Venture Capital Presentation

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Venture Capital Presentation

  1. 2. <ul><li>Investopedia : Funds made available for startups firms and small businesses with exceptional growth potential. Managerial and technical expertise are often also provided. Also called risk capital. </li></ul><ul><li>Ola Report : Source of investment capital for small, growing companies. Usually have an interest in companies going public in order to realize their investment. </li></ul><ul><li>PrenHall.com : External equity financing provided by professionally-managed pools of investor money. </li></ul><ul><li>Wikipedia : Venture capital (also known as VC or Venture) is a type of private equity capital typically provided to immature, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company. Venture capital investments are generally made as cash in exchange for shares in the invested company. </li></ul>
  2. 3. <ul><li>VCs raise pool of capital from different sources </li></ul><ul><li>Finance new and rapidly growing companies </li></ul><ul><li>Purchase preferred equity securities and take board positions </li></ul><ul><li>Take high risks </li></ul><ul><li>Expect high returns </li></ul><ul><li>Are in it for the long-run </li></ul><ul><li>Make $$$$ either through M&A or IPO liquidity </li></ul>They own a piece of the pie
  3. 5. <ul><li>By Sector ( healthcare, IT, Clean Energy, Social Entrepreneurship etc) </li></ul><ul><li>Size of Fund : (Small - < $100M vs. Large > $1B+) </li></ul><ul><li>Location: ( US, Europe, Israel, India) </li></ul><ul><li>Public vs. Privately Formed Funds: (Norwest Venture Partners – Wells Fargo Division, Intel Capital vs. Sequoia Capital, Altos Ventures etc ) </li></ul>
  4. 6. <ul><li>Money loaned in exchange for repayment + interest charge </li></ul><ul><li>Keep full ownership of the business </li></ul><ul><li>Immediate access to cash </li></ul><ul><li>Personal liability </li></ul><ul><li>… .RISK </li></ul><ul><li>Money provided in exchange fro ownership </li></ul><ul><li>Value-added investors </li></ul><ul><li>Opportunities </li></ul><ul><li>New Partners </li></ul><ul><li>Very expensive </li></ul><ul><li>Founders and be replaced …. </li></ul>
  5. 7. <ul><li>Bootstrapping </li></ul><ul><li>I define “Bootstrapping” as the act of starting a business with little or no external funding. Bootstrappers don’t write lengthy business plans, chase deep-pocketed investors, or indulge in overly academic market research exercises. Instead, they focus all of their considerable energy, brainpower, determination and skills on creating a business that can actually succeed in the real world . </li></ul><ul><li>Greg Gianforte- RightNow Technologies </li></ul><ul><li>Angel Investing Angel capital fills the gap in start-up financing between &quot;friends and family&quot; Although it is usually difficult to raise more than a few hundred thousand dollars from friends and family, most traditional venture capital funds are usually not able to consider investments under US$1–2 million . Angel investment is a common second round of financing for high-growth start-ups, and accounts in total for almost as much money invested annually as all venture capital funds combined </li></ul>
  6. 8. <ul><li>Team (who are the team members, background, how they know each other, what makes them domain experts, history of collaboration and success) My Boss : “If you can’t convince your best friend to join your team– I don’t want to fund you” </li></ul><ul><li>Market (it needs to be an emerging and fast growing market. Web 2.0; Social Collaboration; Viral Marketing) </li></ul><ul><li>Business Model ( $$ Show me the Money$$) </li></ul><ul><li>Technology (How easily replicable is your idea?) </li></ul>
  7. 9. <ul><li>If you can eliminate one of the areas in your balance sheet…..Call me! </li></ul><ul><li>Example: Amazon and Ebay – eliminated Inventory </li></ul><ul><li>Marketing (Viral Marketing has become the next wave of advertising) </li></ul><ul><li>Examples: Facebook, MySpace, Skype, </li></ul>
  8. 10. <ul><li>New type of venture firms specializing in early stage startups </li></ul><ul><li>They do seed funding – really early stage! </li></ul><ul><li>Usually invest $20 K for an exchange of 5% preferred equity </li></ul><ul><li>Provide mentorship opportunities for entrepreneurs </li></ul><ul><li>Founders have a chance to talk to other pears </li></ul><ul><li>Y – Combinator (One of the more successful ones) </li></ul><ul><li>The most important thing we do is work with startups on their ideas. We're hackers ourselves, and we've spent a lot of time figuring out how to make things people want. So we can usually see fairly quickly the direction in which a small idea should be expanded, or the point at which to begin attacking a large but vague one. </li></ul>
  9. 11. <ul><li>Don’t give up and be prepared to knock on many doors </li></ul><ul><li>Hire a great lawyer – Incorporate the company </li></ul><ul><li>Identify your niche </li></ul><ul><li>Identify your needs (VCs, Angels, Bootstrapping) </li></ul><ul><li>Identify the right partner </li></ul><ul><li>Get an introduction </li></ul><ul><li>Prepare a 2 pg overview to send to him/her </li></ul><ul><li>10-15 slide presentation </li></ul>
  10. 12. <ul><li>KISS (Keep it simple..stupid  ) – don’t overcrowd the presentation with slides. If it is an elevator pitch, you only have 5 minutes to present. Make it short. </li></ul><ul><li>Proof of Concept (Validates the opportunity and gives credibility to the team) </li></ul><ul><li>Need – What need is there currently in the market for your product (Solving a problem) </li></ul><ul><li>Market Size & Growth Projection (This market is an X million, X Billion USD Market – BE HONEST!) </li></ul><ul><li>Total Addressable Market – who are you going after? </li></ul><ul><li>Solution – How are you going to solve the problem? </li></ul><ul><li>Business Model – how are you going to monetize the opportunity </li></ul><ul><li>Competition – Be honest about this too. VCs know when you are lying. </li></ul><ul><li>Marketing – How will you acquire your targeted customers? </li></ul><ul><li>Financials (Break-even, growth margins, 5 –year forecast and financial metrics) </li></ul><ul><li>Status of the startup to date </li></ul>
  11. 14. Plug and Play Tech Center 440 N. Wolfe Road Sunnyvale, CA, 94085 Tel: 408-524-1400

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