Final answer:
The typical scope of business plans for founders includes strategies for startup viability and potential success, which helps attract funding sources like angel investors and venture capitalists. Founders often back their business plans by investing their own money, showcasing their commitment and belief in the business.
Step-by-step explanation:
The typical scope of business plans for founders encompasses a strategy that conveys the founders' commitment and vision for their startup firms. As any young startup is a risk, often being little more than an idea on paper, such a business plan plays a crucial role in demonstrating the feasibility and potential for success to investors, such as angel investors and venture capitalists. The founders' investment of their own money is a strong signal of their belief in the prospects of the firm. Angel investors and venture capitalists, in turn, employ strategies to mitigate imperfect information by becoming personally familiar with the managers and by providing guidance based on the firm's business plan.
For many small businesses, the original source of funding is typically the business owner themselves, whether through personal savings or secured loans. In some cases, angel investors may contribute capital early on in exchange for equity, based on their assessment of the business plan and the drive of the founders.