# New Venture Launch Plan: [Venture name, founders and start date]

> A working plan that takes a new venture from a chosen opportunity to the end of its first 18 months: the
> opportunity statement, the founding team and its agreements, a register of the hypotheses the venture must test,
> the customer discovery plan, the business model, the minimum viable product (MVP) and experiments, unit economics,
> an 18-month operating and cash plan with milestones, the financing plan, the legal set-up checklist, hiring,
> decision gates with pivot or stop criteria, a risk register and the reporting routine. It is for MBA students in a
> new venture or launch course, founders on an accelerator or school venture programme, and search or corporate
> venture teams who need a disciplined first 18 months. The worked example follows Mallowpine Labs, a fictional
> software start-up for independent pharmacies, with every number computed in Python. Source basis: entrepreneurship
> research on opportunity (Shane and Venkataraman 2000), effectuation (Sarasvathy 2001), discovery-driven planning
> (McGrath and MacMillan 1995), experimentation (Kerr, Nanda and Rhodes-Kropf 2014; Camuffo, Cordova, Gambardella and
> Spina 2020) and lean start-up practice (Blank 2013), written in original words. Replace every [bracketed] value and
> every row marked *Example*. This is a planning aid, not legal, tax, investment or financial advice.

<!--
Guidance: How to use this template
- Start when you have chosen one opportunity. If you are still comparing ideas, use mba/mba-opportunity-assessment-card
  first and come back with the winner.
- Fill sections 1 to 4 in the first week: they decide what the next 18 months are for. Every later section refers to
  hypothesis IDs (HYP-NNN) from section 4, so the plan stays a test plan and not a wish list.
- Update sections 9, 13 and 14 every month, and the whole plan at each decision gate. Keep old versions: the change
  between versions is the best record of what you learned.
- The worked example rows are marked *Example*. Replace them with your own numbers, but keep the structure: a plan
  without a cash table and stop criteria is a pitch, not a plan.
- Every number in the Mallowpine example was computed in Python (calc script kept with the library sources); Excel
  formulas are shown next to the results.
- Related templates: mba/mba-entrepreneurship-guide, mba/mba-opportunity-assessment-card,
  mba/mba-venture-finance-cap-table-card, mba/mba-vc-method-card, mba/mba-term-sheet-card,
  mba/mba-customer-lifetime-value-card, mba/mba-pricing-card, mba/mba-marketing-experiments-card,
  mba/mba-business-law-guide, mba/mba-compensation-design-card, mba/mba-negotiation-planner,
  startup/customer-discovery, startup/pitch-outline, startup/investor-update, startup/board-deck, startup/pivot-memo,
  startup/mvp-experiment-plan, startup/financial-projections, startup/fundraising-tracker, startup/hiring-plan,
  startup/founders-agreement-outline, startup/data-room-index, business/lean-canvas,
  business/value-proposition-canvas, finance/unit-economics-analysis, finance/13-week-cash-flow-forecast,
  legal-lite/privacy-policy, legal-lite/terms-of-service, legal-lite/nda.
-->

## Document control

<!-- Guidance: One plan per venture. Share sections 1 to 10 with advisers and investors; keep the founder discussions in section 3 private if needed. -->

| Field | Value |
|---|---|
| Document ID | NVP-[YYYY]-001 |
| Venture | [Working name] |
| Founders and roles | [Name, role], [Name, role] |
| Programme or course | [Course, accelerator or venture programme, if any] |
| Plan start (month 1) | YYYY-MM |
| Current stage gate | [G0 Opportunity / G1 Problem / G2 Solution / G3 Pilot / G4 Repeatable sales] |
| Version | [0.1] |
| Status | [Draft / Agreed by founders / Shared with advisers] |
| Owner | [@owner] |
| Reviewed by | [Adviser, faculty mentor, investor] |
| Last updated | YYYY-MM-DD |
| Classification | Confidential: founders and named advisers |

## Contents

1. Purpose and how the plan works
2. Opportunity statement
3. Founding team, roles and agreements
4. Hypotheses register
5. Customer discovery plan
6. Business model
7. MVP and experiments
8. Unit economics
9. 18-month operating and cash plan
10. Financing plan
11. Legal and administrative set-up
12. Hiring plan
13. Metrics, decision gates and pivot or stop criteria
14. Risk register
15. Governance and reporting
16. Quality checklist
17. Common mistakes

## 1. Purpose and how the plan works

<!-- Guidance: The plan is a sequence of bets. Each stage gate asks whether the evidence justifies the next, larger bet. Write the gates before you spend money, so the evidence decides and not the sunk cost. -->

A new venture faces uncertainty that a conventional business plan hides. McGrath and MacMillan (1995) proposed
discovery-driven planning: write down the assumptions the plan rests on, test the most important ones first and
cheaply, and commit more resources only as assumptions turn into knowledge. Kerr, Nanda and Rhodes-Kropf (2014)
describe entrepreneurship itself as experimentation whose cost determines which ideas get tried; Camuffo and
colleagues (2020) found in a randomised trial that start-ups trained to treat their ideas as hypotheses and test them
made better decisions, including stopping or pivoting earlier. Sarasvathy (2001) adds that expert entrepreneurs often
start from the means they control and the loss they can afford, and build the market with early partners rather than
predicting it.

