Business Basics

Many investors base their entire investment decision on the management team behind a venture. Investors expect a well-rounded team of professionals with experience in every function critical to the business. Your management section should clearly demonstrate who each person is, why he or she is on your team, and what each person will do.

Try and limit your management team to 3 to 5 people - and to those individuals involved in the day to day operations that have the greatest impact on the future success of your business. Everyone else is considered either an employee, or if not involved in day to day operations should be included as a member of the Board of Advisors, Board of Directors or consultants. A discussion of your employees should be included in the operations section.

The basic components of the management section include:

Specific Team Members
Construct a narrative description for each team member, clarifying his or her background and intended contribution. This should include:

>> Title of this position
>> Duties and responsibilities of this position - what will they be doing, which functions will they be overseeing, who do they supervise, who do they report to, etc.
>> Previous industry and related experience -should be those that relate directly to this new position. Who have they worked for, what were they doing, for how long did they do it, etc.
>> Previous Successes - what did they accomplish, what successful teams or projects did they spearhead, did they grow a company or a division, were they responsible for a turnaround or some new breakthrough idea.
>> Education - keep educational descriptions brief

Board of Directors
Briefly describe who is on your Board and what role they play within your company. Briefly list the names, backgrounds, and contributions that will be made by each board member.

Explain the background of the founder(s) of the company at some length. However, limit this background information to under ½ a page. Stick to the facts on all your management team bios, making it evident why each person is experienced, why they hold their position, and the benefits they provide your company.

Common Mistakes to Avoid

The following are several common mistakes that decrease the effectiveness of your management plan:

>> Depending on unqualified friends or family in key management positions.
>> Assuming that previous success in other industries applies to your current industry.
>> Presenting a "one-man-team" management philosophy. Investors know it's difficult to wear every hat and successfully run and grow a company.
>> Attempting to attract top managers without sharing ownership.