Planning & Communicating your Business Concept Andrew Harrison March 2006

Presentation Overview Tools of the Trade Myths and Truths Overview of the Tools The Elevator Pitch The ‘One-Pager’ Executive Summary White Paper PowerPoint Presentation The Business Plan Outlines and Content Advice

Tools of the Trade

Myths and Truths

Overview of the Tools

The Elevator Pitch

The ‘One-Pager’

Executive Summary

White Paper

PowerPoint Presentation

The Business Plan

Outlines and Content

Advice

Tools of the Trade

Tools of the Trade The ‘Elevator Pitch’ – 30 second outline of business concept The ‘One-Pager’ – 1 page overview of your business Executive Summary – 3-5 page overview of your business White Paper – Layman’s summary of your technology, product(s), the uniqueness and the value PowerPoint Presentation – ~15 slide outline of your business plan Business Plan – Detailed description of your business plan: product plan, go-to-market strategy, detailed management team profiles and financials.

The ‘Elevator Pitch’ – 30 second outline of business concept

The ‘One-Pager’ – 1 page overview of your business

Executive Summary – 3-5 page overview of your business

White Paper – Layman’s summary of your technology, product(s), the uniqueness and the value

PowerPoint Presentation – ~15 slide outline of your business plan

Business Plan – Detailed description of your business plan: product plan, go-to-market strategy, detailed management team profiles and financials.

Why do we need these tools? These tools are generally used to: Solicit investment – by communicating to investors why your idea is good, how you will execute and what return they can expect Communicate to customers – why they should do business with you Communicate to partners – why they should do business with you Communicate to employees or potential hires – what is the mission and plan is and what role they will play Lay out a vision and plan for building the business These tools are used for communication and planning

These tools are generally used to:

Solicit investment – by communicating to investors why your idea is good, how you will execute and what return they can expect

Communicate to customers – why they should do business with you

Communicate to partners – why they should do business with you

Communicate to employees or potential hires – what is the mission and plan is and what role they will play

Lay out a vision and plan for building the business

Communication vs. Business Planning The primary purpose of these documents is to communicate the value of your business idea – EXCEPT THE BUSINESS PLAN Be conscious of the huge difference between communicating your business concept and building your business plan A business plan is an internal planning document seldom shown to anyone outside the company The other documents are external communication documents used to sell the value of your business idea to outside parties Business plans are an internal execution tools The other documents are external communications tools

The primary purpose of these documents is to communicate the value of your business idea – EXCEPT THE BUSINESS PLAN

Be conscious of the huge difference between communicating your business concept and building your business plan

A business plan is an internal planning document seldom shown to anyone outside the company

The other documents are external communication documents used to sell the value of your business idea to outside parties

Keys to Communication Know your audience: Institutional (Financial) investor, Strategic investor, Angel investor, Strategic partner, Customer, etc. Speak to your audience in language that they understand: Institutional investor – do not speak ‘techie’, tie everything back to money Strategic investor – may be more technical; will be interested in your idea’s as they impact their business Strategic Partner – mix of technical and business; understand how a relationship will be mutually profitable to both parties Angel Investors - access their background; understand their interests Customer – understand their needs Give your audience the information they are looking for: Do not assume they want to see the depth of your scientific knowledge Speak to them with their interests in mind, not your interests in mind

Know your audience:

Institutional (Financial) investor, Strategic investor, Angel investor, Strategic partner, Customer, etc.

Speak to your audience in language that they understand:

Institutional investor – do not speak ‘techie’, tie everything back to money

Strategic investor – may be more technical; will be interested in your idea’s as they impact their business

Strategic Partner – mix of technical and business; understand how a relationship will be mutually profitable to both parties

Angel Investors - access their background; understand their interests

Customer – understand their needs

Give your audience the information they are looking for:

Do not assume they want to see the depth of your scientific knowledge

Speak to them with their interests in mind, not your interests in mind

Myths and Truths

Myths and Truths Myths: That you only have 30 seconds to get a VC’s attention If you get develop your communication tools right, you will have longer than that That a VC will ask you for all of these documents That you should start by building your business plan Truths: What you can provide depends on how far along you are in developing your business concept The vision you are communicating must be grounded in reality You should be strategic about what you provide and when you provide it That your documentation should radiate professionalism – grammar, spelling, diction, illustration, layout, etc.

