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Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
Writing a winning investment story
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Writing a winning investment story

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Presenting a convincing investment story is absolutely crucial for getting funds for your business or a project. Take advantage of a set of proven shortcuts that would improve your writing skills …

Presenting a convincing investment story is absolutely crucial for getting funds for your business or a project. Take advantage of a set of proven shortcuts that would improve your writing skills dramatically. Most of the hints and tools can be equally applied to writing any text that should 'sell' -- from a cover letter to a potential employer, to charity sponsorship proposals.

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  • 1. Writing a winninginvestment story by Vladimir Nesterenko Presented at the Kyiv School of Economics February 7, 2013
  • 2. Starting point• Investment story – an investment rationale, a part of proposal made by an entrepreneur or its designee (e.g., investment bank) to potential investors. The ‘investment story’ is supposed (and expected) to answer the question ‘WHY TO INVEST’.• For this presentation, we’ll assume the investment story is prepared for Private Equity investors.• Private Equity investors – funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. [1,2]
  • 3. The fund’s funnel You are here Leads Proposal Prospects Formal criteria met Opportunities Business criteria met Deals Deal You want to be here
  • 4. Chance of success Probability of getting You are here to each category* Leads 99% Prospects 50% Opportunities 10% Deals 1% * Numbers are indicative, for You want to be here illustration only
  • 5. Who decides?
  • 6. They do?
  • 7. Not (yet)
  • 8. Help him
  • 9. a) Match formal criteria
  • 10. Investment criteria if you match these, make it clear from the very startFormal Business• Company size• KYC (oligarchs, …)• Industry • Solid business opportunity• Ticket size (e.g. >$10mn) • Leading player in its market• Geography • High quality management• Investment pattern (e.g., • Manageable risks growth, value) • Clear exit strategy• Maturity• Years profitable (e.g. >3)
  • 11. b) Stand out
  • 12. ( he wants to stand out too )
  • 13. FAIL
  • 14. 10 shortcuts towriting a story that stands out
  • 15. 1. Brevity, the soul of wit
  • 16. Magic tool: DELETE The ad captured a week ago from the Google search screen
  • 17. 2. Cut to the chase
  • 18. Magic tool: “So what?”• “The Company is launching two-three new products a year.” – So what?• -> “Launching two-three new products a year, unlike its peers, the Company secures its market share.”• “We’ll push the share of export sales to 40% over the next five years.” – So what?• -> “By increasing the share of exports to 40% in five years, we’ll double our gross margin.”
  • 19. 3. Be specific
  • 20. Magic tool: W-Questions• “By increasing the share of exports to 40%, we’ll double our gross margin.”• W-Questions: When? What [is the current share]? How? Where [exports will go]? Why [that will prop up margins]? Who? (addressed)• -> “By entering India market, we’ll increase the share of exports from the last years’ 10% to 40% in 2017 and double our gross margin.” (yet the “Why” question remains…)
  • 21. [3,4] EGGHEADS Vagueness 3D ONLY READING OMITTED Reference index “EDUCATION” BEING SPECIFIC: “Kyiv School of Economics’ MA program in “MA IN KYIV” Business Economics will hold an admission“MA PROGRAM” test in Kyiv on July 4-6, 2013.” BEING NOT SPECIFIC: “MA PROGRAM Dimension: Reference index IN ECONOMICS “KSE will hold an admission test in Kyiv on July IN KYIV” 4-6, 2013.” Dimension: Modality “Kyiv School of Economics may hold an admission test in Kyiv on July 4-6, 2013.” Dimension: Quantor “Kyiv School of Economics usually holds an admission test in Kyiv in July.”
  • 22. Associations: Pain & GainPain Gain• Hard to construct• May be not understood • Convincing• May be incorrectly understood, even to • Short the opposite For advanced writers only.
  • 23. [5]“Children’s boots are on sale. Unworn.”
  • 24. [6] “The last man on Earth sat alone in aroom. There was a knock on the door…”
  • 25. Associations: How they work• Psychologists call it “transderivational search”• Wiki: “… Unlike usual searches, which look for literal (i.e. exact, logical, or regular expression) matches, a transderivational search is a search for a possible meaning or possible match as part of communication, and without which an incoming communication cannot be made any sense of whatsoever. It is thus an integral part of processing language, and of attaching meaning to communication. [7]• Our brains do it all the time• Problem: you can’t get into a reader’s mind EGGHEADS ONLY• It’s an ART to make reader attach correct meaning READING
