Phase IV – Invest DeskCapital Financing Program July 17, 2012 Carleton University, Dunton, Rm 328 Presented to LTW Founders on June 5th
Background• Lead To Win (LTW) has generated more than 140 new companies over the past three years.• There are at least 20 LTW companies that have developed to the point, with sufficient growth potential, to embark on serious fundraising.• Many of these first-time CEOs lack experience in fundraising.• Invest Desk (Lead To Win Phase IV) is being established to educate, train, coach and facilitate fundraising for the LTW companies that have reached the point where they are ready.• The full LTW ecosystem will be leveraged to make this happen.• The activity is being led by Mike Foster, James Smith, Laurie Davis and Claude Haw with support from Tony Bailetti.• Support from Invest Ottawa, OCE, IRAP and Capital Angel Network is being requested.
Objectives and Criteria• Objective for participants: Raise sufficient capital to fund the next 18 to 24 months of company development, generally $250,000 or more.• Criteria for admission: After a formal application process, admission will be based on the following criteria: – LTW Phase III graduate (or a qualified opportunity equivalent to Phase III) – Sponsored by a qualified mentor or advisor who believes that the business is fundable – Must be seeking a meaningful round of financing (e.g. $250,000 or more)• Application process: There will be a call for applications two or three times per year starting in June 2012. Application will include a brief description of the company, senior team, current status, mentor/advisor making recommendation and amount to be raised.• Mentor/Advisor Qualification Criteria: – Some formal engagement with the company as a board member, advisor or consultant. – A credible track record in growing early stage ventures or new ventures within larger organization. – Previous involvement in a financing round in some form, as an Angel or VC investor, CEO. President or CFO.
Program OverviewThe program will consist of four components as follows:2. Introduction session (full day seminar/workshop) which will cover: – Investment process and financial plan – Defining and refining the audience – Communications toolkit – Developing momentum plan – Closing the deal3. Review session (1.5 to 2 hours with expert panel) – Held 2 to 4 weeks following Introduction session – Pitch to "expert panel" including at least one investor, one experienced CEO and one service provider (lawyer, accountant, etc.) – Scheduled only when the mentor/advisor sponsor says they are ready4. Open pitch session (30 minutes per company) – Held 2 to 4 weeks following Review session – Scheduled only when the review panel says they are ready – Company pitch to a panel of four investors designed to simulate a pitch to a VC firm (board room setting, real dynamics, including setup, introductions, pitch and Q&A)5. Support from Invest Desk (Customized) – Help identifying target investors – Qualifying target investors – Help organizing visits to Ottawa by target investor
Reference MaterialThe program will provide each participant with reference material including:• Sample pitch deck• Sample one-page company description• Sample product brochure• Template for financial plan• Template for business plan• Sample term sheets (debenture and equity rounds)• Due diligence check list
Introduction Session Day 1 Agenda Building an “Actionable” Financing Plan• Seeking Investment as Sales Cycle (1 hr) – The ”investment” customer: differing psychology/priorities of venture investors – The nature of the “sale” – hearts, minds, wallets – The sales cycle: developing credibility and momentum among investors – Developing an “actionable” financing plan: • Defining and refining your audience • Refining a shelf of basic communication tools • Creating a 6-9 month communications plan to convey momentum • Funnelling your audience into the “deal”• Step One: Defining and Refining Your Audience (1.5 hrs) – Defining your investment needs for company lifecycle – Canada/USA investment “geography” – where is the money? – Government program needs, likes and dislikes (FedDev, IAF, IRAP, SRED, OCE) – Angel investor needs, likes and dislikes – Venture investor needs, likes and dislikes – Finding your mate: matching with angel groups – Making your list dynamic and deal-driven• Step Two: Developing Your Communications Toolkit (1.5 hrs) – The role and use of the teaser and the pitch – Other tools, website, YouTube, testimonials, social media – Suggested structures and samples – the good, bad and ugly – Tips and traps for compelling investor meetings• Step Three: Developing Your “Momentum” Plan (1.5 hrs) – The toolkit: board, advisors, customers, product milestones/roadmap, patents – The crucial “first touch” – Subsequent communications and updates – Getting closure: under what conditions would you invest? – Funnelling your audience into catalysts and companions – Using group/audience pitch sessions effectively• Step Four: Finalizing the “Deal” (1 hr) – How to address deal terms as you move through the sales cycle – Priced rounds vs. convertible debt – Demystifying valuations: working backwards from exit for the “fair” deal – Founder stock restrictions – The “zen” of deal terms: other control and liquidity issues – The term sheet and steps to closing
PrerequisitesPrerequisites for the program include:• Company Revenue • Minimum $100K to date • and/or significant Customer traction• Established Funding • Friends and Family, FedDev, IRAP, SRED, OCE • Minimum of $50K raised to date• Capital Requirements • $250K for 6 months • On exception as low as $100K• Qualified Mentor / Advisor supporting application • a board member, advisor or consultant to the company • credible track record in early stage ventures or new ventures in larger organization • involvement in a financing round in some form, as an Angel or VC investor, CEO, President or CFO.
Timeline• June 8th: Applications accepted – Go to http://founders-club.ca/ – Or request from firstname.lastname@example.org• June 19th: Deadline for Applications – Review, questions, clarification and/or contact with advisor• July 10th: Participants notified – 8 to 10 Companies – 2 participates: typically CEO, and Advisor• July 17th: Carleton University, Dunton Tower, Sprott School of Business, Rm 328