This plan puts those ideas into one working document. It runs for 18 months from the first customer interview,
because that is about the time a focused team needs to move from an idea to evidence of repeatable sales, and about
the time a first small funding round must last. It is organised around five stage gates:

```mermaid
flowchart LR
    G0["G0 Opportunity chosen: months 0 to 1"] --> G1["G1 Problem validated: month 3"]
    G1 --> G2["G2 Solution validated with an MVP: month 6"]
    G2 --> G3["G3 Paying pilots work: month 12"]
    G3 --> G4["G4 Repeatable sales and seed round: month 18"]
    G1 -.->|"Evidence fails"| P["Pivot or stop (section 13)"]
    G2 -.->|"Evidence fails"| P
    G3 -.->|"Evidence fails"| P
    P -.->|"New hypothesis"| G1
```

| Gate | Question the gate answers | Evidence required (set your own thresholds) | Money committed if passed |
|---|---|---|---|
| G0 | Is this the opportunity we will work on? | Opportunity assessment scored; founders agree on section 2 | Founders' time and a small budget |
| G1 | Do target customers have the problem, and do they care enough to pay? | Interview evidence against HYP-001 to HYP-003 | Pre-seed round and MVP build |
| G2 | Does our solution solve it well enough that customers use it? | MVP usage and pilot agreements against HYP-004 to HYP-006 | Launch spending and first hires |
| G3 | Will customers pay, stay and can we acquire them at a sensible cost? | Paid pilots, retention, early CAC against HYP-007 to HYP-009 | Sales and marketing scale-up |
| G4 | Is growth repeatable enough to raise a seed round on good terms? | Unit economics and pipeline against section 8 thresholds | Seed round and team growth |

## 2. Opportunity statement

<!-- Guidance: Write it so that a stranger could say whether a given customer is in or out of your target. Vague segments make discovery impossible. -->

Shane and Venkataraman (2000) define the field of entrepreneurship as the study of how opportunities to create future
goods and services are discovered, evaluated and exploited, and by whom. Your opportunity statement records your
answer for this venture.

| Element | Our answer |
|---|---|
| Target customer (who exactly) | [Segment, size, location, decision maker] |
| Problem (in the customer's words) | [Problem] |
| Current alternatives and why they fall short | [Alternatives] |
| Proposed solution (one sentence) | [Solution] |
| Why now (technology, regulation, behaviour change) | [Trigger] |
| Why us (insight, access, skills) | [Founder-market fit] |
| Size of the prize (bottom-up market estimate) | [Number of customers x price x share, with source] |
| What we will not do in the first 18 months | [Exclusions] |

*Example:* Mallowpine Labs (fictional) targets independent community pharmacies with one to three sites in English-
speaking markets. The problem in their words: "We lose money on stock that expires and on stock-outs of fast movers,
and the wholesaler's ordering screen does not help." Current alternatives are the wholesaler's ordering portal,
spreadsheets and the pharmacy management system's basic reorder points. The solution is demand forecasting and order
suggestions as a subscription at USD 350 a month per site. Why now: pharmacy management systems increasingly offer
data export and interfaces, and margins on dispensing have tightened. Why us: one founder worked as a pharmacy
operations manager, the other built forecasting models in retail. In the first 18 months Mallowpine will not serve
chains, hospitals or wholesalers.

## 3. Founding team, roles and agreements

<!-- Guidance: Most early start-up failures that founders describe are team failures. Agree roles, decision rights, equity and vesting now, while everyone is optimistic. -->

Wasserman (2012) documents the founders' dilemmas: whether to found alone or with others, how to split equity and
roles, and when to give up control for resources. Decide them explicitly and record them in a founders' agreement
(`startup/founders-agreement-outline`) reviewed by a lawyer.

| Topic | Agreement | Status |
|---|---|---|
| Roles and decision rights | [Who decides product, sales, hiring, spending, and how ties are broken] | [Open / Agreed] |
| Time commitment | [Full time from YYYY-MM; any other commitments disclosed] | [ ] |
| Equity split and reasoning | [Split, and the contributions it reflects] | [ ] |
| Vesting | [Schedule, cliff, acceleration] | [ ] |
| Intellectual property | [All founders assign venture-related IP to the company] | [ ] |
| Departure | [What happens to unvested and vested equity if a founder leaves] | [ ] |
| Salaries and expenses | [When founders draw pay, and how much] | [ ] |
| Disputes | [Process: discussion, mentor, mediation] | [ ] |

*Example:* Mallowpine's two founders split equity 50:50, vesting over four years with a one-year cliff, and assign
all venture IP to the company at formation. Founder A leads product and data; founder B leads customers, sales and
finance. Spending above USD 10,000 needs both.

