Preparing an Investor Pitch

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Presentation by David Williams (@dcwvegas) and Rick Duggan (@rickduggan) at the September 1, 2011, @VegasJelly.

Links from the last slide at: http://bitly.com/nc6qJO.

Published in: Business, Economy & Finance
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  • R\n\nPitch practice\nElements that are important\nFocused on pitching to an investor, though we will mention other topics\n\nWhy listen?\n\nI raised $19 million for a company that sold digital downloads on the internet. You may have heard of it -- iTunes.\nBut that wasn't my company.\n\nDavid's bio\n\nHow many people think they have an idea worth a million dollars? You’re wrong.\n\n
  • R\n
  • R\n\nTwitter is the solution to the problem “I want to communicate but I have ADHD”.\n\nSecond article makes the point that the idea has to be good. True, but somewhat irrelevant to the point.\n\n
  • R\n\nIncidentally, this is why more than 75% of startups fail.\n\n
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  • D\n\nWriting the business plan is somewhat less about the plan and more about the preparation.\n\n\n
  • D\n\nWhy aren’t they listening? Listen to their objections.\n
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  • D\n\nVC web sites describe how they like to see business plans, presentations, and common mistakes (which translate to pet peeves/irritations)\n\nPut your best foot forward – “We’re implementing feature X” vs. “We’re going to implement feature X”\n\n\n
  • R\n\nAs we mentioned earlier, the audience will define exactly what is desired. This is a starting point. \n\nSometimes you will have more, sometimes you will have less.\n\n\n
  • R\n\nSo I’ve spent all this time preparing the presentation, and it’s only 10% of the meeting? \n\nNo, you’ve spent all this time preparing yourself.\n
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  • Preparing an Investor Pitch

    1. 1. Preparing an Investor Pitchby David Williams and Rick Duggan
    2. 2. Overview✴ Ideas Are Worthless✴ Know Everything...✴ ...Although Admit What you Don’t Know✴ Talk To Everyone Who Will Listen✴ Pitfalls To Avoid✴ Play to WIN✴ Putting It All Together✴ Summary✴ Q&A
    3. 3. Ideas Are Worthless✴ I have had thousands of ideas... ✴ Fleeting thoughts --> Hmm, that’s interesting ✴ I should see if anybody is doing that -> Research-worthy ✴ But none of them have ever made me any money✴ Value-Added Solutions ✴ Must be solution that resolves a “pain point” ✴ Must be solution that is efficient ✴ Example – Twitter
    4. 4. Proof That Ideas AreWorthless Idea Execution Success Bad Bad No Bad Good No Good Bad No Good Good Maybe
    5. 5. Know Everything...✴ Research, Research, Research ✴ Google (lots of variations) ✴ People around you every day ✴ Be fluent in your market knowledge ✴ Know the competitive landscape
    6. 6. ...Although Admit WhatYou Don’t Know✴ Wait...I thought I should Know Everything✴ In theory yes, in reality no✴ Admit what you don’t know✴ Credibility is key✴ Always thank the person for teaching you something ✴ Offer to research and get back to them✴ Being prepared minimizes the risk of downside surprises
    7. 7. Prepare a Business PlanFirst✴ Write a business plan ✴ Do not wait for an investor request/pitch; focus on the process, not the product...marketing, development, operations, financing, etc. ✴ Continuous improvement✴ Save your sources – you may be asked to cite them
    8. 8. Talk to Everyone Who WillListen ... and Some Who Won’t✴ Family✴ Friends✴ Mentors✴ Colleagues✴ Blog readers✴ Stakeholders
    9. 9. Pitfalls to Avoid✴ Ask VC/angel to sign an NDA – ain’t gonna happen!✴ You are not in a position to dictate terms, so do not waste your time doing so; negotiation is the key✴ Claim your market is the entire world, or so large that it is unwieldy✴ “Market is $Y billion. If we get only 1% of that...” does not impress...you might end up with much more or much less✴ Do not emphasize your exit strategy more than your business strategy – focus on creation/build/growth✴ Do not be overly broad; investors like to see focus, ability / vision to execute the idea, not simply sell it
    10. 10. Play to WIN✴ Listen carefully to questions; answer what was asked, not what you wanted to be asked✴ Be respectful to everyone you meet on your journey; relationships are paramount✴ Research your audience; most are clear on what they want and how they want to see it✴ Be realistic about your valuation, especially at a very early stage (pre- revenue) – negotiation✴ There is a fine line between defending your ideas and being defensive✴ Put your best foot forward
    11. 11. Elements of a Pitch✴ Introduction✴ Problem You are Solving (pain point)✴ Your solution✴ Market✴ How to reach market✴ Revenue model✴ Desired investment & what major milestones will you reach with it✴ Team
    12. 12. Summary✴ Prepare, prepare, prepare✴ Responses to operational questions should be considered✴ Know what you do not or cannot know✴ Negotiation will determine many outcomes✴ Consider that angel / VC funding might not be the right model for you✴ 10% of pitch meeting is your presentation✴ 90% of pitch meeting is discussion / answering questions
    13. 13. Thank YouQ&A
    14. 14. Other Resources✴ http://www.paulgraham.com/ideas.html✴ http://blog.assetmap.com/2011/01/social-web/lets-end-the-ideas-are- worthless-myth✴ http://blog.startupprofessionals.com/2011/08/how-much-is-your-million-dollar- idea.html✴ http://blog.startupprofessionals.com/2011/08/10-funding-quotes-every- entrepreneur.html✴ http://www.inc.com/guides/present-your-business-plan.html✴ http://www.sequoiacap.com/ideas✴ http://programmingzen.com/2009/02/23/do-you-really-need-venture-capital- funding

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