What do investors look for in a business plan? A comparison of the investment criteria of bankers, venture capitalists and business angels

International Small Business Journal

Volumn 22, Issue 3, 2004, Pages 227-248

  Mason, Colin ^a   Stark, Matthew ^b  

^a UNIVERSITY OF STRATHCLYDE   (United Kingdom)

^b Tenon Limited   (United Kingdom)

Author keywords

Banks; Business angels; Business plans; Small business; Venture capital

Indexed keywords

EID: 3242664551     PISSN: 02662426     EISSN: None     Source Type: Journal    
DOI: 10.1177/0266242604042377     Document Type: Article

References (48)

1. Allen, K. R. (1999) Launching New Ventures: An Entrepreneurial Approach, 2nd edn. Boston, MA: Houghton Mifflin.
2. Avery, R. B., Bostic, R. W. and Samolyk, K. A. (1998) 'The Role of Personal Wealth in Small Business Finance', Journal of Banking and Finance 22(6-8): 1019-61.
3. Barrow, C., Barrow, P. and Brown, R. (2001) The Business Plan Workbook, 4th edn. London: Kogan Page.
4. Berger, A. N. and Udell, G. F. (1998) 'The Economics of Small Business Finance: The Role of Private Equity and Debt Markets in the Financial Growth Cycle', Journal of Banking and Finance 22(6-8): 613-73.
5. Binks, M. and Ennew, C. T. (1996) 'Growing Firms and Credit Constraint', Small Business Economics 8(1): 17-25.
6. Binks, M. R. and Ennew, C. T. (1997) 'The Relationship between UK Banks and their Small Business Customers', Small Business Economics 9(2): 167-78.
7. Burns, P. (2001) Entrepreneurship and Small Business. Basingstoke: Palgrave.
8. Deakins, D. and Hussain, G. (1994) 'Risk Assessment and Asymmetric Information', Journal of Bank Marketing 12(1): 24-31.
9. Dixon, R. (1991) 'Venture Capitalists and the Appraisal of Investments', Omega 19(5), 333-44.
10. Ericsson, K. A. and Simon, H. A. (1993) Protocol Analysis, 2nd edn. Cambridge, MA: MIT Press.
11. Feeney, L., Haines, G. H. and Riding, A. L. (1999) 'Private Investors' Investment Criteria: Insights from Qualitative Data', Venture Capital: An International Journal of Entrepreneurial Finance 1(2): 121-45.
12. Fiet, J. O. (1995a) 'Reliance upon Informants in the Venture Capital Industry', Journal of Business Venturing 10(3): 195-223.
13. Fiet, J. O. (1995b) 'Risk Avoidance Strategies in Venture Capital Markets', Journal of Management Studies 32(4): 551-74.
14. Fletcher, M. (1995) 'Decision Making by Scottish Bank Managers', International Journal of Entrepreneurial Behaviour and Research 1(2): 37-53.
15. Fried, V. H. and Hisrich, R. D. (1994) 'Toward a Model of Venture Capital Investment Decision Making', Financial Management 23(3): 28-37.
16. Haines, G. H, Jr, Madill, J. J. and Riding, A. R. (2003) 'Informal Investment in Canada: Financing Small Business Growth', Journal of Small Business and Entrepreneurship 16(3-4):13-40.
17. Hall, J. and Hofer, C. W. (1993) 'Venture Capitalists' Decision Criteria in New Venture Evaluation', Journal of Business Venturing 8(1): 25-42.
18. Kirby, D. A. (2002) Entrepreneurship. London: McGraw-Hill.
19. Kuratko, D. F. and Hodgetts, R. M. (2001) Entrepreneurship: A Contemporary Approach, 5th edn. Orlando, FL: Harcourt.
20. Looser, U. and Schläpfer, B. (2001) The New Venture Adventure: Succeed With Professional Business Planning. New York: Texere.
21. MacMillan, I. C., Siegel, R. and Subba Narasimha, P. N. (1985) 'Criteria Used by Venture Capitalists to Evaluate New Venture Proposals', in J. A. Hornaday, E. B. Shils, J. A. Timmons and K. H. Vesper (eds) Frontiers of Entrepreneurship Research 1985, pp. 126-41. Wellesley, MA: Babson College.
22. Manigart, S., Wright, M., Robbie, K., Desbrières, P. and De Waele, K. (1997) 'Venture Capitalists' Appraisal of Investment Projects: An Empirical European Study', Entrepreneurship Theory and Practice 21(4): 29-43.
23. Mason, C. M. and Harrison, R. T. (1994) 'The Informal Venture Capital Market in the UK', in A. Hughes and D. J. Storey (eds) Financing Small Firms, pp. 64-111. London: Routledge,.
24. Mason, C. M. and Harrison, R. T. (1996a) 'Informal Venture Capital: A Study of the Investment Process and Post-investment Experience', Entrepreneurship and Regional Development 8: 105-26.
