What VCs look for in a business plan?
Agenda <ul><li>Background/ vSpring Plug </li></ul><ul><li>Venture Capital 101 </li></ul><ul><li>What VCs look for in a bus...
Background Information <ul><li>Gavin Christensen </li></ul><ul><li>Principal & Head of NM office, vSpring Capital </li></u...
vSpring Overview - 60+ deals since 2000 - Top Decile Returns $200,000,000+  -  vSpring Direct Investment  $450,000,000+  -...
vSpring Capital <ul><li>Systems Management Solutions </li></ul><ul><li>Internet and Communications </li></ul><ul><li>Life ...
What is Kickstart Fund? <ul><li>Fund Size.  $5-$10 MM fund </li></ul><ul><li>Investors:  Aligned self interest of eco-syst...
Venture Capital 101
<ul><li>Divas Hair Streaks </li></ul>What VCs don’t look for in a Business Plan
? <ul><li>Space Tug – $500 million Seed Investment </li></ul>
What hope is their for students? Software/ Internet Energy?
When? Personal Balance Sheet
What VCs are Looking For
What VCs don’t look for in a Business Plan China Syndrome :  “We estimate a conservative 1% of the Chinese market…”  Naive...
A word about business plans <ul><li>Substance over form </li></ul><ul><li>Business plans don’t get funded, businesses get ...
Key Investment Criteria:  What VCs look for in a business plan
Market Analysis <ul><li>What is the size of the market?  Have you narrowed down the market size for your product? </li></u...
Market – Understand adoption curve * Adoption Curve Time Adopters Innovators 2.5% Early Adopters 13.5% Early Majority 34% ...
Market – where startups fail * High-tech Adoption Curve Time Adopters From  Crossing the Chasm Geoffrey Moore Most Literat...
Market – early stage orbit *
Management <ul><li>What are Management’s attributes and capabilities? </li></ul><ul><ul><li>Smart, flexible? </li></ul></u...
Technology / Product <ul><li>What is the product? </li></ul><ul><li>Does is solve the customers pain? </li></ul><ul><ul><l...
Deal Structure <ul><li>Debt versus Equity </li></ul><ul><li>Investment amount </li></ul><ul><li>Deal terms </li></ul><ul><...
Traditional Venture Funding Continuum:  Where does your company fit? VALUATIONS INCREASE BUSINESS RISKS DECREASE MENTORING...
Momentum <ul><li>Can be, but not necessarily, revenue traction </li></ul><ul><ul><li>Momentum can be at the development st...
Key Investment Criteria:  What VCs look for in a business plan
Contact Information <ul><li>Gavin Christensen </li></ul><ul><li>Principal, vSpring Capital </li></ul><ul><li>[email_addres...
Upcoming SlideShare
Loading in …5
×

Gavin Christensen Presentation.ppt

1,770 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,770
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
13
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • $400 MM+ under management
  • We brought together the different elements of the eco-system into an early-stage investing vehicle that will fills the gap and align the self interest of each member of the eco-system
  • This is an excerpt from their email: “DIVAS Snap-in, colored hair extensions. A profit machine, with everything in place, ready to explode. TREND Timing couldn&apos;t be better. Hair color and hair extensions are in . And projected to remain in for years to come.” The graphics are also from their email (they didn’t send a business plan, just an email).
  • This is the entire plan that they sent to us. I’m not sure what these glasses do, but they look a little odd. Plus, never trust a plan that says they put “the needs of the consumer over the need for profits.”
  • Market size is only a small part of the equation. Many other things need to be in place besides a Billion dollar market.
