Using the business model canvas to improve investment processes

Abstract

Purpose-This paper investigates how entrepreneurs market their business opportunities towards business angels in the investment process. This is achieved by introducing the Business Model Canvas as a mitigating framework to help entrepreneurs in communicating and structuring the information desired by business angels. Design/methodology/approach-This paper mobilises a case study approach by following a series of investment processes and investment meetings between entrepreneurs and business angels through 27 semi-structured interviews as well as participant observation and qualitative participant feedback from 13 investment processes. Findings-The findings illustrate how introducing a framework like the business model canvas helps alleviate the informational and communication challenges between entrepreneurs and business angels. However, some problems occurred when the entrepreneurs and the business angels did not fully agree on the value proposition of the investment opportunity. Practical implications-The findings show that entrepreneurs who market their business cases to investors obtain better feedback and a higher chance of funding using the business model canvas. Implications of this paper also relate to the preparation of the entrepreneurs and that matchmakers between entrepreneurs and investors can use the business model canvas to facilitate such processes. Originality/value-This paper contributes to both the theory of the investment process as well as the application of the business model canvas.

Guest editorial

“…Methodology will be discussed further below. Sort et al (2018), in the article "Using the business model canvas to improve investment processes," focused more on communication performance than on financial or survival performance. The authors' interviews revealed that the BMC was a good framework for providing a shared language between entrepreneurs and angel investors.…”

Emerging Business Opportunities Based-On Venture Capital Investment Data in the Fourth Industrial Revolution

“…[45] A new business opportunity may lead firms to subsequent innovation and yield future profitability, but there is obvious uncertainty because the degree of novelty differs greatly among firms and industries. [46] Under this uncertainty, while VC investment has become an increasingly important source of financing for startups and small and mid-sized companies [45,[47][48][49], it is not easy for companies to achieve investments. Companies that like to achieve financial investments often rely on their own business knowledge to market their potential business opportunities.…”

“…Companies that like to achieve financial investments often rely on their own business knowledge to market their potential business opportunities. [45] There are clear differences between business ideas and business opportunities. While business ideas are difficult to share with others because it is often subjective and abstract [50,51], business opportunities are more conceptualized in terms of product or service including target markets.…”

Identificação Do Perfil Empreendedor

“…Essa forma de enxergar o mundo é sustentada pela visão sistêmica que representa um recurso fundamental para o empreendedor, uma forma de mudar do pensamento linear para o holístico e sistêmico. Para tal, a utilização de conceitos, métodos e ferramentas se tornam essenciais aos empreendedores por contribuírem para seu desenvolvimento bem como para a compreensão de estruturas e atividades (Osterwalder & Pigneur, 2011;Kozlowski, Searcy & Bardecki, 2018;Sort & Nielsen, 2018 (Teixeira, 2018).…”