Pitching the Plan: The Investor Perspective                              December 12, 2012                                ...
Experts	  •    Chuck	  Goldman	  -­‐	  Founder,	  Apperian	  •    Arnie	  Sco<	  –	  Investor,	  Hub	  Angels	  •    Tom	 ...
Agenda	  • PROCESS	  • PLANNING	  AND	  MARKETING	  MATERIALS	  	  • PRESENTATION	  SKILLS	  • INTERACTING	  WITH	  INVEST...
PerspecTve	  •  Map	  Analogy:	  Detail	  and	  Overview	  Balance	  •  Watch	  for	  Zoom	  In	  vs.	  Zoom	  Out	  momen...
PLAN	  -­‐	  Strategic	  Financing	  Plan	  •     How	  much	  outside	  capital	  should	  you	  raise	  now?	          •...
The	  Fundraising	  Sales	  Process	  •  Financing	  Plan	  •  IdenTfy	  and	  qualify	  opTmal	  and	  backup	  investors...
Deal Size, Funding Sources and the Company Lifecycle Deal Size   PE; II     VCsEarly VCs  Angels    FF    Idea            ...
The “Right” Investors                                                Funds                                                ...
Fundraising Sales Process                                                  Inform/	                        Pique	  Interes...
Investor Screening Process	  •  Who	  is	  the	  referral	  source?	  Credible?	  •  Does	  the	  company	  fit	  my	  crit...
MARKETING	  MATERIALS	  	  •    Matching	  Materials	  and	  Process	  to	  Investor	  Type	  and	  Seqng	        •  Pre-­...
PresentaTon	  and	  Slide	  Deck	  1.     Cover Slide OrganizaTon	  2.     Problem or Opportunity + Metrics + Core Custome...
Improve Your Odds by Building a Great Team                                        	  Investors	  bet	  on	  the	  Jockey	 ...
Management Team and Advisors•  List top executives and key advisors    –  Include choice words about them         •  Exper...
General PowerPoint Dos and Don’ts       “Presentation is a visual not a reference”Do                                    Do...
PRESENTATION	  SKILLS:	  Part	  	  I	  •    Know	  your	  material	  cold!	  	  Don’t	  wing	  it.	  	         •     Use	 ...
PRESENTATION	  SKILLS:	  Part	  	  II	  •    PrioriTze	  and	  eliminate	  less	  criTcal	  points.	  	  	  •    Be	  flexi...
PRESENTATION	  SKILLS:	  Part	  	  III	  •  Always	  bring	  a	  backup	  copy	  of	  the	  presentaTon	  with	  you	  in	...
Interacting with Investors                     Basic Principles - Overview DO•    Research the investor in advance•    Rea...
Interacting with Investors DO NOT          Cautionary Overview – Don’t do the following•    Give investors a reason to tur...
VC GlossaryWhat We/They say…                              and What We/They Really Mean…Acquisition Strategy               ...
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Pitching the plan 12 12_12

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Pitching the plan 12 12_12

  1. 1. Pitching the Plan: The Investor Perspective December 12, 2012 1  
  2. 2. Experts  •  Chuck  Goldman  -­‐  Founder,  Apperian  •  Arnie  Sco<  –  Investor,  Hub  Angels  •  Tom  Egan,  LaunchCapital  •  Mirena  Bagur  –  President,  CONTeXO  Group   2  
  3. 3. Agenda  • PROCESS  • PLANNING  AND  MARKETING  MATERIALS    • PRESENTATION  SKILLS  • INTERACTING  WITH  INVESTORS  • Q&A   3  
  4. 4. PerspecTve  •  Map  Analogy:  Detail  and  Overview  Balance  •  Watch  for  Zoom  In  vs.  Zoom  Out  moments   4  
  5. 5. PLAN  -­‐  Strategic  Financing  Plan  •  How  much  outside  capital  should  you  raise  now?   •  Generally  -­‐  the  least  capital  you  need  to  get  to  next  major  valuaTon  milestone  (with   90-­‐120  day  /  10-­‐20%  cushion).  You  need  enough  cash  to:   •  Hire  criTcal  team  members  at  (start-­‐up)  market  compensaTon   •  A<ract  Customers  /  Convert  beta  customers  to  paying  customers   •  Acquire  criTcal  technologies,  systems  and  resources  •  How  much  capital  will  you  need  later?     •  ConTnued  R&D   •  Sales  and  R&D  Development  Teams   •  Sales  and  MarkeTng  Efforts   •  Growth  and  Expansion   •  Impact  on  valuaTon  and  diluTon   5  
  6. 6. The  Fundraising  Sales  Process  •  Financing  Plan  •  IdenTfy  and  qualify  opTmal  and  backup  investors     •  Gather  direct  and  indirect  contact  informaTon  and  prioriTze   •  Contact  through  trusted  source  •  OpTmizing  first  impressions  -­‐  Don’t  Pitch!  Get  a  MeeTng!  •  Be  prepared  for  diligence   •  Contracts  and  paperwork   •  IP  and  Market  Diligence  about  opportunity  (freedom)  to  operate   •  Reference  customers  or  thought  leaders  •  Close,  or  move  on  •  Deal  syndicaTon  &  Investor  CoaliTon  PoliTcs   6  