  • Control4 $1.6 M Bio Micro $1.4 M Landesk $75 million Symbiot $15 million My Family $135 Revenue, $148 Sales Comscore $44 M Fatpipe $4.7 M Mediconnect $4.8
  • Control4 $1.6 M Bio Micro $1.4 M Landesk $75 million Symbiot $15 million My Family $135 Revenue, $148 Sales Comscore $44 M Fatpipe $4.7 M Mediconnect $4.8
  • Control4 $1.6 M Bio Micro $1.4 M Landesk $75 million Symbiot $15 million My Family $135 Revenue, $148 Sales Comscore $44 M Fatpipe $4.7 M Mediconnect $4.8
  • Market size is only a small part of the equation. Many other things need to be in place besides a Billion dollar market.
  • Gavin Christensen Presentation.ppt

    1. 1. What VCs look for in a business plan?
    2. 2. Agenda <ul><li>Background/ vSpring Plug </li></ul><ul><li>Venture Capital 101 </li></ul><ul><li>What VCs look for in a business plan? </li></ul>
    3. 3. Background Information <ul><li>Gavin Christensen </li></ul><ul><li>Principal & Head of NM office, vSpring Capital </li></ul><ul><li>Managing Director, Kickstart Fund </li></ul><ul><li>Boards: Symbiot, Intelisum </li></ul><ul><li>Board Observer: Aspen Avionics, Veralight, Exagen Diagnostics </li></ul><ul><li>Previous Experience </li></ul><ul><li>Fidelity Investments, Monitor Group, vSpring analyst & associate, Google </li></ul><ul><li>MBA, Kellogg School of Management </li></ul><ul><li>BS Economics, Brigham Young University </li></ul><ul><li>Married with two children </li></ul>
    4. 4. vSpring Overview - 60+ deals since 2000 - Top Decile Returns $200,000,000+ - vSpring Direct Investment $450,000,000+ - Co-investors $650,000,000+ - Total (since 2000)
    5. 5. vSpring Capital <ul><li>Systems Management Solutions </li></ul><ul><li>Internet and Communications </li></ul><ul><li>Life Sciences </li></ul><ul><li>Arizona </li></ul><ul><li>Colorado </li></ul><ul><li>New Mexico </li></ul><ul><li>Utah </li></ul>Mountain West <ul><li>Early Stage—first institutional money in </li></ul><ul><li>$3-6M pre-money (Series A) </li></ul><ul><li>Invest $1-5M up front, $10-12M over life of deal </li></ul><ul><li>Target ownership of 15-30% at exit </li></ul><ul><li>Governance rights </li></ul>Sector Expertise Regional Advantage Stage Focus
    6. 6. What is Kickstart Fund? <ul><li>Fund Size. $5-$10 MM fund </li></ul><ul><li>Investors: Aligned self interest of eco-system: Universities, Angel Investors, VCs, Entrepreneurs </li></ul><ul><li>Focus: Launch 20-30 seed-stage technology deals at $50-$200K per investment </li></ul><ul><li>Management: New Seed fund is managed by venture fund with investment committee of: university, venture capitalists, and angel investors </li></ul><ul><li>Carried Interest: Much of carried interest profits going back to the community (Universities & community) </li></ul>
    7. 7. Venture Capital 101
    8. 8. <ul><li>Divas Hair Streaks </li></ul>What VCs don’t look for in a Business Plan
    9. 9. ? <ul><li>Space Tug – $500 million Seed Investment </li></ul>
    10. 10. What hope is their for students? Software/ Internet Energy?
    11. 11. When? Personal Balance Sheet
    12. 12. What VCs are Looking For
    13. 13. What VCs don’t look for in a Business Plan China Syndrome : “We estimate a conservative 1% of the Chinese market…” Naiveté: “The company has a first mover advantage and therefore will have no competition.” Engineer – Group Think: “Since we have the most brilliant engineers we are sure to have the best technology and become the market leader.” False Precision (MBA group think): “In year 5, we will have revenues of $50.23 MM, generating a ROI for investors of 55.45% IRR” Lack of “do-er” fallacy: “With consultants from each of the top strategy firms our management team is built for success.”