  • 26. 3. Advocacy, notdescription
  • 27. Magic tool: Backward induction• “By entering India market, we’ll increase the share of exports from the current 10% to 40% in 2017 and double our gross margin.”• Problem: your reader seeks effects first, then causes• Solution: start from effects• “We’ll double our gross margin by 2017 by entering the Indian market and increasing the share of exports from the current 10% to 40%.”
  • 28. 4. Keep it real
  • 29. 5. Address obviousweaknesses
  • 30. 6. Don’t preach to the converted
  • 31. 7. Takeresponsibility
  • 32. Magic tool: No passive voice• “The share of exports will be increased from the current 10% to 40% in 2017.”• Problem: Sounds like one avoids responsibility• Solution: Show it’s not the case -- say this is YOU who will make it happen.• -> “The management is implementing its action plan to increase the share of exports from the current 10% to 40% in 2017.”
  • 33. 8. Avoidbuzzwords
  • 34. An advise from Dave“Clear your vocabularies of any superlatives, clichés, orany over-used expressions that can’t be backed up, headds. Avoid using terms like ‘the best’,‘groundbreaking,’ ‘cutting-edge’, and ‘world class.’Investors see those words day in and day out andeventually they lose meaning.”Dave Lavinsky, president of Growthink, a Los Angeles-based company that helps entrepreneurs developbusiness plans and raise capital. [8]
  • 35. 9. Test it
  • 36. Tests• Summarize the story in 2-3 sentences and see whether the summary reflects the logic of the entire story. (Normally it’s not the case)• Ask your colleague (better a junior one) to read the summary and see how long does it takes to read it. If more than 2 min – there is something wrong• Get feedback: show your story to colleagues, room mates, taxi driver, etc. If your grandma gets it – be sure your story falls into the winning 1%
  • 37. 10. Design matters
  • 38. Formatting tips• Bullet points• Key numbers• Rule of thirds [9]• Respect white space• No double accent• Three colors max• BE CONSISTENT
  • 39. RoundupRules: Magic tools:1. Brevity • DELETE2. Cut to the chase • “So what?”3. Advocacy, not description • W-Questions4. Be specific • Backward induction5. Keep it real • No passive voice6. Address obvious weaknesses7. Don’t preach to the converted8. Take responsibility9. Avoid buzzwords10. Design matters
  • 40. ExerciseHere is one of the bullet points from an InvestmentSummary – use ‘magic tools’ to make it more specificand responsible:• The Company strategy assumes expanding its operations to Kazakhstan, to tap its growing retail market.
  • 41. Cheat sheetRules: Magic tools:1. Brevity • DELETE2. Cut to the chase • ‘So what?’3. Advocacy, not description • W-Questions4. Be specific • Backward induction5. Keep it real • No passive voice6. Address obvious weaknesses7. Don’t preach to the converted8. Take responsibility9. Avoid buzzwords10. Design matters
  • 42. Exercise (solution)• DELETE: “The Company strategy assumes expanding its operations to Kazakhstan, to tap its growing retail market.” -> “The Company will tap the Kazakhstan’s growing retail market.”• ‘So what’: -> “The Company will tap the Kazakhstan’s growing retail market to increase it’s sales in CIS.”• W-Qns: -> “In 2014, the Company will tap the Kazakhstan’s $20bn retail market to increase it’s sales in CIS by 10% by 2017.”• Backward induction: “The Company targets increasing its sales in CIS by 10% by 2017 on entering Kazakhstan’s $20bn retail market.”• No passive voice: OK
  • 43. References1. http://www.investopedia.com/terms/p/privateequity.asp#axzz2K8rrYzic2. http://en.wikipedia.org/wiki/List_of_private_equity_firms3. http://www.center-nlp.ru/library/s55/nlp/meta_model.html4. http://en.wikipedia.org/wiki/Methods_of_neuro-linguistic_programming5. http://en.wikipedia.org/wiki/Ernest_Hemingway6. http://en.wikipedia.org/wiki/Knock_(short_story)7. http://en.wikipedia.org/wiki/Transderivational_search8. http://www.inc.com/guides/2010/09/how-to-write-an-executive- summary.html9. http://en.wikipedia.org/wiki/Rule_of_thirds
  • 44. About myself• The founder of Symmetric – the firm that will make strategy consulting available for mid-sized companies• 10 years in Finance (corporate and investment banking) x industry experience – Local banks, Citibank – Concorde Capital – BG Capital – Geo Alliance Group (EastOne /Arawak Energy) – Tech startups• Two MS’s, in Economics and Finance, from EERC (currently Kyiv School of Economics) and Kyiv National University of Economics. Stanford’s Tech Entrepreneurship course (via Coursera)• Get connected: ua.linkedin.com/in/vladimirnesterenko
  • 45. The presentation will be available onslideshare.net/nesterenkov and finmodels.com.ua

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