Lei Jun’s Unread Hundred-Page Business Plans: Explain the Big Opportunity in Five Minutes

11. What really moves investors? VCs do not like reading business plans. Lei Jun says he rarely reads them, and bluntly adds that most VCs do not either. This may contradict business-school teaching. When building Joyo, he spent at least three months producing hundreds of beautifully printed Chinese–English business-plan pages and visited dozens of investors without securing funding, nearly despairing. His message: this really does not work. First, VCs are busy and assume you have made these things up. A reliable person’s recommendation and credibility are decisive in investment. Once interested in investing, they will request materials or a simple introduction. Explain the company’s stage and the issues investors care about, especially the founding team. Many presentations I see barely introduce the team; some omit it, while others offer one overly simple page. Think carefully: we usually allow about an hour to review an opportunity. Fundamentally, we invest in people. Five minutes can explain your partners, and that is critically important. Introduce people who increase confidence in your ability and credibility. Lei Jun sees the team introduction as essential. Second, explain clearly and concisely what you intend to do. If twenty pages still cannot explain it, the situation is hopeless. Successful companies tend to have simpler businesses, explainable in one or two sentences. If a few sentences cannot do it, perhaps the business is too complex or your thinking insufficiently clear. Some people follow bad advice—obviously they have not read Robin’s Facing Entrepreneurship page, XD—and dress things up in Web 3.0, metaverse, and other new terms. That says virtually nothing. Avoid fashionable words that leave listeners unsure what you do. Explain it simply in a few sentences. That matters enormously. Third, credibly describe the opportunity five to ten years ahead and how large the company could become if all necessary conditions were met. Think repeatedly about it. VCs are not afraid your dream is too large; they fear it is too small. #LeiJunsEntrepreneurshipLessons ---- Robin’s turn again: 1. I keep emphasizing: get a reliable personal introduction; get a reliable personal introduction; get a reliable personal introduction. The introducer should be willing to invest personally; willing to invest personally; willing to invest personally. 2. Sometimes you must create opportunities by introducing yourself, but do not send business plans everywhere indiscriminately. That turns your venture into marketplace gossip. 3. Explain what you do in the first three minutes; do not exceed five. Put the most important points first. 4. Do not dress the business up in fancy terms: AI, blockchain, cryptocurrency, Web 3.0, metaverse, SaaS, and so on.