In this fast paced Internet & SaaS bus. dev. environment, is the business plan obsolete?

Photo by Steve Jurvetson.

With Internet Start-ups growing exponentially, like rockets heading for the Ionosphere… warp-speed to Hundreds-of-Millions of users and Billions-of-Dollars in value and revenues… do these “Rock-Star” Technology Company Development gurus still need a fully developed business plan to slow them down… Sort of  ”nail their foot to the floor”?  Why should they have to take the time and spend some of their early seed-money to prepare such a limiting and cumbersome document ?  Some will tell you,  ”It’s out of date the moment it hits the printer tray”.

Recent reports:

There are so many large successful companies looking for the next “Strategic buy” and Ventures around with “Tons of money” just waiting to pour it into the next Tech. Superstar; others report that “Angel money” is drying up or laying low.  Both assessments are probably fairly accurate.

Are those cash-laden strategic business’ and institutional investors even bothering to ask for full-featured, financially sound business projections?

And the Angels:  Are they investors or just gamblers?  Labeled “Successful” when their “gut is right” more than half the time. Do they want or even need a Business Plan?

We say yes… A well prepared and thorough business plan is necessary to make an investment. If someone wants to gamble, then they do not need or probably will not want to bother reading and evaluating a business model. Some we know want both the Business Plan with fully developed “substantial financial projections”.

What do you think?  Please take a moment to tell us what you think.