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Milestones for funding new ventures   Notre Dame Nov 13 2013 Mendoza School of Business
 

Milestones for funding new ventures Notre Dame Nov 13 2013 Mendoza School of Business

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Investment readiness Level, Lean Launchpad, Startups early metrics, metrics that matter, Build measure Learn, Traction for funding.

Investment readiness Level, Lean Launchpad, Startups early metrics, metrics that matter, Build measure Learn, Traction for funding.

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    Milestones for funding new ventures   Notre Dame Nov 13 2013 Mendoza School of Business Milestones for funding new ventures Notre Dame Nov 13 2013 Mendoza School of Business Presentation Transcript

    • MILESTONES OF FUNDING NEW VENTURES FOUR TRACTION POINTS THAT INTEREST INVESTORS Prepared for: Funding New Ventures Fall 2013 Mendoza School of Business By Kelly Schwedland kellys@elevateventures.com
    • FOUR TRACTION POINTS 1. 2. 3. 4. Idea Product Business model Expansion
    • A STARTUP IS A TEMPORARY ORGANIZATION DESIGNED TO SEARCH FOR A REPEATABLE AND SCALABLE BUSINESS MODEL
    • INVESTMENT READINESS LEVEL Validate metrics that matter Venture Capital Validate left-side of canvas Prototype High-Fidelity MVP Angel investors Validate right side of canvas Validate Product/Market fit Low Fidelity MVP Experiments Friends and Family Problem/Solution Validation Mkt Size/Competitive analysis Complete first-pass canvas None
    • DREW HOUSTON, CEO DROPBOX
    • DEVELOPING YOUR IDEA How do I get funding at this stage? SWEAT EQUITY Do it yourself (and learn.)
    • DEVELOPING YOUR IDEA GET OUT AND TALK TO POTENTIAL CUSTOMERS Nothing beats a good conversation.
    • DEVELOPING YOUR IDEA Lean Startup Principle: USE FREE/CHEAP RESOURCES AND TEST Examples: Lean Startup Challenges, Startup Weekends, Launchrock, Mock ups, WIX, Code Training, Hackathons, etc.
    • DEVELOPING YOUR IDEA Goal: VALIDATE ASSUMPTIONS FIND POTENTIAL CUSTOMERS
    • DEVELOPING YOUR IDEA What does traction look like? COMMITMENTS Examples: 100 – 1000 possible users/emails, 10-15 potential customers, 2-3 letters of intent, 1 enterprise client MOU
    • CREATING YOUR PRODUCT How do I fund my prototype? ASK THOSE YOU KNOW Get creative. Leverage your network. Reach out to friends, family, customers, Kickstarter, Indiegogo, and similar sources. Tell your story. Make a little go a long way.
    • CREATING YOUR PRODUCT Essentials Actions: BUILD A TEAM Include a hipster, a hacker and a hustler; In other words, every good team needs a designer, a developer and a business person.
    • CREATING YOUR PRODUCT Lean Startup Principle: VALIDATED LEARNING • Build an MVP of MVP (Minimum Viable Product of Most Valuable Piece) • Use API’s and other existing resources when possible
    • CREATING YOUR PRODUCT GOAL: VALIDATE PRODUCT REAL CUSTOMERS • Paying customers • Product usage
    • CREATING YOUR PRODUCT What does traction look like? PROOF OF VALUE TO CUSTOMERS Examples: 10,000 downloads, 1000 daily active users, 100+ paying customers, 1 paying enterprise client with 100+ seats ($3K $5K/month), etc.
    • PERFECTING YOUR BUSINESS MODEL How do I fund this thing? ANGELS Prepare your 10 point pitch and share your traction with angel investors, networks, fun ds, Angel.co, etc.
    • PERFECTING YOUR BUSINESS MODEL You Are Here You Need to Get Here! Product/Market Fit: LTV/3 >= CAC You’ve only just begun
    • PERFECTING YOUR BUSINESS MODEL Essentials Actions: CONVERSION METRICS Acquisition Activation Retention Referral Revenue.
    • PERFECTING YOUR BUSINESS MODEL Lean Startup Principle: INNOVATION ACCOUTING Measure progress and prioritize work.
    • PERFECTING YOUR BUSINESS MODEL GOAL: REPLICABLE / SCALABLE BUSINESS MODEL This equals successful monetization
    • PERFECTING YOUR BUSINESS MODEL What does traction look like? CAC < 3X LTV *cost of acquisition is less than 3x lifetime value; $1 in, $3 out • • • • • Enterprise: 1000 seats @ $10/seat/mo., Big Enterprise: 2 pilot contracts and some $ Social: 100,000 downloads/signups Marketplace: $50,000 revenue/mo. E-Commerce: $50,000 revenue/mo.
    • EXPANSION OF YOUR PRODUCT How do I fund this thing? CASHFLOW? OR VENTURE CAPITAL? Meet with a dozen venture capital firms to find fit and funding for growth.
    • EXPANSION OF YOUR PRODUCT Essentials actions: CONSISTENT GROWTH Execution to metrics, revenue, profits, team growth, key frustration process improvement and acquire niche companies.
    • EXPANSION OF YOUR PRODUCT Lean Startup: BML Build, measure and learn
    • EXPANSION OF YOUR PRODUCT GOAL: INVESTOR EXIT What does the door look like: Buyout or IPO?
    • EXPANSION OF YOUR PRODUCT What does traction look like? ONGOING ROLLOUT Consistently driving customer acquisition and revenue as expected. Finding new avenues for revenue growth.
    • EXPANSION OF YOUR PRODUCT Next steps: PREPARE TO PITCH Meet with investment bankers and M&A specialists
    • QUESTIONS?
    • START HERE. GO FURTHER. WWW.ELEVATEVENTURES.COM