## 4. Hypotheses register

<!-- Guidance: List every assumption the plan depends on, rank it by importance and uncertainty, and test the riskiest first. Each hypothesis needs a test, a threshold and a date, or it is not a hypothesis. -->

| ID | Hypothesis | Type | Importance (1 to 5) | Uncertainty (1 to 5) | Test (section) | Pass threshold | Decide by |
|---|---|---|---|---|---|---|---|
| HYP-001 *(Example)* | Independent pharmacy owners rank stock losses among their top three operating problems | Problem | 5 | 3 | Interviews (5) | At least 12 of 20 owners rank it top three | Month 2 |
| HYP-002 *(Example)* | Owners can quantify the loss and estimate it above USD 1,000 a month | Problem, value | 5 | 4 | Interviews with data request (5) | Median estimate above USD 1,000 in at least 10 interviews | Month 3 |
| HYP-003 *(Example)* | The buyer is the owner, who can sign up to USD 500 a month without outside approval | Customer | 4 | 3 | Interviews (5) | At least 15 of 20 confirm | Month 3 |
| HYP-004 *(Example)* | We can extract sales and stock data from the two most common pharmacy systems | Feasibility | 5 | 4 | Technical spike (7) | Daily data from both systems for 5 pilot sites | Month 5 |
| HYP-005 *(Example)* | Pharmacists accept at least 60% of suggested order lines | Solution | 5 | 4 | MVP pilot (7) | At least 60% acceptance over four weeks | Month 6 |
| HYP-006 *(Example)* | Expired-stock write-offs fall by at least 20% in pilot sites | Value | 5 | 5 | Pilot measurement (7) | At least 20% fall against the prior year, same months | Month 9 |
| HYP-007 *(Example)* | At least 8 of 10 pilot sites convert to paid at USD 350 a month | Willingness to pay | 5 | 4 | Paid conversion (7) | 8 of 10 | Month 9 |
| HYP-008 *(Example)* | Monthly churn stays at or below 2% | Retention | 4 | 4 | Cohort tracking (8, 13) | At or below 2% over months 10 to 15 | Month 15 |
| HYP-009 *(Example)* | Customer acquisition cost stays at or below USD 4,200 per site | Acquisition | 4 | 5 | Channel tests (7, 8) | Blended CAC at or below 4,200 over two quarters | Month 15 |
| [HYP-010] | [Hypothesis] | [Type] | [ ] | [ ] | [ ] | [ ] | [ ] |

## 5. Customer discovery plan

<!-- Guidance: Discovery tests the problem before the solution. Ask about past behaviour and real numbers, not opinions about your idea. Record each interview the same day with startup/customer-discovery. -->

Customer discovery, as Blank (2013) describes it, means leaving the building to test the business model's hypotheses
with customers before building much. The plan below sets the targets; the interview guide and log live in
`startup/customer-discovery`.

| Item | Plan |
|---|---|
| Hypotheses tested | [HYP-001 to HYP-003] |
| Number of interviews and mix | [20 owners, 5 pharmacy staff, 3 wholesaler reps, 2 system vendors] |
| Recruiting channels | [Professional associations, warm introductions, local visits] |
| Interview guide | [Link to startup/customer-discovery] |
| Evidence collected | [Notes, problem ranking, loss estimates, data samples with consent] |
| Synthesis method | [Count against thresholds; quote bank; patterns by segment] |
| Personal data handling | [Consent, storage, deletion date, privacy notice (legal-lite/privacy-policy)] |
| Decision date | [Month 3, gate G1] |

*Example* synthesis at month 3: 20 owner interviews; 14 ranked stock losses among their top three problems (HYP-001
passed); 11 gave a monthly loss estimate above USD 1,000, with a median of USD 1,600 (HYP-002 passed); 16 said they
could sign up to USD 500 a month alone (HYP-003 passed). Unexpected finding: 6 owners worried more about stock-outs of
fast movers than about expiries, so the MVP measures both.

## 6. Business model

<!-- Guidance: Summarise the model on one page and mark each element with the hypothesis that tests it. Use business/lean-canvas or business/value-proposition-canvas for the full canvas. -->

| Element | Our answer | Hypothesis |
|---|---|---|
| Customer segment | [Segment] | [HYP-] |
| Problem and current alternatives | [Problem] | [HYP-] |
| Value proposition | [Outcome promised, in the customer's measure] | [HYP-] |
| Solution (first version) | [Core features] | [HYP-] |
| Channels | [How customers find, buy and start] | [HYP-] |
| Revenue model and price | [Subscription, usage, one-off; price point] | [HYP-] |
| Cost structure | [Main fixed and variable costs] | [HYP-] |
| Key metrics | [The few numbers that show progress] | Section 13 |
| Unfair advantage | [What competitors cannot copy or buy quickly] | [HYP-] |

*Example:* subscription at USD 350 a month per site; channel through direct sales to owners, a pharmacy association
partnership and referrals; gross margin of 80% after hosting, data interfaces and support; key metrics are paid
sites, monthly churn, CAC and order-line acceptance.