  7. 7. Deal Size, Funding Sources and the Company Lifecycle Deal Size PE; II VCsEarly VCs Angels FF Idea Beta 1.0 2.0, Lifecycle Alpha Commercial Rollout expansion Stages 7   Source: The CONTeXO Group, Spring 2012
  8. 8. The “Right” Investors Funds available Stage Size GeographyCreate a shortlist No direct- don’t use a shotgun approach competitors in portfolio Track record Relevant portfolio 8  
  9. 9. Fundraising Sales Process Inform/   Pique  Interest   ValidaTon   Investment Evaluate  InvestorProcess 4-6 months Due   Prepare   Engage   “Pitch”   Marriage Diligence  Entrepreneur 6 months -1 year 9  Process
  10. 10. Investor Screening Process  •  Who  is  the  referral  source?  Credible?  •  Does  the  company  fit  my  criteria?   –  Geography   –  Sector   –  Investment  size/Stage  •  Is  the  team  credible?  (honest,  authenTc,  upfront,  confident,  humble,   passionate)  •  Do  I  get  excited  about:   –  CEO  –  Do  I  ‘like’  him/her   –  Target  Market   –  Unmet  need/problem  being  solved   –  Technology  being  developed   10  
  11. 11. MARKETING  MATERIALS    •  Matching  Materials  and  Process  to  Investor  Type  and  Seqng   •  Pre-­‐first  mee*ng/  Investor  Conferences   •  The  1  Page  Summary  (the  “Teaser”)   •  The  5  Page  “ExecuTve  Summary”   •  The  15  –  20  page  “Slide  Deck”  -­‐  foundaTon   •  The  10  second  oral  presentaTon  pitch  (the  “Elevator  Pitch)   •  The  30  sec  –  2:00  min  oral  presentaTon  (the  “Quick  ConversaTon”)                   •  One-­‐on-­‐one  VC  mee*ng   •  The  full  Business  Plan  –  Formal  presentaTon     •  Back  up  materials   •  Financials  •  Tailoring  the  emphasis  of  materials  for  the  specific  investor  (similar  to  tailoring  a   resume)  vs.  Consistency  across  all  iteraTons  •  Tracking  distribuTon  of  materials   11  
  12. 12. PresentaTon  and  Slide  Deck  1.  Cover Slide OrganizaTon  2.  Problem or Opportunity + Metrics + Core Customer3.  Company Value Proposition + Investment Rationale4.  Product/Service Solution5.  Product/service Value Proposition6.  Addressable Market7.  Business and Revenue Model8.  Sales and Distribution Model9.  Competitive Landscape/Competitive Advantage10.  Defensibility / Barriers to Entry/IP11.  Team12.  Current Status13.  Funding Requirements, Cash and Use of Proceeds14.  Risks and Plans15.  Exit Strategy and Options16.  Investment Rationale/Summary Slide 12   + Appendices or backup slides
  13. 13. Improve Your Odds by Building a Great Team  Investors  bet  on  the  Jockey    A  Team  +  B  Idea  vs.  B  Team  +  A    Idea   • Balance skill sets – complement •  Only people make things happen•  Aligned motivations•  Prior success•  Passionate 13  
  14. 14. Management Team and Advisors•  List top executives and key advisors –  Include choice words about them •  Experience with startups, domain experience and customers •  Don’t put their whole resume on the slide•  Show current staffing gaps and strategy for filling•  Board of Directors –  Scientific Advisory Board –  Key Opinion Leaders•  Don’t list advisors unless they are actively involved 14  
  15. 15. General PowerPoint Dos and Don’ts “Presentation is a visual not a reference”Do Don’t• Use one topic per slide • Use sounds with slide transitions• Limit text on each slide • Overdo the ALL CAPS, bolded,• Use pictures, graphs, video’s italicized or underlined text –  Not all bullets • Use too many different fonts• Choose fonts and colors that are • Overuse special effects – focuseasy to read on the content• PowerPoint is the accessory to • Have technical difficulties – testYOUR presentation before the meeting• Spell Check 15  
  16. 16. PRESENTATION  SKILLS:  Part    I  •  Know  your  material  cold!    Don’t  wing  it.     •  Use  note  cards  &  appendix  slides  for  easy  access  to  informaTon.    •  DON’T  READ  your  presentaTon.      •  You  should  have  answers  to  likely  quesTons,  even  if  you  don’t  intend  to  cover  such   material  in  your  core  presentaTon.  AnTcipate  the  quesTons  –  be  surprised  only  once!  •  It’s  okay  to  not  know  everything  –  no  one  does.    Unless  someone  asks  you  something   that  you  clearly  should  know,  it  is  okay  to  directly  state  that  you  don’t  have  an  answer   and  that  you  will  get  back  to  someone.    This  builds  credibility  with  your  audience.    •  When  possible,  know  the  room.  Arrive  early,  walk  around  the  speaking  area  and   pracTce  using  the  microphone  and  any  visual  aids.    •  Wear  clothes  that  represent  you  and  which  reinforce  your  authority  and  confidence.    •  Work  to  control  filler  words  such  as  “Um” “Ah”  Eh”  or  “Like”.    Try  to  limit  distracTng   repeTTve  hand  or  body  gestures.    •  Realize  that  audiences  want  you  to  be  interesTng,  sTmulaTng,  informaTve  and   entertaining.  They’re  rooTng  for  you.     16  
