You only get one chance at the perfect investor so you need to be ready. This is the first in a series of workshop sessions that get you ready.

1. Success Formulas®
Session Two
Focus

2. Session Two Agenda
• Feedback Session On...
– 30-Second Description
– Exit Strategy
– Executive Summary
• Tests of a Winner
• Product/Market Matrix
• The Focus

3. Feedback Session
• Entrepreneurs Present Information
• Others Act as “Investors”
• Comments & Feedback (“Yeah, buts…”)
On:
• 30-Second Description
• Exit Strategy
• Executive Summary

4. 30-Second Description
Feedback
• Introduction
• Interest Generating Idea
• Two Key Points
• Probe for Need or Opportunity

5. Exit Strategy
Ask Yourself...
• Why Are You Getting Into Business?
• Do You See Yourself Running the
Company Twenty Years From Now?
• Is Your Goal to Make A Lot of Money?
• Or Running a Solid and Steadily Growing
Family Business?

6. Exit Strategy
Feedback
Types…
• Lifestyle
• Inheritance-Bequest
• Sell to Larger Corporation
• IPO: Sell to the Public
• Shut Down: Dissolve the Company

7. Executive Summary
In 2-or-3 Pages, Briefly Describe the
highlights of…
• Elevator Speech
• Industry
• Vision
• Mission
• Corporate Legal Description
• Product/Service - What it does, how much it sells for,
proprietary position
• Market - Who’s going to buy, what is the sales channel.
• Operations
• Management Team
• Investment Required
• Financial Proforma
• Note: Develop each topic for five years

8. Funding
• What are Your Funding Needs?
• What are Your Sources of
Funding?

9. Professional Investors
• Venture Capitalist
• Banks
• Angels/Local Private Investors

10. Venture Capitalists
Who are they? Which should you approach?
• Role of “Lead Venture Capitalist” (should be
close to you)
• How many investors do you need
• Specialty by Industry
• Specialty by Stage of Investment
• Specialty by Size of Investment
• Other Criteria:
– Co-investors
– Value-added services
– Active versus passive involvement
– Et. al.

11. Venture Capitalist’’s Goal...
• High Return on
Investment
• Managed Risk

12. Banks
Will Give You a Loan If…
• You have Assets--Get Money Back.
• Earnings Within Company.
• You Personally Guarantee Pay Back
(Personal Assets) Debt.

13. Angels/Private Investors
• Known as Informal Venture Capitalists
• Typically Willing to Invest Earlier
• One or More Angels May Be Used to
Raise Money
• Often Like to Get “Involved” in the
Company’s Operations
• Can Be Idiosyncratic

14. What Resources Do You
Have to Draw On?

15. Break

16. Tests of a Winner
• Team?
• Market?
• Operations?
• Technology?

17. Technical
• Do We Have a Proprietary Technology,
and is it Proven?
• Can We Make it in Volume?
• Can We Protect It?
(More Discussion on Technology in
Session Four.)

18. The 2-Minute Opportunity
Checklist for Entrepreneurs
• Does your business
idea soothe someone's
pain, discomfort,
frustration, or
dissatisfaction?
• Are there lots of those
people out there?
• Do these people (or
companies, or
governments) have
money to pay for it?
• Will they be able to
decide quickly to buy
your product or
service?

19. The 2-Minute Opportunity
Checklist for Entrepreneurs
Cont’d
• Does your idea exploit
something about you
that is outstanding or
unique?
• Can you think of at
least two people who
might join you?
• Are there important
assets you have that no
one else has? (money,
access to customers,
technology, leadership
skills, execution,
location,
salesmanship, etc.)

20. The 2-Minute Opportunity
Checklist for Entrepreneurs
Cont’d
• Do their skills
complement yours?
• Do they have the same
values as you do?
• Do the majority of
people whose opinion
you highly respect
think your idea is a
good one?

21. The 2-Minute Opportunity
Checklist for Entrepreneurs
Cont’d
• Does at least one
person (and not more
than three people),
whose opinion you
highly respect, think
your idea is a bad one?
• Is there something
about the idea or its
implementation, that
compels you to really
devote yourself to it?