## 7. MVP and experiments

<!-- Guidance: The MVP is the smallest thing that tests the riskiest remaining hypotheses with real behaviour. Define each experiment before it starts, with its threshold, so the result cannot be argued away. Use startup/mvp-experiment-plan for the detailed design. -->

| ID | Experiment | Hypotheses | Design | Sample and duration | Pass threshold | Cost | Result |
|---|---|---|---|---|---|---|---|
| EXP-001 *(Example)* | Data extraction spike | HYP-004 | Connect to two pharmacy systems in test mode | 5 sites, 3 weeks | Daily data from both systems | USD 8,000 | [ ] |
| EXP-002 *(Example)* | Concierge MVP: founders send order suggestions by email | HYP-005 | Forecast in a notebook, suggestions emailed weekly | 5 sites, 4 weeks | At least 60% of lines accepted | USD 2,000 | [ ] |
| EXP-003 *(Example)* | Product MVP pilot | HYP-005, HYP-006 | Web app with daily suggestions | 10 sites, 12 weeks | 60% acceptance; write-offs down 20% | USD 60,000 | [ ] |
| EXP-004 *(Example)* | Paid conversion | HYP-007 | Pilot ends; offer at USD 350 a month | 10 sites | 8 of 10 convert | USD 0 | [ ] |
| EXP-005 *(Example)* | Channel tests | HYP-009 | Association webinar, local field visits, referral offer | 3 channels, 2 quarters | Blended CAC at or below USD 4,200 | USD 40,000 | [ ] |
| [EXP-006] | [Experiment] | [HYP-] | [Design] | [ ] | [ ] | [ ] | [ ] |

For each experiment, write down before it starts what you will do if it passes and what you will do if it fails.
Experiments with no decision attached are research, not tests (`mba/mba-marketing-experiments-card` covers sample
size and noise).

## 8. Unit economics

<!-- Guidance: Unit economics tell you whether growth creates or destroys value. Compute them from pilot data as soon as you have it, and label every input as measured or assumed. finance/unit-economics-analysis has the full method. -->

For a subscription business with monthly price $p$, gross margin $m$, monthly churn $\chi$, monthly discount rate $i$
and customer acquisition cost $CAC$:

$$
\text{Contribution per month} = p \cdot m \qquad \text{Expected lifetime} = \frac{1}{\chi} \qquad
LTV = \frac{p \cdot m}{\chi + i} \qquad \text{Payback} = \frac{CAC}{p \cdot m}
$$

| Symbol | Meaning | Note |
|---|---|---|
| $p$ | Price per customer per month | Net of discounts |
| $m$ | Gross margin | After hosting, data, support and payment costs |
| $\chi$ | Monthly churn | Share of customers lost each month |
| $i$ | Monthly discount rate | Set $i = 0$ for the undiscounted figure |
| $CAC$ | Customer acquisition cost | All sales and marketing spend divided by new customers in the period |
| $LTV$ | Lifetime value of contribution | Not revenue: use contribution |

*Example* (Mallowpine, assumptions to be replaced by pilot data):

| Item | Computation | Result | Excel |
|---|---|---|---|
| Contribution per month | 350 x 80% | USD 280 | `=350*80%` |
| Expected lifetime at 2% monthly churn | 1 / 2% | 50 months | `=1/2%` |
| LTV, undiscounted | 280 / 2% | USD 14,000 | `=280/2%` |
| LTV, discounted at 1% a month | 280 / (2% + 1%) | USD 9,333 | `=280/(2%+1%)` |
| CAC | Assumed (HYP-009) | USD 4,200 | |
| Payback | 4,200 / 280 | 15 months | `=4200/280` |
| LTV / CAC, undiscounted | 14,000 / 4,200 | 3.33 | `=14000/4200` |
| LTV / CAC, discounted | 9,333 / 4,200 | 2.22 | `=9333.33/4200` |

Read the ratios with care. An LTV-to-CAC ratio near 3 is often quoted as healthy for subscription businesses, but it
is a rule of thumb, not a standard, and the discounted figure here is 2.22. A 15-month payback means each new
customer consumes cash for over a year, so faster growth increases the cash need (section 9). The two inputs that
move the answer most are churn and CAC, which is why HYP-008 and HYP-009 decide gate G4. `mba/mba-customer-lifetime-value-card`
covers cohort-based LTV, and `mba/mba-pricing-card` covers how to test the price.

## 9. 18-month operating and cash plan

<!-- Guidance: Build the plan month by month from drivers (customers, price, churn, team costs), not from a revenue target. Update actuals monthly and keep the original plan beside them. finance/13-week-cash-flow-forecast is the tool once cash is tight. -->

*Example* drivers: operating spending (team, tools, hosting, sales and marketing) of USD 45,000 a month in months 1
to 3, 70,000 in months 4 to 6, 110,000 in months 7 to 12 and 150,000 in months 13 to 18; new paid sites 4 a month in
months 7 to 9, 8 in months 10 to 12, 14 in months 13 to 15 and 20 in months 16 to 18; churn 2% a month; price USD 350;
gross margin 80%. Funding: founders USD 100,000 in month 1, a pre-seed SAFE of USD 1,500,000 closing in month 3 and a
seed round of USD 4,000,000 closing in month 15. Paid sites are expected values after churn, so they show one
decimal.