  17. 17. PRESENTATION  SKILLS:  Part    II  •  PrioriTze  and  eliminate  less  criTcal  points.      •  Be  flexible  –  be  prepared  to  be  interrupted.    •  Understand  the  goal  of  your  presentaTon.      Is  it  to  inspire,  to  educate,  to  connect,  to  get   a<enTon,  to  get  a  second  more  personal  meeTng?    Your  focus  should  help  you   prioriTze.    •  Modulate  your  pace,  pitch,  volume,  tone  and  enthusiasm  –  like  when  you  are  telling  a   story.    This  helps  keep  the  audience  focused.      •  Use  humor,  personal  stories  and  conversaTonal  language  where  possible.    Your  use  of   easy  to  understand  analogies  can  help  you  draw  in  the  audience  and  create  tracTon.      •  PracTce.  PracTce.  PracTce!  Rehearse  out  loud  with  all  equipment  and  with  a  Tmer.   Allow  Tme  for  the  unexpected.    GO  SEE  OTHER  PRESENTATIONS!  •  Every  slide  should  be  consistent  with  your  corporate  image  –  each  should  bear  the   company  name  and  should  have  a  background  or  theme  consistent  with  the  company   type  or  culture.    •  Slides  should  HELP  the  oral  presentaTon,  not  BE  the  presentaTon.  Avoid  wriTng  down   your  presentaTon  on  the  slides.       17  
  18. 18. PRESENTATION  SKILLS:  Part    III  •  Always  bring  a  backup  copy  of  the  presentaTon  with  you  in  paper  and  on  a   flash  drive  (it  is  also  useful  to  have  it  available  by  web  email).    •  The  professionalism  of  the  powerpoint  may  convey  informaTon  to  the   audience  about  your  credibility.    If  it  looks  like  a  last-­‐minute  effort,  it   probably  was.      •  Without  minimizing  the  above  rule,  spend  more  Tme  building  a  great   business  and  less  building  a  great  presentaTon.  •  The  deck  is  just  a  tool.    If  the  computer  or  projector  cease  working  –  you   should  be  able  to  carry  on  with  your  presentaTon  without  geqng   flustered.    Remember,  this  is  just  a  tool,  it  is  not  the  presentaTon.    •  Stand  up  (unless  it  is  one-­‐on-­‐one)  •  Leave  Tme  for  quesTons.  •  RELAX,  BREATHE  and  SLOW  DOWN   18  
  19. 19. Interacting with Investors Basic Principles - Overview DO•  Research the investor in advance•  Realize investors are thinking about exit strategy•  Pay attention to what you say during the presentation banter•  Communicate•  Be likeable•  State your value proposition up front•  Come prepared with sufficient data (including back up slides)•  Enjoy yourself and let it show•  Keep the presentation within allotted time•  Be realistic about valuations in the market•  Make due diligence easy 19  
  20. 20. Interacting with Investors DO NOT Cautionary Overview – Don’t do the following•  Give investors a reason to turn you down•  Bash the competition•  Hype•  Condescend, talk down or be arrogant•  Be vague about your technology•  Deluge investors with facts•  Act desperate for funding (even if you are)•  Act like you don’t need money•  List ‘the company is undervalued’ as a reason to invest•  Overprice your rounds so you can keep stepping up valuation 20  
  21. 21. VC GlossaryWhat We/They say… and What We/They Really Mean…Acquisition Strategy the current products have no marketBasically on plan revenue shortfall of 25 percentCurrently revisiting the budget financial plan is in total chaosCyclical industry posted a huge loss last yearEntrepreneurial CEO totally uncontrollable, bordering on maniacalFunding Interruption investors tapped out; unwilling to fund againIngredients are there in two years we might find a workable strategyInvesting heavily in R&D trying desperately to catch the competitionLong-selling cycle yet to find a customer who likes the productPossibility of a slight shortfall a revenue shortfall of 50 percentRepositioning the business multimillion-dollar investment recently written offSomewhat below the plan revenue shortfall of 75 percentToo early to tell results to date have been grimTurnaround opportunity lost causeUnique no more than six competitorsUpgrading the management team the organization is in complete disarrayWindow of opportunity without more money, the company is dead 21  Source: Eugene Hill, SV Life Sciences Advisers, LLC at HST921, Spring 2012

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