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Ask HN: How much equity is a business plan worth?

5 点作者 nickh将近 14 年前
Say one person comes up with the idea for a startup, and spends a significant amount of time over 2 years developing the business plan. That person then asks others to join the startup as co-founders to help build the startup.<p>When allocating equity to each co-founder, how much equity is that existing business plan worth?<p>-- Edit 2011-06-22 17:23 GMT<p>This is a pretty open-ended question. I should've included more details:<p>The person who wrote the business plan is the startup's CEO.<p>The business revolves around a website marketplace.<p>The business plan includes:<p>- multiple lucrative sources of revenue - a basic plan for user acquisition - identification of additional roles that will need to be filled - financial projections - detailed, yet incomplete, explanation of the website's functionality - some validated learning[1]<p>The other co-founders are the CTO, the front-end designer and coder, and the artist.<p>[1] http://lean.st/principles/validated-learning

4 条评论

trevelyan将近 14 年前
My suggestion is zero. A formal business plan simply isn't useful unless it can be used to get funding. And it really doesn't matter how much time this person has spent on it since the plan isn't likely to survive first contact with the market. What is needed is the hard work of building the product and iterating it again and again while getting users and traffic.<p>On the other hand, taking the initiative to get a project off the ground is actually worth quite a bit. But that work doesn't stop with handing a business plan over to someone else to execute.
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aspir将近 14 年前
I'm a contracted business plan and grant writer on the side as I work at a startup. I've also entered and placed in / won a few national biz plan competitions in multiple industries (biotech, pharma, semicon, ren. energy, B2C software, B2B software) so I feel like I may be able to gauge this.<p>Odds are strong that your plan, if in the consumer space, is already outdated. Unless you have real, long-lasting IP (not just 'patent pending', but literally a process that is revolutionary and incredibly hard to reverse engineer, typical with university tech) the market has likely shifted away from your assumptions. Unless this is true, the business plan is only worth the paper and ink it's printed on.<p>That said, if you have been able to secure the first partnership, funding, or start carrying out the actual plan, you have something much more valuable than 30 bound pages and a spreadsheet. That deserves equity, and a lot of it.<p>Also, and I apologize if this sounds rude, 2 years of writing a biz plan is about 15-18 months too long. I can bang out a complete draft sans graphics in ~4 weekends. Any more time that that, and I get into the "law of diminishing returns" space. Whatever you do, don't rewrite it -- you've already sunk enough time into it. Fundraise full time, line up partners, presell the product with your next time period, but another day tweaking that plan is another day lost.<p>For the record -- I'm not a fan of writing business plans at all, but it pays the bills, and organizations are happy to write me big checks so they don't have to write them either. Some big industries require them (bio, semicon, green energy), but those same players also want ironclad IP, so its a completely different world than the modern web space.
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Travis将近 14 年前
Depends on the business plan ;).<p>If the plan is excellent, and actually describes the problem, solution, and route to profit, then it's probably worth a lot.<p>However, if it's like most business plans that I've written or read, then it's probably not accurately describing the problem. A ton can change in a market in 2 years, so I would guess that parts of that plan are pretty out of date.<p>I probably wouldn't ever assign more than 5-10% of a business' value (equity, here) to the b-plan. That would be for a world class, how-could-we-not-have-seen-this, b-plan.
nickh将近 14 年前
I realize that I didn't include much information, so I've added more details to the question.