| Month | New sites | Paid sites | Revenue | Gross profit | Operating spending | Net burn | Closing cash |
|---|---|---|---|---|---|---|---|
| 1 | 0 | 0.0 | 0 | 0 | 45,000 | 45,000 | 55,000 |
| 2 | 0 | 0.0 | 0 | 0 | 45,000 | 45,000 | 10,000 |
| 3 | 0 | 0.0 | 0 | 0 | 45,000 | 45,000 | 1,465,000 |
| 4 | 0 | 0.0 | 0 | 0 | 70,000 | 70,000 | 1,395,000 |
| 5 | 0 | 0.0 | 0 | 0 | 70,000 | 70,000 | 1,325,000 |
| 6 | 0 | 0.0 | 0 | 0 | 70,000 | 70,000 | 1,255,000 |
| 7 | 4 | 4.0 | 1,400 | 1,120 | 110,000 | 108,880 | 1,146,120 |
| 8 | 4 | 7.9 | 2,772 | 2,218 | 110,000 | 107,782 | 1,038,338 |
| 9 | 4 | 11.8 | 4,117 | 3,293 | 110,000 | 106,707 | 931,631 |
| 10 | 8 | 19.5 | 6,834 | 5,467 | 110,000 | 104,533 | 827,098 |
| 11 | 8 | 27.1 | 9,498 | 7,598 | 110,000 | 102,402 | 724,696 |
| 12 | 8 | 34.6 | 12,108 | 9,686 | 110,000 | 100,314 | 624,382 |
| 13 | 14 | 47.9 | 16,765 | 13,412 | 150,000 | 136,588 | 487,795 |
| 14 | 14 | 60.9 | 21,330 | 17,064 | 150,000 | 132,936 | 354,859 |
| 15 | 14 | 73.7 | 25,804 | 20,643 | 150,000 | 129,357 | 4,225,502 |
| 16 | 20 | 92.2 | 32,287 | 25,830 | 150,000 | 124,170 | 4,101,332 |
| 17 | 20 | 110.4 | 38,642 | 30,913 | 150,000 | 119,087 | 3,982,245 |
| 18 | 20 | 128.2 | 44,869 | 35,895 | 150,000 | 114,105 | 3,868,140 |

Month 7 in Excel: paid sites `=B6*(1-2%)+4` = 4.0; revenue `=4*350` = 1,400; gross profit `=1400*80%` = 1,120; net
burn `=110000-1120` = 108,880; closing cash `=1255000-108880` = 1,146,120. Total net burn over 18 months is USD
1,731,861, and monthly recurring revenue reaches USD 44,869 in month 18 (USD 538,428 a year).

```vega-lite
{
  "$schema": "https://vega.github.io/schema/vega-lite/v5.json",
  "description": "Mallowpine Labs closing cash by month, USD thousand, with and without the month 15 seed round, computed example",
  "width": 440,
  "height": 240,
  "data": {
    "values": [
      {"month": 1, "case": "With seed", "cash": 55.0}, {"month": 2, "case": "With seed", "cash": 10.0},
      {"month": 3, "case": "With seed", "cash": 1465.0}, {"month": 6, "case": "With seed", "cash": 1255.0},
      {"month": 9, "case": "With seed", "cash": 931.6}, {"month": 12, "case": "With seed", "cash": 624.4},
      {"month": 14, "case": "With seed", "cash": 354.9}, {"month": 15, "case": "With seed", "cash": 4225.5},
      {"month": 18, "case": "With seed", "cash": 3868.1},
      {"month": 14, "case": "No seed", "cash": 354.9}, {"month": 15, "case": "No seed", "cash": 225.5},
      {"month": 16, "case": "No seed", "cash": 101.3}, {"month": 17, "case": "No seed", "cash": -17.8},
      {"month": 18, "case": "No seed", "cash": -131.9}
    ]
  },
  "mark": {"type": "line", "point": true},
  "encoding": {
    "x": {"field": "month", "type": "quantitative", "title": "Month"},
    "y": {"field": "cash", "type": "quantitative", "title": "Closing cash (USD thousand)"},
    "color": {"field": "case", "type": "nominal", "title": "Case"}
  }
}
```

Three readings matter more than the totals. First, cash falls to USD 10,000 in month 2: the pre-seed must close on
time, or the founders must cut spending or add their own money. Second, without the seed round the company runs out
of cash in month 17 (closing cash USD -17,755), so the seed process must start by about month 12, when about six
months of cash remain, and the plan needs a fallback (cut spending to the month 7 to 12 level, slow hiring) if the
round is late. Third, the plan assumes CAC is covered inside operating spending: 138 new sites at USD 4,200 would cost
USD 579,600 of the USD 1,560,000 spent in months 7 to 18 (`=138*4200` against `=6*110000+6*150000`), about 37%, which
is plausible for a sales-led product but must be checked against actual spending by channel.

