Top 10 Reasons Startups Fail + How to Pitch and Get Funded

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Two presentations in one: First I share the top 10 reasons startups fail, followed by how to pitch your startup and get funded. I was the CEO and co-founder of two tech startups (one failed and one I …

Two presentations in one: First I share the top 10 reasons startups fail, followed by how to pitch your startup and get funded. I was the CEO and co-founder of two tech startups (one failed and one I sold). I include tips I used to raise nearly $1M in funding. You can also download my free Pitch eBook here: http://www.bplans.com/elevator-pitch/ebook/

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  • Ran in a London newspaper in the early 1900’s to recruit men for his expedition to the South Pole.
    5000 men responded to the ad
    Interviewed 400 men in increments of 15 minutes
    Selected his 27 men for the journey
    Never made it to the S. Pole, and the journey lasted almost 2 year
    Everyone survived – leadership!
  • Spark their interest. Want to learn more – see your business plan, talk to your customers, meet your team, demo your products, etc.
  • Can’t emphasize the importance of rehearsal. You want to know the content of your pitch presentation on a deep knowledge level – not just memorized. Your audience will know if you’re reciting the pitch from a point of memory vs from a point of deep knowledge. And if an investor tells you you have 10 minutes to pitch – you better not go over. I’ve seen some disaster pitches.
  • Use Maternova story: # of babies that die due to lack of proper affordable supplies.
    Almost all maternal deaths occur in developing countries. 99% - due to lack of access to proper healthcare. Our products will help save tens of thousands of women each year.
    Don’t have to be lifesaving stories – just compelling.
    Most people spend a total of 32 hours planning for their family vacations. Our technology will cut that time in half as well as cut the cost to travel in half. We’re saving people time and money and increasing their travel experience.
  • We provide a single source that makes it easy for medical practitioners to access otherwise difficult to access medical supplies to help save the lives of mothers and their newborn children.
    Or
    We’re saving families time and money by matching them with travel destinations and itineraries within their travel budgets.
  • Your biz plan should have milestones, due dates (accomplished dates), who’s responsible and status. This is the reinvention of the business plan – it’s not just a document you write and walk away from – you keep it alive b tracking the implementation of it. And adjusting as you grow. Successful startups are agile and able to turn on a time to meet the changing needs of the market.
  • Hopefully you’ve already done this in your opening story and in the description of your product – but this allows you to get more specific and show why/how you’re different. Don’t ever say you don’t have any competition. I met with some great entrepreneurs yesterday about a very cool product they’ve developed and they’ve essentially opened up a new market, so there are no other products like what they’ve developed, but they definitely have competition.
    Facebook and Linkedin compete – they compete for time online.
  • Your margins
  • The numbers behind the numbers are more important than your projections.
  • The numbers behind the numbers are more important than your projections.
  • Don’t just list who is on the team and then their job descriptions – I see that all the time. This section is to sing your team’s praises! Awards won, experience related to the current company, connections, key mentions, etc. Investors invest in people first, ideas second – so show them why your team is the right team to lead this venture – whether it’s a local café or an international software company – they must believe your team can implement the plan being presented.
    And – be sure to make it known that you know what you don’t know! List any open positions that the funds will be used to help recruit.
    Investors invest in people first, ideas second.
  • Well stated: who, what, how much and why
    Use of Funds slide. Raising $200,000 and 25% will be used for marketing, 40% for product development, etc.
    If 10K or $10M – explain what you’ll use it for…
  • Not everyone is building a company to exit from in 5 or 10 years, but know that investor make their big ROI when you have a liquidity event – someone buys you for example. There are many ways to provide a return to your investors without having an exit though – but you better have those rewards works out up front. % of revs, profits, dividends, etc.
    But even if you’re not planning on selling your company – it’s important to tell the story of the legacy your company will leave – and potentially to whom. If family business – passing down to children, merging with another company, acquiring other companies, etc. Just as you tell the story in the beginning, the story needs to continue to be told…
  • Bring it back to your story that you opened with – focus on the market opportunity – the problem you’re solving in the marketplace – and why your team is the right team to lead or grow this venture.
  • Download ebooks and read posts