Myths:

That you only have 30 seconds to get a VC’s attention

If you get develop your communication tools right, you will have longer than that

That a VC will ask you for all of these documents

That you should start by building your business plan

Truths:

What you can provide depends on how far along you are in developing your business concept

The vision you are communicating must be grounded in reality

You should be strategic about what you provide and when you provide it

That your documentation should radiate professionalism – grammar, spelling, diction, illustration, layout, etc.

Overview of The Tools

The Elevator Pitch What: A 30 second overview of your business concept To a certain extent, an internet bubble invention – at least in terms of raising money Strangely enough - 60% of the worlds venture capital is in the bay area in low-rise office buildings without elevators Why: To quickly communicate your business concept in a chance meeting or phone call When: In a cold call to an investor, customer, potential partner, etc. Good for networking at trade shows, networking events, etc. Dos and Don’ts: Do not spend forever practicing and refining this – should come naturally; may sound plastic Figure out a few key messages you would like to get across to use as a loose script Distribute key messages to outward facing employees – standardize message

What:

A 30 second overview of your business concept

To a certain extent, an internet bubble invention – at least in terms of raising money

Strangely enough - 60% of the worlds venture capital is in the bay area in low-rise office buildings without elevators

Why:

To quickly communicate your business concept in a chance meeting or phone call

When:

In a cold call to an investor, customer, potential partner, etc.

Good for networking at trade shows, networking events, etc.

Dos and Don’ts:

Do not spend forever practicing and refining this – should come naturally; may sound plastic

Figure out a few key messages you would like to get across to use as a loose script

Distribute key messages to outward facing employees – standardize message

The ‘One-Pager’ What: A concise one-page summary of your business concept and management team Why: A ‘teaser’ document meant to generate a request for more information To offer a very general non-confidential overview of your business When: When blasting out to many potential investors – select interested VCs from large list When you don’t want to offer any confidential details – chance encounter, potential competitor,etc Dos and Don’ts: I’m not a big fan – Part of ‘shotgun’ approach to fundraising, not my preferred method Often just enough detail to say no Often adds an additional and debatably unnecessary stage to a process - VCs might sit on the one-pager for a few weeks If you are going to build one, make it fairly non-contentious and allude to missing information

What:

A concise one-page summary of your business concept and management team

Why:

A ‘teaser’ document meant to generate a request for more information

To offer a very general non-confidential overview of your business

When:

When blasting out to many potential investors – select interested VCs from large list

When you don’t want to offer any confidential details – chance encounter, potential competitor,etc

Dos and Don’ts:

I’m not a big fan – Part of ‘shotgun’ approach to fundraising, not my preferred method

Often just enough detail to say no

Often adds an additional and debatably unnecessary stage to a process - VCs might sit on the one-pager for a few weeks

If you are going to build one, make it fairly non-contentious and allude to missing information

The Executive Summary What: A concise 3-5 page summary of your technology, product, sales plan, revenue path and financial requirements Significantly more detailed but succinctly expressed, coherent and highly readable Why: Again, a ‘teaser’ document meant to generate a request for more information or a meeting VCs will want to get their head around the concepts quickly – short attention span Primer for a more detailed explanation of your product plan and business strategy When: When you have a ‘warm’ intro or an invitation to contact someone Integral first interaction with an investor Rides the line between confidential and non-confidential – some degree of trust Dos and Don’ts: This is a critical communications tool – imperative that it is strong and well written Has to have the right emphasis given the maturity of the business concept - Tech, Sales, Revs

What:

A concise 3-5 page summary of your technology, product, sales plan, revenue path and financial requirements

Significantly more detailed but succinctly expressed, coherent and highly readable

Why:

Again, a ‘teaser’ document meant to generate a request for more information or a meeting

