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  • Skills+And+Tools+To+Win+Business+Plan+Competitions

    1. 1. Skills and Tools to Win Business Plan Competitions Susy Schneider, BA Ed Hansen, MBA T. Fettah Kosar, PhD UW Business Plan Competition Resource Night 02/23/2006
    2. 2. Advice for a Great Presentation <ul><li>Team </li></ul><ul><ul><li>Practice every chance you get. </li></ul></ul><ul><ul><li>Start early. </li></ul></ul><ul><ul><li>Anticipate every possible question from every p.o.v. (investor, competitor, customer, fabricator, distributor). </li></ul></ul><ul><ul><li>Trust each other. </li></ul></ul><ul><ul><li>Understand/share each other's passion for project. </li></ul></ul><ul><li>Display </li></ul><ul><ul><li>Make sure it looks professional, not 4-H club (get a design student to help if necessary). </li></ul></ul><ul><ul><li>Make sure display supports your bullet points/pitch. </li></ul></ul>
    3. 3. Advice for a Great Presentation <ul><li>Pitch </li></ul><ul><ul><li>Arrange team on the side, not upstage of speaker. </li></ul></ul><ul><ul><li>Don't talk to slides. </li></ul></ul><ul><ul><li>Use hand gestures if they come naturally (beware of overusing &quot;the fig leaf&quot;). </li></ul></ul><ul><ul><li>Speak slowly, clearly - don't rush to fit everything in or show how prepared you are. </li></ul></ul>
    4. 4. Some Practical Tips for BPC <ul><li>We learned the following items as we prepared for the business plan competitions: </li></ul>
    5. 5. Recipe for a well-meshed team <ul><li>Unity </li></ul><ul><ul><li>Overlapping as well as complementing (diverse) skills and knowledge to get the job done </li></ul></ul><ul><ul><li>Confidence in yourself and your team members </li></ul></ul><ul><ul><li>Division of duties: No free-riders! </li></ul></ul><ul><li>Agreement </li></ul><ul><ul><li>Tell same story (esp. during investment round). </li></ul></ul><ul><ul><li>Never contradict each other in front of judges. </li></ul></ul><ul><li>Passion </li></ul><ul><ul><li>Radiate your enthusiasm and belief in your plan. </li></ul></ul><ul><li>Missing Talent? </li></ul><ul><ul><li>Don’t be afraid to confess! </li></ul></ul><ul><ul><li>Address it in your plan: “positions to fill” or “we are currently looking for…” or “we are in contact with...” </li></ul></ul>
    6. 6. Polishing your business plan <ul><li>Find a good mentor. </li></ul><ul><ul><li>Better yet, a couple, with different backgrounds. </li></ul></ul><ul><li>Practice, practice, practice! </li></ul><ul><ul><li>Compete at other competitions. </li></ul></ul><ul><ul><li>Present at every possible opportunity. </li></ul></ul><ul><li>Use the feedback you were given. </li></ul><ul><ul><li>Write it down! </li></ul></ul><ul><ul><li>Patch up the holes in your plan. </li></ul></ul><ul><li>Ask the “professionals.” </li></ul><ul><ul><li>Legal, technical, financial etc. </li></ul></ul><ul><ul><li>“Been there, done that.” </li></ul></ul>
    7. 7. Tips for final round presentations <ul><li>Know your s..t (every member of the team)! </li></ul><ul><li>Let the best presenter(s) present. </li></ul><ul><li>Always have a positive attitude: </li></ul><ul><ul><li>Don’t take it personally, don’t get defensive. </li></ul></ul><ul><ul><li>Keep smiling. </li></ul></ul><ul><li>Never ever argue/quarrel/fight with judges! </li></ul><ul><li>Control your audience. </li></ul><ul><ul><li>Interrupted? Briefly answer question and move on. </li></ul></ul><ul><li>Claim something? Be ready to back it up! Show something? Be ready to explain! </li></ul><ul><ul><li>Be knowledgeable enough to give details (assumptions, calculations etc.) </li></ul></ul>
    8. 8. Tips for final round presentations <ul><li>If you don’t know the answer, just say so. </li></ul><ul><ul><li>Don’t try to guess the answer. Or else… </li></ul></ul>
