So Don Dodge has a post today questioning whether or not Business Plans have any purpose anymore. I'm just as stumped as everyone else in regards to the Twitter deal, but like most others I don't actually use it. Don makes some great points, especially in regards to the people making the business worth investing in rather than the business plan (or even the idea). What I think he is missing is that the VCs do want something to hold in their hands, even if they will nitpick it. The Deck format I mentioned in my earlier post is a great hybrid approach I think and something I'm surprised entrepreneurs don't use more often.
The Deck business plan basically gives you a short document, written in power point with the main details of your business and why you think it will succeed. One could argue that printing the slides to the presentation is enough but the Deck is a lot more than just printed out slides. First of all, you are getting the advantage of a nice looking format that is consistent with your PowerPoint slides. Second, each slide of the Deck may follow a similar format as your presentation but will convey much more detail such as things you may talk about but don't actually list on your slides. Third, it gives the VC the assurance that although they aren't looking at a 50 page plan, you have done your homework. Finally, although it may give them something to nitpick it gives them an overview of your idea for later reference so they can pay attention to your talk rather than take copious notes for later review.
Obviously in the case of a company like Twitter, this might have actually been a bad thing since they have no business model and no idea of how they are going to generate revenue. Once all of these social networking fads have faded away and we have more stability in the market, new businesses will have to be more thorough when pitching a new idea for funding. Right now it seems like all you need is a high user base and buzz factor and you'll get money thrown at your business.
Market research and a good business plans are not gone, the presentation need some tweaking and I think thats where the Deck and other visually appealing presentation formats can be leveraged.