A Metaphor It’s a journey not unlike driving from Melbourne to Perth at night in the fog without a GPS or Map. We know where west is that’s about it. Each wind in the road appears unexpectedly, the fog lifts occasionally then comes down thick as pea soup and you wonder whether it would be better to stop and go back. If you keep going you will get there, but Perth may have changed in the process!
A framework to manage ventureRISK!EVALUATION EXECUTION EXIT Register Design Review Qualify Build Learn Commit Deploy Archive
Idea v Opportunity Ideas are not necessarily opportunities Opportunities may not be commercial Commercial opportunities are relative to the idea owner (Opportunity Cost) ◦ Skills ◦ Passion ◦ Stage of life ◦ Net worth ◦ Risk tolerance/appetite
Key elements of a commercialidea! Taps into demand that is quantified and understood (what is that?) Includes a clear value proposition (what is that?) Has a business model that results in value being created for the business ($$) It is protectable Can deliver value to the investors/shareholders
Screening “A series of questions that determine risk and reward!” What questions would you ask? ◦ What is the problem/opportunity? ◦ How does this product provide a solution? ◦ What makes this business & team right for this opportunity? ◦ What will it take to launch it? & is there a return?
Concepts around pitching Purpose of the Pitch Use of aids Context ◦ In the lift/BBQ ◦ Informal business ◦ Formal but brief ◦ Full presentation Reading from notes An idea v’s an opportunity
Key Criteria before you canPITCH The problem/opportunity Industry and market. Economics (Business model) Harvesting (can you sell the business?) Competitive Advantage (protect yourself) Who is with you? The Team. Any fatal flaws?
Audience Unsophisticated investors Sophisticated Investor/s Business Angel/s Committees (Govt) Venture Capitalists Suppliers Customers Business Partners Other stakeholders
Objectives Getting a meeting Getting the second meeting with the decision makers Qualifying that who you are pitching to is the right target Forcing you to be clear and commercial in your presentation Closing the deal and getting the outcome you want.
Dummy Pitch You are a seasoned software engineer. You have come up with a way to quadruple the efficiency of any solar panel via software and so supply all the average homes power, including power up the electric car every night. You have done your numbers and believe that an investment of $5Million would allow you to kick off and is the best way forward for you from a power of energy company. On your way to a friends office for a lunch meeting, James Packer enters the elevator you are in. You are on the ground floor, and he is heading to the 22nd. You get off on the 23rd. You have your business plan in your bag!
Review your own pitches Does it cover the key criteria? Is it succinct? Does it include unnecessary information? Can you cover the key points fast (elevator pitch) Do you have the extended version? Other factors? ◦ How you dress ◦ How you communicate verbally ◦ You confident you are
Screen your opportunity Use a template or tool What are the key areas that need work CHECK ◦ Business Model Economics ◦ Demand Drivers ◦ The management team ◦ Validation of assumptions ◦ Actions forward
Key things to remember What are you pitching for? ◦ Time ◦ Money ◦ Knowledge? ◦ Relationships? Is your evaluation rational/sensible ◦ Get a 2nd opinion ◦ Get a 3rd opinion ◦ Keep it simple