Transcript

  • 1. Reasons Startups Fail #DrexelSiliconValley
  • 2. Small Wages. Bitter Cold, Long Months of Complete Darkness. Men Waned For Hazardous Journey.
  • 3. Constant Danger, Ernest Shackelton Safe Return Doubtful. Honour & Recognition In Case of Success.
  • 4. By Endurance, We Conquer!
  • 5. The Wrong Team 1
  • 6. Marketing- Heavy Tech-Heavy 1
  • 7. Ideators Innovators Starters Growers Exiters
  • 8. The Single Founder 2
  • 9. Finding the Right Co-FounderFinding the Right Co-Founder What you can do  Public speaking  Press releases  Copywriting  Editing  Social Media  Email marketing  Google Analytics  Write plans  Graphic design What you like to do X X X X X Missing skill-sets Programming SEO SEM Financials HR Biz Dev …
  • 10. Wrong Legal Team! 3
  • 11. Trust Your Gut!!!
  • 12. Interviewing attorneys… • Work with your industry before? • How much time for you? • Who else if they are not available? • Raised rounds of financing? • If so, create/read a Capitalization Table? • Compensation packages for new hires? • IP protection? • Global expansion? • Experience with exits – M&As, IPO?
  • 13. Boiling the Ocean4
  • 14. Not Talking to Customers 5
  • 15. Include Customers in your R&D Ask Listen Implement Reward Thank
  • 16. Stealth to Long.. 6
  • 17. Slow to Launch… 6
  • 18. Stuck on Original Idea7
  • 19. Taking “Dumb Money” 8 8
  • 20. Smart money brings…  Business experience  Management experience  Maturity  Contacts  Mentorship  Challenge  …
  • 21. Founder-itis! 9
  • 22. Spending too much money 10
  • 23. How to avoid these mistakes?  Mentors, advisers  Continued education  Proper planning  Always tracking  Being agile  Adjusting…
  • 24. Pitch Plan Track All in 1 Easy to Use Tool
  • 25. Track Monthly Burn Rate
  • 26. Deliver Powerful Pitches to Investors in 10 Minutes
  • 27. Purpose of the 10 Minute Pitch:
  • 28. Deliver A Performance Rehearse! Rehearse! Rehearse!
  • 29. Assumptions Written a Business Plan ✓ Conducted Due Diligence ✓  Team, Financials, Investors, Market, Competition, IP, Trends … Have Mentors/Advisers ✓
  • 30. Build Credibility Hit the “stage” strong! Share your “rock star” talents Share “been there done that” Utilize the “cool factor” Spark their interest…
  • 31. Tell A Story∧ Compelling Address the Problem 1 Min
  • 32. Your Solution to the Problem Describe the uniqueness of your product 1.5 Mins
  • 33. Our Traction Your Successes Money raised Barriers overcome Key investors Key hires Sales made Partnerships LOIs Patents Media Etc… .5 min
  • 34. Target Markets 1st2nd 3rd 4th5th Beta Market, Addressable Market, Market Segments, % of Revenue/Market, Potential Market... Highlight any Key Research 1 min
  • 35. Target Markets 1st Harvard/Stanford 2nd Ivy League 3rd Colleges/Univs 4th 14 – 34 yrs old Businesses…5thFastest growing demographic Women 55+ years old
  • 36. Acquiring Your Customers? Including the cost to acquire a customer .5 min
  • 37. Your Competition Clearly communicate your Value Proposition 1 min
  • 38. Due Diligence on Competition City/ Local Focus No Character Limitations Free to Post Can Include Images Social Media Friendly Easy to search Local Newspaper ✪ ✪ ✪ ✪ ✪ ✪ ✪
  • 39. Your Revenue Model How you will make $$$ Who it will come from Market validation… 1 min
  • 40. Your $ Projections Include Key Assumptions Research to back it up Explain inflection points 1 min
  • 41. Assumptions are King! .5 min
  • 42. Know the Metrics for Your Model What to track if SaaS business model: •Content Marketing (uniques, TOS, bounce rates, open rates, CTRs, CVR…) •CAC = Customer Acquisition Costs •LTV = Lifetime Value ($) •Churn Rate (the lower the better) •Engagement - Referral Rates - Cancellation Reasons
  • 43. Your Team 1 min
  • 44. Your Funding Needs .5 min Brittany’s sister is having a baby and I need $5 to buy her a nice gift.
  • 45. Your Exit Strategy Include Comparables Estimated Timeline to Exit .5 min
  • 46. End on High Note Remind them why you’re a Rock Star!!
  • 47. Free e-Book
  • 48. Questions? @iamcarolina