| Milestone | Target month | Evidence | Gate |
|---|---|---|---|
| MS-01 *(Example)* 20 interviews done and synthesised | 3 | Interview log and synthesis | G1 |
| MS-02 *(Example)* Pre-seed closed | 3 | Signed SAFEs, funds received | G1 |
| MS-03 *(Example)* MVP live at 10 pilot sites | 6 | Usage data | G2 |
| MS-04 *(Example)* 8 of 10 pilots paying | 9 | Invoices paid | G3 |
| MS-05 *(Example)* 30 paid sites, churn at or below 2% | 12 | Billing and cohort data | G3 |
| MS-06 *(Example)* Seed process started | 12 | Investor pipeline in startup/fundraising-tracker | G3 |
| MS-07 *(Example)* Seed closed | 15 | Signed documents, funds received | G4 |
| MS-08 *(Example)* About 128 paid sites, blended CAC at or below USD 4,200 | 18 | Billing, spending by channel | G4 |

## 10. Financing plan

<!-- Guidance: Raise enough to reach the next gate with a margin of several months, from investors who fit the stage. Every instrument has terms that matter more than the headline amount; read mba/mba-term-sheet-card before you sign. -->

| Round | Target month | Amount | Instrument | Milestones it funds | Runway it buys |
|---|---|---|---|---|---|
| Founders | 1 | [USD 100,000] | [Ordinary shares] | [Discovery, G1] | [ ] |
| Pre-seed | 3 | [USD 1,500,000] | [SAFE or convertible note or priced round] | [MVP, pilots, G2 and G3] | [ ] |
| Seed | 15 | [USD 4,000,000] | [Priced preferred round] | [Repeatable sales, G4 and beyond] | [ ] |
| Non-dilutive | [ ] | [ ] | [Grants, competitions, revenue-based finance] | [ ] | [ ] |

In US start-up practice, the post-money SAFE (simple agreement for future equity) published by Y Combinator has been
its standard early-stage instrument since 2018, with versions that carry a valuation cap, a discount or a
most-favoured-nation clause (checked on https://www.ycombinator.com/documents on 2026-10-30). Other markets use their
own instruments and templates, such as advance subscription agreements in the UK or convertible loans in parts of
Europe; check what local investors and tax rules expect, with a lawyer.

*Example* dilution, simplified (no option pool top-up at the seed, SAFE converting at its post-money cap):

| Holder | After the pre-seed SAFE converts | After the seed | Computation |
|---|---|---|---|
| Founders | 77.5% | 62.0% | `=77.5%*16/20` |
| Employee option pool | 10.0% | 8.0% | `=10%*16/20` |
| Pre-seed SAFE investors | 12.5% | 10.0% | `=1.5/12` then `=12.5%*16/20` |
| Seed investors | | 20.0% | `=4/(16+4)` |
| Total | 100.0% | 100.0% | |

The SAFE of USD 1.5 million with a USD 12 million post-money cap buys 12.5% (`=1.5/12`). A seed round of USD 4
million at a USD 16 million pre-money valuation gives the seed investors 20% (`=4/20`) and multiplies every earlier
holding by 0.8 (`=16/20`). In practice, investors usually ask for the option pool to be enlarged before the seed,
which dilutes the founders further; `mba/mba-venture-finance-cap-table-card` and `mba/mba-vc-method-card` show the
full mechanics.

## 11. Legal and administrative set-up

<!-- Guidance: This list names the topics, not the answers. The right choices depend on the country, the founders' tax position and the investors' expectations; ask a qualified lawyer and accountant. mba/mba-business-law-guide explains the concepts. -->

| Item | Question to answer | Owner | Status |
|---|---|---|---|
| Legal form and place of incorporation | Which form and jurisdiction fit our investors, tax position and team location? | [ ] | [ ] |
| Founders' agreement and vesting | Is the agreement in section 3 signed and reflected in the share documents? | [ ] | [ ] |
| IP assignment | Have founders, employees and contractors assigned venture IP to the company in writing? | [ ] | [ ] |
| Trade marks and domain | Is the name clear to use and registered in the launch markets? | [ ] | [ ] |
| Customer contracts | Do terms of service, data processing terms and a liability cap exist before the first pilot (`legal-lite/terms-of-service`)? | [ ] | [ ] |
| Personal and health-related data | Which data protection rules apply, and do pilots process sensitive data (`legal-lite/privacy-policy`)? | [ ] | [ ] |
| Sector regulation | Does the product fall under any sector rules (for Mallowpine, pharmacy and medicines rules)? | [ ] | [ ] |
| Employment and contractors | Are workers correctly classified, and do contracts include confidentiality and IP terms? | [ ] | [ ] |
| Confidentiality with partners | Are NDAs in place where needed (`legal-lite/nda`)? | [ ] | [ ] |
| Tax registrations and accounting | Which registrations are needed, and who keeps the books? | [ ] | [ ] |
| Banking, insurance and signing authority | Who can sign and pay, and what insurance is needed? | [ ] | [ ] |
| Data room | Are documents kept ready for investors (`startup/data-room-index`)? | [ ] | [ ] |

## 12. Hiring plan

<!-- Guidance: Hire for the next gate, not for the company you hope to be. Each hire should unlock a milestone in section 9. Use startup/hiring-plan for role profiles and mba/mba-compensation-design-card for pay and equity. -->

| Role | Month | Milestone it unlocks | Cash cost a month | Equity range | Status |
|---|---|---|---|---|---|
| [Founding engineer] *(Example)* | 4 | MS-03 MVP live | [ ] | [ ] | [ ] |
| [Customer success lead] *(Example)* | 9 | MS-05 retention | [ ] | [ ] | [ ] |
| [Account executive] *(Example)* | 12 | MS-08 growth | [ ] | [ ] | [ ] |
| [Role] | [ ] | [ ] | [ ] | [ ] | [ ] |

Check that every hire in this table is inside the operating spending of section 9, and that the equity ranges fit
the option pool in section 10.

