While we all would like to think that the submission process of your business plan to an outside funding source is a straight forward process - it is not.  Often times for outside funding sources, "time" is the most limited resource and not capital. When a business plan is submitted by a trusted referral source, someone that knows the kinds of deals they look for, the chances are increased significantly that the business plan will be reviewed in a more detailed fashion.  When one receives many unsolicited Executive Summaries and Business Plans, they need to quickly determine which opportunities they will focus their attention on, schedule follow up meetings and visits.  Very few Business Plans will address all initial concerns of the outside investors, but savvy investors will use the person making the introduction to get clarifications.  While there are a lot of consultants, accountants, and lawyers that can do the work of preparing the business plan, look for ones that can also make the introductions to funding sources.

As mentioned before, time is most often the most limited resource for an Angel, VC or Private Equity investor, so when a business plan is reviewed in detail, and short comings are not addressed head on (i.e. gaps in the management team, legal issues, poor distribution channels, unrealistic assumptions or milestones, etc.) it leaves a poor impression of the management team and damages their credibility.  This is magnified the later the shortcomings are revealed in the due diligence process.   Ideally, a company will have cleaned up the problem areas before going to outside investors, but at a minimum they should be addressed in the business plan and never intentionally hidden.