VCs will want to get their head around the concepts quickly – short attention span

Primer for a more detailed explanation of your product plan and business strategy

When:

When you have a ‘warm’ intro or an invitation to contact someone

Integral first interaction with an investor

Rides the line between confidential and non-confidential – some degree of trust

Dos and Don’ts:

This is a critical communications tool – imperative that it is strong and well written

Has to have the right emphasis given the maturity of the business concept - Tech, Sales, Revs

The Whitepaper What: A fairly concise layman’s summary of your technology, product(s), the uniqueness and the value Why: Not all (or few) investors will be scientists, engineers or experts in your area of innovation You have to go easy on the technical details in the communications documents This is the place to fully display your technical knowledge and product vision When: After investors are curious or have bought into the big picture business vision Great to give to customers and partners to help them communicate internally General education of analysts, customers, potential partners, etc. Dos and Don’ts: Stay high level - Don’t go so deep as to give away all of your secrets Keep it as short as possible and fully explain all acronyms

What:

A fairly concise layman’s summary of your technology, product(s), the uniqueness and the value

Why:

Not all (or few) investors will be scientists, engineers or experts in your area of innovation

You have to go easy on the technical details in the communications documents

This is the place to fully display your technical knowledge and product vision

When:

After investors are curious or have bought into the big picture business vision

Great to give to customers and partners to help them communicate internally

General education of analysts, customers, potential partners, etc.

Dos and Don’ts:

Stay high level - Don’t go so deep as to give away all of your secrets

Keep it as short as possible and fully explain all acronyms

The PowerPoint Deck What: A ~15 slide outline of the key aspects of your business plan Why: Provide an overview of the business plan in point form Allows people to absorb a lot of key information in a short period of time Easy to adjust and adapt to a new audience When: Usually the second piece of information a VC will receive after the exec summary VC’s love these because they can flip through them very fast Medium to highly proprietary – requires a greater degree of trust Dos and Don’ts: Critical document in the fundraising process –present a sound story; make it look good Practice speaking to it, preferably in front of friendly people who will ask lots of questions Use graphics as much as possible – max absorbance of information Tune emphasis given the maturity of the business concept

What:

A ~15 slide outline of the key aspects of your business plan

Why:

Provide an overview of the business plan in point form

Allows people to absorb a lot of key information in a short period of time

Easy to adjust and adapt to a new audience

When:

Usually the second piece of information a VC will receive after the exec summary

VC’s love these because they can flip through them very fast

Medium to highly proprietary – requires a greater degree of trust

Dos and Don’ts:

Critical document in the fundraising process –present a sound story; make it look good

Practice speaking to it, preferably in front of friendly people who will ask lots of questions

Use graphics as much as possible – max absorbance of information

Tune emphasis given the maturity of the business concept

The Business Plan What: A rigorously prepared and executable description of how you will build your business Why: This is your roadmap for how you are going to build your business Describes roles and responsibilities for building various aspects of the business Outlines revenue targets, financial details and investment requirements When: When you have assembled enough solid information to write it Highly proprietary – requires a high degree of trust to give it out; later stages of diligence Wait for the VC to ask for it Dos and Don’ts: Often made a condition of financing or a board requirement – can provide after the fact Re-write with every major change in strategic tack – living document Avoid the temptation to turn this into a sales tool – preserve its integrity as an executable

What:

A rigorously prepared and executable description of how you will build your business

Why:

This is your roadmap for how you are going to build your business

Describes roles and responsibilities for building various aspects of the business

Outlines revenue targets, financial details and investment requirements

When:

When you have assembled enough solid information to write it

Highly proprietary – requires a high degree of trust to give it out; later stages of diligence

Wait for the VC to ask for it

Dos and Don’ts:

Often made a condition of financing or a board requirement – can provide after the fact

Re-write with every major change in strategic tack – living document

Avoid the temptation to turn this into a sales tool – preserve its integrity as an executable

