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"How to Make your Case to Investors"

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Presented by Matthieu Vermersch of VisVires New Protein

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"How to Make your Case to Investors"

  1. 1. How to make your case to investors? 1
  2. 2. 1. The importance of doing your homework 2. Rules of a good pitch 3. Don’t sweat over your Business Plan 4. Who you are today vs. who you will become 5. Valuations, the rule of three, and what kills you Contents 2
  3. 3. The importance of doing your homework “By failing to prepare, you are preparing to fail.” - Benjamin Franklin 3 1. Who are you talking to: • VC / PE / BA ? • Track Record, Portfolio, Size, Investment Style • Make sure your pitch is audience specific. 2. The reality of a VC’s success • Their success vs. your failures 3. What are your goals & ambitions • Money / advisors / partners / network 4. Right tone • Don’t pitch your competitors
  4. 4. Rules of a good pitch (1/2) “If you can't explain it to a six year old, you don't understand it yourself.” – Albert Einstein 4 1. What is the right way to present your business • Any technological breakthroughs ? • Market opportunities • “Obviousness of you starting this company” shall be obvious to anyone 2. Be clear of your goals • Money / Glory / Impact  Don’t hide your agenda 3. “Genius is the ability to reduce the complicated to the simple.” • The most complex science must be explained in < 5 mins • GP will need to recycle ~10 times to sell it internally to rest of the partners  if he can’t, he wont. 4. Don’t oversell. Don’t undersell
  5. 5. Rules of a good pitch (2/2) 5 5. Don’t let your audience do the Comps • If you are a “me-too” idea  explain what differentiates you 6. What are the outstanding risks going forward ? • Don’t claim to be a de-risked business • Address your risks: seek VC’s advice to mitigate / time your risks • VC’s would be happy to get involved
  6. 6. 6 Don’t sweat over your Business Plan “The road to success is always under construction.” – Lily Tomlin 1. The purpose of BPs: think about all the contingencies / variables: • Can your working capital kill you? Are you hiring at the right pace? Are you pushing your next financing round too far? 2. Your projections are only as good as your assumptions: • No one will believe your sales number in 3 years • Concentrate of margin not mere CF positive • Are you a 10 or 500M USD business 3. What does a “good business” mean to you: • Profitability / fast growing / getting ahead of the competition • Many definitions = important to agree on that 4. Be mindful of KPIs to raise the next round vs. KPIs to grow
  7. 7. 7 Who you are today vs. who you will become 1. Investors invest in you and your team for 10 years • Not so much important who you are today but who you will become 2. Don’t overplay your CV. Too little experience is scary, too much is dangerous 3. Your VC will be all over you for many years  make sure u agree to wed 4. Alignment of interests is paramount. Same agenda is paramount. 5. Don’t force yourself into relationship you are not comfortable with
  8. 8. 8 Valuations, the rule of three, and what can kill you 1. Valuation is not about what you are worth… It is the equation of: i. How much money you want vs. ii. How much of your business you want (and should) to keep vs. iii. How much your investor wants to own 2. Think Cap-Table post round and work the number backwards 3. What can kill you: • High valuation • Dilution • Unnecessary bad blood around the term sheet
  9. 9. 9 Key takeaways 1. You will win within the first 10 mins and most likely lose after that 2. Your VC will be your spokesperson, mentor, and headache all in one 3. Don’t sell something or somebody you are not but never burn bridges 4. Keep the faith

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