25. Mason, C. M. and Harrison, R. T. (1996b) 'Why Business Angels Say No: A Case Study of Opportunities Rejected by an Informal Investor Syndicate', International Small Business Journal 14(2): 35-51.
26. Mason, C. M. and Harrison, R. T. (2002) 'Barriers to Investment in the Informal Venture Capital Market', Entrepreneurship and Regional Development 14(3): 271-87.
27. Mason, C. and Rogers, A. (1996) 'Understanding the Business Angel's Investment Decision', Venture Finance Working Paper No. 14, University of Southampton and University of Ulster.
28. Mason, C. and Rogers, A. (1997) 'The Business Angel's Investment Decision: An Exploratory Analysis', in D. Deakins, P. Jennings and C. Mason (eds) Entrepreneurship in the 1990s, pp. 29-46. London: Paul Chapman Publishing.
29. Muzyka, D., Birley, S. and Leleux, B. (1996) 'Trade-offs in the Investment Decisions of European Venture Capitalists', Journal of Business Venturing 11(4): 273-87.
30. Parker, S. (2002) 'Do Banks Ration Credit to New Businesses? And Should Governments Intervene?', Scottish Journal of Political Economy 49(2): 162-95.
31. Riding, A., Dal Cin, P., Duxbury, L., Haines, G. and Safrata, R. (1993) Informal Investors in Canada: The Identification of Salient Characteristics. Ottawa: Carleton University.
32. Riquelme, H. and Rickards, T. (1992) 'Hybrid Conjoint Analysis: An Estimation Probe in New Venture Decisions', Journal of Business Venturing 7: 505-18.
33. Shepherd, D. A. (1999) 'Venture Capitalists' Introspection: A Comparison of "in use" and "espoused" Decision Policies', Journal of Small Business Management 37(2): 76-87.
34. Shepherd, D. and Douglas, E. J. (1999) Attracting Equity Investors: Positioning, Preparing and Presenting the Business Plan. Thousand Oaks, CA: Sage.
35. Shepherd, D. A. and Zacharakis, A. (1999) 'Conjoint Analysis: A New Methodological Approach for Researching the Decision Policies of Venture Capitalists', Venture Capital: An International Journal of Entrepreneurial Finance 1(3): 197-217.
36. Smith, J. K. and Smith, R. L. (2000) Entrepreneurial Finance. New York: Wiley.
37. Storey, D. J. (1994) 'New Firm Growth and Bank Financing', Small Business Economics 6(2):139-50.
38. Sweeting, R. C. (1991) 'UK Venture Capital Funds and the Funding of New Technology-based Ventures: Process and Relationships', Journal of Management Studies 28: 601-22.
39. Tiffany, P. and Peterson, S. D. (1997) Business Plans For Dummies. Foster City, CA: IDG Books.
40. Timmons, J. (1999) New Venture Creation: Entrepreneurship For The 21st Century, 5th edition. Boston, MA: Irwin/McGraw Hill.
41. Van Osnabrugge, M. (2000) 'A Comparison of Business Angel and Venture Capitalist Investment Procedures: An Agency Theory-based Analysis', Venture Capital. An International Journal of Entrepreneurial Finance 2(2): 91-109.
42. Van Osnabrugge, M. and Robinson, R. J. (2000) Angel Investing: Matching Start-Up Funds With Start-Up Companies. San Francisco, CA: Jossey Bass.
43. Vesper, K. H. (1996) New Venture Experience, rev. edn. Seattle, WA: Vector Books.
44. Wetzel, W. E. (1981) 'Informal Risk Capital in New England', in K. H. Vesper (ed.) Frontiers of Entrepreneurship Research 1981, pp. 217-45. Wellesley, MA: Babson College.
45. Wright, M. and Robbie, K. (1996) 'Venture Capitalists, Unquoted Equity Investment Appraisal and the Role of Accounting Information', Accounting and Business Research 26: 153-68.
46. Wynant, L. and Hatch, J. (1991) Banks and Small Business Borrowers. London, Canada: The Western Business School, University of Western Ontario.
47. Zacharakis, A. L. and Meyer, G. D. (1995) 'The Venture Capitalist Decision: Understanding Process Versus Outcome', in W. D. Bygrave, B. J. Bird, S. Birley, N. C. Churchill, M. Hay, R. H. Keeley and W. E. Wetzel Jr (eds) Frontiers of Entrepreneurship Research 1995, pp. 465-78. Wellesley, MA: Babson College.
48. Zacharakis, A. L. and Meyer, G. D. (1998) 'A Lack of Insight: Do Venture Capitalists Really Understand their Own Decision Processes?', Journal of Business Venturing 13(1): 57-76.