Do I need a business plan to raise money?

Most early-stage founders do not. Unless a specific gatekeeper is asking for one (a bank for a loan, an immigration route for a visa, or an investor who has explicitly requested it), your time and money are better spent on a strong pitch deck. The plan usually just sits in a folder, unread.

Do investors actually read business plans?

Rarely at the early stage. An investor gives a new pitch deck a few minutes to decide whether to take a meeting. A long business plan with a five-year model tends to get filed rather than read, so the deck is where the raise is won or lost.

When do you genuinely need a business plan?

When you are applying for grants or public funding, raising debt or a bank loan, using it for a visa such as the UK Innovator Founder route, raising from Series A onwards or from institutions, or preparing to sell the company. Outside those cases, an early-stage founder rarely needs one.

Do you actually need a business plan to raise money?

Most founders ask me for a business plan with a five-year model. Most of them need a great pitch deck instead. Here is how to tell which one you are.

A little while ago I was on a call with a founder building a technical software product, walking through how he was going to take it to market, and about halfway through he mentioned, almost apologetically, that he did not have a written business plan yet.

I stopped him there, and I told him not to waste his money on one. And I say that as someone who sells business plans for a living, so it is not exactly in my interest to talk anyone out of buying one. But the honest answer, most of the time, is that you do not need one, unless a specific person is actually asking you for it. A bank, if you are going for a loan. An immigration route, if you are using it for a visa. Or an investor who has told you, in so many words, that they want to see one. If none of those are true, the plan just sits in a folder, and you never read it again.

The bit that usually surprises founders is the five-year financial model, because that is the part everyone assumes makes it serious, and it is actually the part I trust the least. Nobody building a company is really planning five years out. You are planning five days out, and five weeks, and maybe five months ahead if you are being disciplined about it, and the number you typed into a spreadsheet cell for year five is the one part of the whole thing you were honestly just dreaming about. Investors know it too, and nobody is going to hold you to the revenue you forecast for 2031.

I spent the early part of my career on the other side of the table, in asset management in London, raising money from pension funds and banks and insurance companies, and for a good four or five years of that my job was putting together investor communications, the decks and the one-pagers and the term sheets. Then I went and helped build a company that we sold to American Express, and since then I have written and designed more decks and plans than I could count. The pattern barely changes. The deck is the thing that gets read, and the plan is the thing that gets filed.

What each document is actually for

A deck is a story with just enough numbers to be credible, and it exists to earn you a conversation. An investor gives a new deck a few minutes at most before deciding whether you are worth a meeting, so those few minutes are where the raise is really won or lost, and that is where your effort belongs.

A business plan is a detailed operational and financial document, and it exists to satisfy someone who is required to do proper diligence before they hand over money or a decision. That is a real job, but it is a different job, and for most early-stage founders it is not the thing standing between them and a cheque.

And the thing a lot of founders miss is that a good deck already forces you to do the hard thinking anyway. Who is this for, why now, why you, how big can it get, and how the money actually comes in. If you can answer those clearly across ten or twelve slides, you have done the valuable part of the plan already, in the form people are actually going to read.

The harder truth is that ideas do not get funded

While we are being honest about it, the deck is not magic either, and neither is the plan, because at the early stage you do not get funded for an idea. I have had two exits and I still would not get funding for an idea. What starts to interest investors is traction, users who come back and use the thing again and again, and no document creates that for you. So if you are pre-traction, the more useful question than deck or plan is often whether you should be raising at all yet, because raising too early usually just means giving away too much of the company for too little.

When you genuinely do need a plan

I am not telling you the business plan is dead, because there are absolutely times when you need a proper one, and it is worth knowing which camp you are in before you spend anything. You usually do need a full plan when:

You are applying for grants or public funding, because the assessors typically require a written plan and real financials and there is no way around it.
You are raising debt or a bank loan, because a lender is not buying the dream, they want to see that you can actually service the borrowing.
You are using it for a visa, because routes like the UK Innovator Founder visa need an endorsed business plan by design.
You are raising from Series A onwards, or from institutions, because the diligence goes deeper than most founders expect, and it comes earlier than they think.
You are selling the company, though that is really a different document again, closer to an information memorandum, and worth doing properly.

If you are in one of those camps, build the plan, and build it well, because a weak one will cost you more than no plan at all. If you are not, you can probably leave it for now.

So what should you do first

If you are an early-stage founder raising from angels or early VCs, put your time and your money into the deck first. Get the story right, get the numbers tight enough to survive a smart question, and only build the full plan when a specific gatekeeper actually asks you for one.

And if you genuinely are not sure which camp you are in, that is exactly the kind of thing worth talking through before you spend a penny, because the worst outcome is that you pay for the wrong document and it goes straight into that folder.

Build the thing people are actually going to read.