Outlines and Contents

Executive Summary ~ 3-5 pages Company Description – 1 paragraph Basic Need and Company Solution – 1 paragraph Technology and Product(s) – 1 paragraph; diagram Value Proposition – couple of bullets Market Size and Growth – diagram Sales Plan – 1 paragraph Competitive Advantages – couple of bullets Management – detailed bullets Revenue Growth and Margins – diagrams Financing Requirements – 1 paragraph

Company Description – 1 paragraph

Basic Need and Company Solution – 1 paragraph

Technology and Product(s) – 1 paragraph; diagram

Value Proposition – couple of bullets

Market Size and Growth – diagram

Sales Plan – 1 paragraph

Competitive Advantages – couple of bullets

Management – detailed bullets

Revenue Growth and Margins – diagrams

Financing Requirements – 1 paragraph

PowerPoint Deck ~ 15 slides Company Overview, Management and Vision – 2-3 slides Need and Existing Solutions – 1-2 slides Technology, Products and Product Rollout – 2-3 slides Market Opportunity – 1 Slide (Graphical) Competitive Overview – 1 Slide – (Largely Graphical) Sales Strategy and Channels - 2-3 slides Partnerships and/or Partnerships strategy – 1 slide Financials and Path to Liquidity – 2-3 Slides (Largely Graphical)

Company Overview, Management and Vision – 2-3 slides

Need and Existing Solutions – 1-2 slides

Technology, Products and Product Rollout – 2-3 slides

Market Opportunity – 1 Slide (Graphical)

Competitive Overview – 1 Slide – (Largely Graphical)

Sales Strategy and Channels - 2-3 slides

Partnerships and/or Partnerships strategy – 1 slide

Financials and Path to Liquidity – 2-3 Slides (Largely Graphical)

The Business Plan ~ 30 pages Executive Summary Company and Opportunity Summary Product and Technology Market Size and Growth Sales and Marketing Plan Competitive Overview Operations Plan Management Team Financials and Investment Requirements

Executive Summary

Company and Opportunity Summary

Product and Technology

Market Size and Growth

Sales and Marketing Plan

Competitive Overview

Operations Plan

Management Team

Financials and Investment Requirements

Advice

Advice… Do not start by building your business plan You will not have the information you need You will examine issues out of priority You will expose lack of understanding Do not offer to supply a business plan off the bat Start dumping your ideas into the Powerpoint Deck Use the Powerpoint Deck as receptacle for all ideas and information that comes to light – easy to manipulate, organize and adapt Build your executive summary and eventually your business plan based on your Powerpoint deck Give investors your exec summary and offer to walk them through the Powerpoint slides in person or on the phone

Do not start by building your business plan

You will not have the information you need

You will examine issues out of priority

You will expose lack of understanding

Do not offer to supply a business plan off the bat

Start dumping your ideas into the Powerpoint Deck

Use the Powerpoint Deck as receptacle for all ideas and information that comes to light – easy to manipulate, organize and adapt

Build your executive summary and eventually your business plan based on your Powerpoint deck

Give investors your exec summary and offer to walk them through the Powerpoint slides in person or on the phone

More advice … The main idea of all of this is to entice investors to take a deeper look Leave the details for diligence (except in the business plan) Do not assume that your audience is technically literate or savvy Investors predominantly come from a financial background Do not overload the documentation Try to get across a few key messages instead of telling the whole story Your audience will only absorb the key messages Do not make your information detail rich / noisy – Use graphics as much as possible Templates exist for all of these documents Don’t re-invent the wheel Surf the web or go to www.primaxis.com

The main idea of all of this is to entice investors to take a deeper look

Leave the details for diligence (except in the business plan)

Do not assume that your audience is technically literate or savvy

Investors predominantly come from a financial background

Do not overload the documentation

Try to get across a few key messages instead of telling the whole story

Your audience will only absorb the key messages

Do not make your information detail rich / noisy – Use graphics as much as possible

Templates exist for all of these documents

Don’t re-invent the wheel

Surf the web or go to www.primaxis.com

Questions / Discussions

Planning & Communicating your Business Concept Andrew Harrison Vice President [email_address] 416.643.2214