22. The 2-Minute Opportunity
Checklist for Entrepreneurs
Cont’d
• Can you sneak by the
big competitors
without them noticing
you for awhile?
• Can you start up
without huge gobs of
money?
• Can you find a
potential customer
who will take your
calls, give you
feedback, try a pilot
out?
• Can you keep your
fixed costs low during
launch?

23. The 2-Minute Opportunity
Checklist for Entrepreneurs
Cont’d
• Does your idea lend
itself to small
incremental steps that
can inexpensively
generate valuable
information as well as
at least a little cash?
• Can you think of
something else that
Isenberg has
forgotten? (and it is....)

24. Market
• Who wants it?
• What will they Pay?
• How Do We Know Who Will Buy?
• What Features/Functions will make them
choose your product/service?
• What is the best Channel to Market?
• What is the Competition Doing?

25. Operations
Ask Yourself: Do we have the...
• Correct People Resources?
– Now
– Future
• Financial Resources?
– Cash-flow from sales
– Equity Financing
– Debt financing
• Infrastructure?
– Equipment & facilities
– Out-sourcing versus in-house

26. Case Study:
Jacobs’’ Hot Dog Stand
• Donald
• Hot Dogs
• Secret Ingredient
• Technology is...

27. The Product
• The Product is…..

28. The Market
• Front Yard
• Nearby Park
• The market is…..

29. Operations
• A Hot Plate, Pots
• Shopping at the grocery store
• Loose change jar

30. Resources
• Donald
• Ruth, his wife
• A Card Table
• A Yard Sign
• $5.00

31. Sales Channel
• The Sales Channel is…..

32. Success
• Success happens
• The story is…..

33. Expansion
• The next Product is…..
• And the Product after that is…..
• The next Market is…..
• The Market after that is…..
• The next Technology is…..
• The next Sales Channel is…..

34. Ramifications
• The Customer Base Grew…..
• The Company brought in more Vendors….
• The Company brought in more People…..
• The Story involves Money…..
• Then the Government discovered
Donald…..

35. The Competition Shows Up...
Sales Take A Dive!
What Should Donald Do?

36. Sales Take a Dive!
• What to Do?
– Create a new secret recipe
– Upgrade the stand’s appearance
– Advertise
– Cut prices
– Open a new stand
– Move the stand
– License the recipe
– Sell the business

37. Product/Market Matrix
1 2 3 4 5 6 7 8 9 10
A
B
C
D
E
F
G

38. The Focus
• Team
• Market
• Sales Channel
• Technology
• Product
• Service
• Resources

39. Technology
• The Resource: Research, Patents,
Trade Secrets
• The Investment: New Technology
• The Return: Licenses and
Consulting Fees

40. Product
• The Resource: Family of Related
Products
• The Investment: New Products
• The Return: Sales of Products to
Multiple Markets

41. Market
• The Resource: Access to a Set of
Customers with Common Needs
• The Investment: The Right Range
of Products
• The Return: Sales of Multiple
Products to a Single Market

42. Service
• The Resource: A Skill Set
• The Investment: People With a
Skill
• The Return: Selling Related
Services to Multiple Markets

43. Sales Channel
• The Resource: A Method of Sales
• The Investment: Sales Tools,
Access to Products and Markets
• The Return: Sales of Many
Products to Many Markets
Through a Single Method of Sales

44. Resource
• The Resource: Airplane Seats,
Architects, Engineers
• The Investment: People or
Equipment
• The Return: Selling the Resource
to Multiple Markets

45. Pick Your Resource
• Team
• Market
• Sales Channel
• Technology
• Product
• Service
• Resources

46. Ramifications of Your Choice
• The Resource
• The Investment
• The Return
Will the Business Take-Off?

47. Re-Cap Questions
• What is Your Exit Strategy?
• What is Your Focus?
• What are Your Resources?
• What are Your Sources of Funding?
• Do You Have a Winning Business?

48. Homework
Update Executive Summary
• Based on Feedback
• Include Focus

49. Preview Session Three:
Marketing Strategy
• Present Revised Executive Summaries
• Product Life Cycle
• Defining Your Product--Market & Niche
• Low Price/Technology/Relationship Leaders
• Distribution Channels

50. Success Formulas®
Session Two
Focus