## 13. Metrics, decision gates and pivot or stop criteria

<!-- Guidance: Write the stop criteria now, while you are objective. At each gate, compare evidence with thresholds and record the decision and the reason in the gate log. startup/pivot-memo records a pivot. -->

| Metric | Definition | Target by month 12 | Target by month 18 | Actual |
|---|---|---|---|---|
| Paid sites | Sites with a paid subscription at month end | [30] | [128] | [ ] |
| Monthly churn | Sites lost in the month / sites at start of month | [At or below 2%] | [At or below 2%] | [ ] |
| Blended CAC | Sales and marketing spend / new paid sites, rolling quarter | [Measured] | [At or below USD 4,200] | [ ] |
| Order-line acceptance | Suggested lines accepted / suggested lines | [At least 60%] | [At least 65%] | [ ] |
| Net burn and runway | Monthly net burn; months of cash left | [Runway at least 6 months] | [Runway at least 18 months] | [ ] |

**Pivot or stop criteria (agreed by the founders on YYYY-MM-DD).**

| ID | Trigger | Decision |
|---|---|---|
| STOP-01 *(Example)* | Fewer than 8 of 20 owners rank the problem in their top three (HYP-001) | Stop this segment; test another segment from the opportunity assessment |
| STOP-02 *(Example)* | Order-line acceptance below 40% after two MVP iterations (HYP-005) | Pivot the solution, for example to expiry alerts only |
| STOP-03 *(Example)* | Fewer than 5 of 10 pilots pay (HYP-007) | Pivot price or segment before any hiring |
| STOP-04 *(Example)* | Blended CAC above USD 7,000 for two quarters (HYP-009) | Pause sales hiring; test a partner channel |
| STOP-05 *(Example)* | Runway below 6 months with no term sheet | Cut spending to reach 12 months of runway |

| Gate log | Date | Evidence against thresholds | Decision | Reason |
|---|---|---|---|---|
| G1 *(Example)* | YYYY-MM-DD | HYP-001 14/20, HYP-002 11 above 1,000, HYP-003 16/20 | Pass | All thresholds met; stock-out finding added to MVP scope |
| [G2] | [ ] | [ ] | [ ] | [ ] |

## 14. Risk register

<!-- Guidance: Keep the register short and alive. Each risk needs an owner and an action that changes the score, reviewed monthly. -->

| ID | Risk | Likelihood (1 to 5) | Impact (1 to 5) | Score | Response | Owner | Review |
|---|---|---|---|---|---|---|---|
| RSK-001 *(Example)* | Pharmacy system vendors restrict data access | 3 | 5 | 15 | Partnership talks with both vendors; manual export fallback | Founder A | Monthly |
| RSK-002 *(Example)* | Pre-seed closes late | 3 | 5 | 15 | Start investor meetings in month 1; founders' bridge of USD 50,000 | Founder B | Weekly until closed |
| RSK-003 *(Example)* | Pilot results noisy because of seasonal demand | 4 | 3 | 12 | Compare with the same months of the prior year; extend pilot | Founder A | At G3 |
| RSK-004 *(Example)* | A founder leaves | 2 | 5 | 10 | Vesting, documented roles, monthly founder check-in | Both | Quarterly |
| RSK-005 *(Example)* | Data breach involving pharmacy data | 2 | 5 | 10 | Security baseline, minimal data, incident plan | Founder A | Quarterly |
| [RSK-006] | [Risk] | [ ] | [ ] | [ ] | [ ] | [ ] | [ ] |

## 15. Governance and reporting

<!-- Guidance: A routine set now makes investor reporting easy later. Send updates even when the news is bad: investors help more when they know early. -->

| Routine | Frequency | Audience | Template |
|---|---|---|---|
| Founder check-in: metrics, cash, decisions, relationship | Weekly | Founders | This plan, sections 9 and 13 |
| Plan update and gate review | Monthly, and at each gate | Founders and advisers | This plan |
| Investor update | Monthly or quarterly | Investors | `startup/investor-update` |
| Board or advisory meeting | Quarterly once funded | Board or advisers | `startup/board-deck` |
| Cash forecast | Weekly when runway is below 6 months | Founders | `finance/13-week-cash-flow-forecast` |

## 16. Quality checklist

<!-- Guidance: Run the checklist before each gate and before you send the plan to an investor or a faculty adviser. -->

- [ ] The opportunity statement names a segment specific enough to decide who is in or out.
- [ ] Every important assumption is a hypothesis with a test, a threshold and a date.
- [ ] The riskiest hypotheses are tested first and most cheaply.
- [ ] Interview evidence is recorded the same day and counted against thresholds.
- [ ] Unit economics use contribution, not revenue, and label each input as measured or assumed.
- [ ] The cash plan is built from drivers and shows the month cash runs out without the next round.
- [ ] The fundraising process starts with at least six months of cash left.
- [ ] Every hire unlocks a milestone and fits the cash plan.
- [ ] Stop and pivot criteria were agreed before the evidence came in.
- [ ] The founders' agreement, IP assignment and customer terms are in place before the first pilot.
- [ ] Every number in the plan matches across sections 8, 9 and 10.