    9. 9. Good style can make a big impact! <ul><li>Avoid using complicated backgrounds. </li></ul><ul><li>Choose an easy-to-read font (e.g. Arial). </li></ul><ul><li>Have good contrast between your text/images/pictures and background. </li></ul><ul><li>Mind your font size: min. 16 points. </li></ul><ul><li>Limit your text (e.g. use bulleted lists). </li></ul><ul><li>Use visual aids (pictures, diagrams, figures, movies etc.) whenever possible. </li></ul><ul><li>PowerPoint clipart is just plain cheesy. </li></ul>
    10. 10. This is a complicated background! <ul><li>The contrast is terrible here! </li></ul><ul><li>The contrast is much better like this. </li></ul><ul><li>This font is difficult to read! </li></ul><ul><li>This is a much better font (Arial). </li></ul><ul><li>The font size is way too small here! (10 points) </li></ul><ul><li>Use at least 16 points. (16 points) </li></ul><ul><li>“ To get our investment back, </li></ul><ul><li>we will sell our business to </li></ul><ul><li>one of our larger competitors.” </li></ul><ul><li>Exit Strategy: acquisition </li></ul><ul><li>Here is a cheesy PP clipart: </li></ul>We will collaborate with strategic partners to reach our goals.
    11. 11. The Anatomy of the 10 Minute Pitch Introduction The Problem The Solution Market Size Revenue Model Sales Cycle Customers Partners Traction Advisory Board Management Competition {00:30 seconds} {02:30 seconds} {06:30 seconds} {08:30 seconds} {10:00 min.} Financials The Offer
    12. 12. Alliance of Angels: UW BPC Resource Night ~ February 23, 2006 Edward Hansen, Program Manager Alliance of Angels 2005-06 Preston Gates & Ellis Fellow [email_address] Providing the Venue for Angel Investors and Startup Companies to Meet Introduction
    13. 13. The Problem <ul><li>Define the problem and WHO has this pain </li></ul><ul><ul><li>Graphs </li></ul></ul><ul><ul><li>Pictures </li></ul></ul><ul><ul><li>Tell of a Problem Scenario that sets up a Usage case for your product or service </li></ul></ul>The Problem
    14. 14. The Solution <ul><li>Overview of primary product or service that will solve the problem </li></ul>The Solution <ul><li>Use multiple slides if necessary </li></ul><ul><li>Do not exceed time limits </li></ul><ul><li>Product Photos, Screen shots </li></ul><ul><li>Logical Flow and Architecture diagrams </li></ul><ul><li>Short list of Feature/Benefits </li></ul><ul><ul><li>Be clear about the status of product development </li></ul></ul>
    15. 15. Traction Slide <ul><li>Founded in 2003 </li></ul><ul><li>3 full-time employees, 3 part-time </li></ul><ul><li>Released v.1 fall of 2004 </li></ul><ul><li>15 Beta Users, 10 Paying customers </li></ul><ul><li>Signed up 3 channel partners </li></ul><ul><li>Received ABC certification </li></ul><ul><li>1 provisional Patent filed </li></ul><ul><li>Licensed X patented technology from Y company </li></ul>Traction
    16. 16. Market Size <ul><li>Build the number from the ground up </li></ul><ul><ul><ul><li>Total Addressable Market </li></ul></ul></ul><ul><ul><ul><li>Use drivers relevant to your product </li></ul></ul></ul><ul><li>Show the different segments </li></ul><ul><ul><li>Pie Graph works well </li></ul></ul><ul><ul><li>Explain how you prioritize the segments </li></ul></ul><ul><ul><ul><li>“This is our initial market” (speak to why) </li></ul></ul></ul><ul><li>If you must use 3 rd party figures, cite the source </li></ul>Market Size
    17. 17. Customers <ul><li>Current Customers </li></ul><ul><ul><li>85 startup companies like the following </li></ul></ul><ul><ul><li>All companies paid full price of $0.00 per visit </li></ul></ul>Customers <ul><li>Potential Customers </li></ul><ul><ul><ul><li>Early stage technology companies raising between $250K to $3M </li></ul></ul></ul><ul><ul><ul><ul><li>Your Company, Inc. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>His Company, Inc. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Her Company, Inc. </li></ul></ul></ul></ul>
