CREATE A LEAN CANVAS TO VALIDATE YOUR BUSINESS; THEN PREPARE FOR FUNDRAISING
BY REVITAL RAUCHWERGER
If you’re preparing for meetings with potential investors, you’ve probably already developed an MVP, defined your target markets, and calculated how you will generate revenue. But have you given thought to your early adopters, existing alternatives, your unfair advantage, and your cost structure?
The Lean Canvas—created by Ash Maurya—provides you with an incredibly innovative and highly practical 1-page business plan template to document your venture’s key hypotheses. Its components, including what I mentioned above, are what you need to test and confirm, or revise. It provides you with a framework to validate your business!
The highly customer-centric aspect of the Lean Canvas will help you stay focused on your target customers and their problems or challenges. Market need is critical to your success. In fact, CB Insights found that 42% of startups fail due to “no market need.” As you test your hypotheses—primarily by talking with potential customers—your canvas will probably undergo a number of iterations. However, updating only one page is undoubtedly easier and faster than continuously revising a set of documents.
Once you are satisfied with the resulting Lean Canvas, use it as a base for your “investor toolkit”: one-pager, pitch deck, and full business plan (yes, there are investors that will ask for a business plan, but—more importantly—you should produce one as a blueprint for you and your team).
Your investor toolkit will require additional elements that are not included in a Lean Canvas, such as total addressable market and detailed financial analyses. However, these additions, too, will be based on what you have validated.
Bottom-line: focus on the essence of your business, and start with a Lean Canvas.
Starting December 9th, the Gvahim Entrepreneurship Center will run a 1-month Pre-fundraising Program in Tel Aviv, where participants will learn how to produce a one-pager, pitch deck, and business plan. We will, of course, start with a Lean Canvas The program will include customer development; due diligence processes and term sheets; financial statements; and much more. Our participants will also meet with executives from the Israeli investment ecosystem. For more information, click here: https://bit.ly/2KVgObx