## 17. Common mistakes

<!-- Guidance: Read this list at each gate. Most of these mistakes are invisible from inside the team. -->

1. **Building before discovering.** Months of product work before 20 customer conversations is the most common way
   to spend a pre-seed round on the wrong thing.
2. **Asking for opinions instead of evidence.** "Would you use this?" invites politeness. Ask what customers did last
   time the problem occurred and what it cost.
3. **Thresholds set after the results.** A threshold chosen after the data always passes.
4. **Revenue-target planning.** A plan that starts from "USD 1 million by month 18" and works backwards hides the
   drivers that make it true or false.
5. **Ignoring the cash trough.** Long payback periods mean growth consumes cash; the faster you grow, the more you need.
6. **Raising too late.** Rounds take months. Starting with three months of cash left gives investors the power.
7. **Equal everything.** Equal equity and shared decisions on everything feel fair and often fail; agree roles and
   decision rights explicitly.
8. **Hiring ahead of evidence.** Each hire raises burn permanently; hire to unlock a milestone that evidence supports.
9. **Treating the plan as a pitch.** Investors read the plan for judgement: clear assumptions, honest risks and stop
   criteria build more trust than optimism.
10. **Legal set-up as an afterthought.** Missing IP assignments and unclear founder equity are found in investor due
    diligence and delay rounds.

## Sources and further reading

<!-- Guidance: Primary works first, then the official or practice pages for dated facts, then books by name only. -->

Primary works:

- McGrath, R. G., and MacMillan, I. C. (1995). Discovery-driven planning. *Harvard Business Review*, July-August 1995.
- Shane, S., and Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. *Academy of
  Management Review*, 25(1), 217-226.
- Sarasvathy, S. D. (2001). Causation and effectuation: Toward a theoretical shift from economic inevitability to
  entrepreneurial contingency. *Academy of Management Review*, 26(2), 243-263.
- Blank, S. (2013). Why the lean start-up changes everything. *Harvard Business Review*, May 2013.
- Kerr, W. R., Nanda, R., and Rhodes-Kropf, M. (2014). Entrepreneurship as experimentation. *Journal of Economic
  Perspectives*, 28(3), 25-48.
- Camuffo, A., Cordova, A., Gambardella, A., and Spina, C. (2020). A scientific approach to entrepreneurial decision
  making: Evidence from a randomized control trial. *Management Science*, 66(2), 564-586.

Practice pages (checked 2026-10-30):

- Y Combinator, SAFE financing documents, https://www.ycombinator.com/documents.

Books (further reading, by name only): Wasserman, *The Founder's Dilemmas* (Princeton University Press, 2012); Ries,
*The Lean Startup* (2011); Blank and Dorf, *The Startup Owner's Manual* (2012); Maurya, *Running Lean*; Feld and
Mendelson, *Venture Deals*.

Related templates in this library: `mba/mba-entrepreneurship-guide`, `mba/mba-opportunity-assessment-card`,
`startup/customer-discovery`, `business/lean-canvas`, `finance/unit-economics-analysis`,
`mba/mba-venture-finance-cap-table-card`, `mba/mba-term-sheet-card`, `mba/mba-business-law-guide`.

## Revision history

<!-- Guidance: Add a version at every gate. The changes between versions are the record of what the venture learned. -->

| Version | Date | Author | Change |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [Founders] | First plan at G0 |
| [0.2] | YYYY-MM-DD | [Founders] | *Example:* G1 passed; stock-out finding added to MVP scope; pre-seed closed |
| [0.3] | YYYY-MM-DD | [Founders] | [G2 review: pilot results, revised unit economics] |

## Standard and licence note

Structure aligned with published entrepreneurship research and practice on opportunity recognition (Shane and
Venkataraman 2000), effectuation (Sarasvathy 2001), discovery-driven planning (McGrath and MacMillan 1995),
experimentation (Kerr, Nanda and Rhodes-Kropf 2014; Camuffo and colleagues 2020) and customer discovery (Blank 2013),
with the SAFE reference checked on the Y Combinator documents page on 2026-10-30. The text, the plan structure, the
worked example and every number are original; no book, course material or published case is copied or paraphrased,
and Mallowpine Labs, its founders and its customers are fictional. The template is independent and not affiliated
with or endorsed by any accelerator, investor, school or publisher. It is a planning aid, not legal, tax, investment
or financial advice: check current rules and terms with qualified advisers before you form a company, raise money or
sign contracts.
Template licence: MIT.