    18. 18. Revenue Model <ul><li>Licensed Software </li></ul><ul><li>Hosted Solution, Monthly Fee + 2% of all transactions booked through our system </li></ul><ul><li>We Sell Widgets; Direct and Through a Channel </li></ul><ul><li>Time and Materials </li></ul>Revenue Model Cost $650 Distributor $1750 Retailer $2000 Customer $2500 Gross Profit $1100 Avg Customer Buys 24 Widgets per year 20% 10% Gross Margin >60% Average Customer is worth $60,000 in annual Revenue
    19. 19. Sales Cycle <ul><li>How do you sell your product? Direct and/or Channel Sales </li></ul><ul><li>If Direct , </li></ul><ul><li>How many sales people? </li></ul><ul><li>How long does it take to close a deal? </li></ul><ul><li>Who is the key decision maker? (Especially if that differs from the key user) </li></ul><ul><li>If Channel, </li></ul><ul><li>Who are the partners? </li></ul><ul><li>How many are required? </li></ul><ul><li>How are the territories divided? (If relevant) </li></ul>Sales Cycle
    20. 20. Competition <ul><li>Indirect Competition </li></ul><ul><ul><li>Summarize the current alternatives (other technologies or types of products) </li></ul></ul><ul><li>Direct Competitors (logos are easier to read than text) </li></ul><ul><ul><li>List competing company 1 and an analysis </li></ul></ul><ul><ul><li>List competing company 2 and an analysis </li></ul></ul><ul><ul><li>List competing company 3 and an analysis </li></ul></ul><ul><li>Use a matrix if possible </li></ul>Competition
    21. 21. Partners <ul><li>Pay Sponsorship for MBA fellows </li></ul><ul><li>Contribute to deal flow </li></ul><ul><ul><li>Commitments renewed on an annual basis </li></ul></ul><ul><li>In-kind sponsor </li></ul><ul><li>Public Relations Strategy </li></ul>Partners
    22. 22. Management Team <ul><li>Name, Position </li></ul><ul><ul><li>Prior Company, Position (VP or above), Years </li></ul></ul><ul><ul><li>Prior Company, Position (VP or above), Years </li></ul></ul><ul><li>Name, Position </li></ul><ul><ul><li>Prior Company, Position (VP or above), Years </li></ul></ul><ul><ul><li>Prior Company, Position (VP or above), Years </li></ul></ul><ul><li>Name, Position </li></ul><ul><ul><li>Prior Company, Position (VP or above), Years </li></ul></ul><ul><ul><li>Prior Company, Position (VP or above), Years </li></ul></ul><ul><li>Name, Position </li></ul><ul><ul><li>Actively recruiting </li></ul></ul>Management
    23. 23. Advisory Board <ul><li>Name, Area of Expertise </li></ul><ul><ul><li>Company, Position (VP or above), Years </li></ul></ul><ul><ul><li>Prior Company, Position (VP or above), Years </li></ul></ul><ul><li>Name, Area of Expertise </li></ul><ul><ul><li>Company, Position (VP or above), Years </li></ul></ul><ul><ul><li>Prior Company, Position (VP or above), Years </li></ul></ul><ul><li>Name, Area of Expertise </li></ul><ul><ul><li>Company, Position (VP or above), Years </li></ul></ul><ul><ul><li>Prior Company, Position (VP or above), Years </li></ul></ul><ul><li>Name, Area of Expertise </li></ul><ul><ul><li>Company, Position (VP or above), Years </li></ul></ul><ul><ul><li>Prior Company, Position (VP or above), Years </li></ul></ul>Advisory Board
    24. 24. <ul><ul><li>Five Year Projections (Millions, US) </li></ul></ul>Financial Projections <ul><li>Assumptions: </li></ul><ul><li>In 2006, $__ per sale </li></ul><ul><li>In 2006, __customers </li></ul><ul><li>2006 market share: __ % </li></ul><ul><li>In 2006, __% from new sales; __% from recurring </li></ul><ul><li>U.S. market only </li></ul><ul><li>Does not include future product extensions </li></ul>This is an example for demonstration purposes only <ul><li>Global Assumptions </li></ul><ul><li>Legislation passes in year 2 </li></ul><ul><li>Year 3 we get certification to market in the U.S. </li></ul>Financials