    14. 14. A word about business plans <ul><li>Substance over form </li></ul><ul><li>Business plans don’t get funded, businesses get funded </li></ul><ul><li>Do your homework </li></ul>
    15. 15. Key Investment Criteria: What VCs look for in a business plan
    16. 16. Market Analysis <ul><li>What is the size of the market? Have you narrowed down the market size for your product? </li></ul><ul><li>What is the market structure? Channels? Buying patterns? </li></ul><ul><li>Is the market growing? </li></ul><ul><li>Who are the competitors in the market? How do you plan on obtaining market share? </li></ul><ul><li>Exit Multiples in the market? </li></ul><ul><li>What is the market pain? Pain Killers vs. Vitamins. What do customers want? </li></ul>
    17. 17. Market – Understand adoption curve * Adoption Curve Time Adopters Innovators 2.5% Early Adopters 13.5% Early Majority 34% Late Majority 34% Laggards 16% From Diffusion of Innovation Everett Rogers Pragmatist: Stick with the herd!
    18. 18. Market – where startups fail * High-tech Adoption Curve Time Adopters From Crossing the Chasm Geoffrey Moore Most Literature focuses on this phase Most startups don’t make it through the this stage
    19. 19. Market – early stage orbit *
    20. 20. Management <ul><li>What are Management’s attributes and capabilities? </li></ul><ul><ul><li>Smart, flexible? </li></ul></ul><ul><ul><li>Airplane test? </li></ul></ul><ul><ul><li>Complementary skill sets? </li></ul></ul><ul><li>What is management’s background? </li></ul><ul><ul><li>Have they had entrepreneurial experience? </li></ul></ul><ul><ul><li>Does the team have industry experience? </li></ul></ul><ul><ul><li>Has the team worked together before? </li></ul></ul>
    21. 21. Technology / Product <ul><li>What is the product? </li></ul><ul><li>Does is solve the customers pain? </li></ul><ul><ul><li>How do you know it solves the customers pain? </li></ul></ul><ul><ul><li>How do you know the demand for the product? </li></ul></ul><ul><li>What is the IP position for the product? </li></ul><ul><ul><li>Have patents been filed? </li></ul></ul><ul><ul><li>What is your IP strategy? </li></ul></ul>
    22. 22. Deal Structure <ul><li>Debt versus Equity </li></ul><ul><li>Investment amount </li></ul><ul><li>Deal terms </li></ul><ul><li>What is the pre-money value? </li></ul><ul><ul><li>What stage is the company? </li></ul></ul><ul><ul><li>Are they generating revenue? </li></ul></ul><ul><li>Control provisions e.g. Board Structure </li></ul>
    23. 23. Traditional Venture Funding Continuum: Where does your company fit? VALUATIONS INCREASE BUSINESS RISKS DECREASE MENTORING NEEDS DECREASE SEED/START-UP FUNDING DEVELOPMENT FUNDING EXPANSION FUNDING OPPORTUNITY DEVELOPMENT $5M-20M $500K-5M $50K-500K CONTINUED GROWTH >$20M Sweat ANGELS & FOUNDERS VENTURE CAPITAL PUBLIC MARKETS
    24. 24. Momentum <ul><li>Can be, but not necessarily, revenue traction </li></ul><ul><ul><li>Momentum can be at the development stage (pre-revenue) </li></ul></ul><ul><ul><li>Is the market excited about the product? </li></ul></ul><ul><ul><li>What is the input from customers? </li></ul></ul><ul><ul><ul><li>Trade Shows </li></ul></ul></ul><ul><ul><ul><li>Focus Groups </li></ul></ul></ul><ul><ul><ul><li>Industry Experts </li></ul></ul></ul><ul><ul><ul><li>Articles/ Blogosphere </li></ul></ul></ul><ul><ul><ul><li>Online traffic indicators </li></ul></ul></ul>
    25. 25. Key Investment Criteria: What VCs look for in a business plan
    26. 26. Contact Information <ul><li>Gavin Christensen </li></ul><ul><li>Principal, vSpring Capital </li></ul><ul><li>[email_address] </li></ul>

    ×