, then it's not really 'Traditional Seed', it's something later.

Re: I have never read a business plan or balance sheet

#295

Post by jollybean »

Negitivefrags wrote: post #57
tomhallett wrote: post #37

Earlier quoted context omitted.

People really struggle to recognize context. I assume most people who are getting so upset about pg’s tweet are reading it as “business plans are stupid. Balance sheets are stupid. No company should ever make one because no one should ever read it. Anyone who reads one is stupid.” It should be implied that his advice is only relevant the type of investing which pg does. pg tweeted later on that his solution is someth…

I founded a company without a business plan. Raised money without a business plan. Ran the business profitably for a long time and then sold the majority of it without a business plan. I don’t see the value in a formal business plan at all and so I would almost agree with your made up quote there. I mean obviously you need to have a plan for your business. But writing it down in some formal way seems like a waste of…

You obviously had a business plan even if it was 'Build product that does A and sell it to B via C channels'.

Re: I have never read a business plan or balance sheet

#296

Post by snowwrestler »

nomilk wrote: post #73

Very similar to Sam's confession on Econtalk [1]: > I probably shouldn't admit this--I'm on the Board of a public company: I can't read a balance sheet or income statement or anything like that. [1] https://www.youtube.com/watch?v=JAYXUgNHHc4&t=1656s

It’s not really a confession because it takes very little effort or knowledge to read either, and he is obviously a smart and hard working person. Any MBA student can read these; obviously Sam could too.

What he is saying is that he doesn’t read them (i.e. chooses not to), and the implication is that he does not need to.

Re: I have never read a business plan or balance sheet

#297

Post by blablabla123 »

prea wrote: post #247

Am I missing something? What's the point of the tweet other than to elicit a reaction? And then in the replies: 'I CAN'T BELIEVE I ELICITED A REACTION!.

Actually small business advisors insist that founders do need a detailed business plan. But it's both necessary for founders, people giving advise and everyone involved that it depends on the kind of business. I used to think business plans are old school and overly formal. But it's good to know the correct reason.

Re: I have never read a business plan or balance sheet

#298

Post by _xnmw »

Interesting to contrast this with PG's most recent essay "Putting Ideas into Words" where he argues that people who don't write don't have fully formed ideas. What else is a business plan besides a thoughtful writeup? I think it would give me a good idea into how a person thinks.

[1] http://paulgraham.com/words.html

Re: I have never read a business plan or balance sheet

#299

Post by allenleee »

_xnmw wrote: post #298

Interesting to contrast this with PG's most recent essay "Putting Ideas into Words" where he argues that people who don't write don't have fully formed ideas. What else is a business plan besides a thoughtful writeup? I think it would give me a good idea into how a person thinks. [1] http://paulgraham.com/words.html

I wonder If PG wrote deck/business plan when he pitched LPs for money.

Re: I have never read a business plan or balance sheet

#300

Post by WisNorCan »

austenallred wrote: post #183
ignoramous wrote: post #180

Earlier quoted context omitted.

Gotcha. YC Continuity, otoh, surely evaluates go-to-market / business plan?

There’s a difference between business plan and Business Plan, so to speak - a formalized document with a pretty standardized format you used to have if you, for example, wanted to get a loan from a bank. It’s mostly gone away, but there used to be endless arguments about whether a startup should have a formalized written business plan https://en.m.wikipedia.org/wiki/Business_plan . Business schools taught all the MBA…

We worked with Continuity for our raise. PG was not involved.

They definitely required balance sheet, income statement, financial forecasts etc.

Much more than a deck and a one page memo. It all has to do with what stage you are raising at.

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