    25. 25. Funding Requirements <ul><li>Prior Funding: </li></ul><ul><ul><li>- $ from founders, $ from outside investors, $ grants </li></ul></ul><ul><li>Current Round: </li></ul><ul><ul><li>Seeking $1 million ($500,000 raised) </li></ul></ul><ul><ul><li>Pre-money valuation: $2 million (range will be fine) </li></ul></ul><ul><li>Use of Funds: </li></ul><ul><ul><li>Finish v 2.0 Prototype </li></ul></ul><ul><ul><li>Launch in xxx market </li></ul></ul><ul><ul><li>File patents </li></ul></ul><ul><li>Future rounds: </li></ul><ul><li> - Series B of $ million expected in early 2004 </li></ul><ul><li>Exit Strategy: </li></ul><ul><ul><li>Acquisition (perhaps Microsoft, IBM or Nike) </li></ul></ul>The Offer
    26. 26. Bad Examples <ul><li>All of the following slides are from real presentations: </li></ul>
    27. 27. Company Description <ul><li>The Corporation has leveraged the extensive product design, research and development and invention experience of its founder and invented a patentable, disruptive core technology , which solves general imaging problems in a dramatically improved new paradigm . The technology provides vastly improved solutions to traditional medical diagnosis problems. In addition the new paradigm easily affords new and compelling additional ‘natural’ features. The superior paradigm makes feasible the solution to new, real problems that require solving. These new features will increase the basic usefulness of the product by about 200%. The technology is disruptive because it is a very dramatic improvement over the old technology, is applicable to the full range of problems, and offers extremely compelling new and basic features. All of this together will raise the bar of what is expected in similar products. It will be offered to the marketplace at half the price of the existing technology . Funds are sought to develop the prototype, and finish the patenting process. $5,000,000 will be required to complete this phase – the seed phase. The prototype to be developed in the seed phase is the main collateral of the next phase, in which an additional $15M will be sought to bring two initial products to market. The vision is to very aggressively market two carefully chosen initial products with the goal of ultimately gaining 80% market share . </li></ul>
    28. 28. Network Diagram explaining the process is about to revolutionize the way you think about annoying PowerPoint presentations! DataStream Manager FORMS Procedure Rules XML Business Rules and Templates FFR Data Outflow Manager XSLT Rules XML Data TTF System Administration Console SSL Storage Systems DD Portals & IVR Engine VM Server Primary Access Access Controller Manager Console User Console Access Permissions Inbound MGHG Accounting Console PPRM System Web Services VPN Web Server Data Mgmt System (EODSYS) PPL Layers, XPL Stack XPL Stack Manager Outbound MGHG External Networks (TTO Net) (PMP Layer) Administration Internet VPN MMS Accounting Internal Network Internet Transformation Manager
    29. 29. Financials
    30. 30. Good Slides <ul><li>As you can imagine, all of these are from good presentations: </li></ul>
    31. 31. What We Do <ul><li>Geospiza builds software for scientists that transforms living material into digital information </li></ul>
    32. 32. How the process works Step 1: It starts and ends with scientists and their samples Step 2: Collect sample: labs isolate and purify the DNA Step 3: Instruments perform automated chemistry to sequence the DNA Step 4: Sequenced data are processed, analyzed and stored on a computer Step 5: Results provide insight on disease type, recommended therapies or lead to new scientific discoveries From sample to result, Geospiza software automates these steps, making it better, faster and easier to deploy
    33. 33. The Mercent Solution
    34. 34. Competition GoodCo Tools ClampuMax RoboMatic SNF Inc. Clamping Precision Clamping Strength
    35. 35. Addressable Market Our target market
    36. 36. Some final (and obvious) tips <ul><li>If you fall, get up and do it again! </li></ul><ul><li>Remember to have a great time! </li></ul><ul><li>And show this attitude! </li></ul>