Kristav Childress<br />NUS Enterprise Series<br />15 December 2010<br />Pitching  forCapital<br />
Pitching Vs. Presenting<br />“We PITCH to PERSUADE”<br />
Principle 1 of THE PITCH 	<br />Know <br />				Your<br />					Customer <br />                                             ...
Two (Conflicting) Investor Fears<br />Investors are afraid to invest in something that will LOSE their investment money<br...
Preparing to Pitch to Investors<br />Remember: <br />Ultimately, its mostly about the money (occasional exceptions – like ...
Principle 2 of THE PITCH	<br />Have <br />           the<br />                   Confidence<br />                         ...
Simple Is Often Not Easy<br />“I didn't have time to write a short letter . . .  so I wrote a long one instead. “<br />			...
K.I.S.S . . . Keep It . . . <br />COMPLEX (Original)	<br />“XipLink is the technology leader in wireless optimization usin...
Guy Kawasaki’s “10/20/30 Rule”<br />For presentations to potential investors:<br />	“. . . a PowerPoint presentation [to i...
The “Elevator Pitch”<br />Use it in your initial discussions with the investor (intro) and adapt to the presentation<br />...
The “Ultra Short” Pitch Sample<br />“Today, the average worker wastes 30 minutes a day just filing and searching for e-mai...
Elevator Pitch (<2Min)<br />Possible format: “Hi, I am ****, [title] of [company]. I (we) have personally seen that [BRIEF...
Sample Elevator Pitch<br />Example: “Hi, I ‘m Kris Childress, CEO of eMail Nirvana. I have personally seen that [many comp...
Principle #3: “Magic Words”<br />Practice<br />Practice<br />Practice<br />You should practice your pitch until it is comf...
What Should Be in Your Presentation?<br />Suggested Content<br />
Guy Kawasaki’s 10 Points/Slides<br />Problem (“Pain”)<br />Your solution<br />Business model<br />Underlying magic/technol...
 Rose’s Elements of Investment Pitch<br /><ul><li>Strategic Relationships
Competition
Barriers to Entry
Financial Overview
Use of Proceeds
Capital Valuation
Company Logo
Business Overview
Team
Market
Product
Business Model</li></ul>Adapted From David S. Rose's TED Presentation<br />
The Elements of the Pitch<br />
Team<br />KRIS CHILDRESS, Director of Marketing & Strategy.  Has held series of increasingly complex and responsible marke...
Market<br />Who and How big is the market?<br />What is your realistic target market?<br />How fast can you exploit this t...
Product<br />What is your product or service?<br />Why does anyone care?<br />What are people/companies using now in the a...
Business Model<br />Very simply, how do you plan to make money?Alternatives can include:<br /><ul><li>Sales
Subscription
SaaS
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NES Enterprise Series 2010 - Pitching for capital

  1. 1. Kristav Childress<br />NUS Enterprise Series<br />15 December 2010<br />Pitching forCapital<br />
  2. 2. Pitching Vs. Presenting<br />“We PITCH to PERSUADE”<br />
  3. 3. Principle 1 of THE PITCH <br />Know <br /> Your<br /> Customer <br /> (the investor)<br />
  4. 4. Two (Conflicting) Investor Fears<br />Investors are afraid to invest in something that will LOSE their investment money<br />Savvy investors are also afraid that they will MISS an outstanding investment - a Google, Microsoft, HotMail or Yahoo for example - and PASS UP HUGE RETURNS<br />
  5. 5. Preparing to Pitch to Investors<br />Remember: <br />Ultimately, its mostly about the money (occasional exceptions – like “green”)<br />Investors want to understand and trustYOU AND YOUR IDEA before give you their (clients’) money<br />The investor may not understand your technology, certainly not in detail<br />You often have only 1-2 minutes to “hook” them<br />
  6. 6. Principle 2 of THE PITCH <br />Have <br /> the<br /> Confidence<br /> to<br /> Keep<br /> It<br /> SIMPLE!<br />
  7. 7. Simple Is Often Not Easy<br />“I didn't have time to write a short letter . . . so I wrote a long one instead. “<br /> -- Mark Twain<br />American Author<br /> Message – creating a clear, simple description of your business/product/service that sells can take a lot of work.<br />
  8. 8. K.I.S.S . . . Keep It . . . <br />COMPLEX (Original) <br />“XipLink is the technology leader in wireless optimization using IETF and Space Communications Protocol Specifications (“SCPC”) standards. Wireless optimization includes protocol acceleration, data compression and HTTP optimization.” <br />SIMPLE PAIN (My Version)<br />“ We all spend time waiting for programs to run or files to download over wireless connections. XipLink is the best way to move critical data – e-mails, files and web pages – 2 to 3 times faster over a wireless connection. It cuts waiting time so that users can work faster and finish sooner.”<br />
  9. 9. Guy Kawasaki’s “10/20/30 Rule”<br />For presentations to potential investors:<br /> “. . . a PowerPoint presentation [to investors] should have ten slides, last no more than twenty minutes, and contain no font smaller than thirty points.”<br />
  10. 10. The “Elevator Pitch”<br />Use it in your initial discussions with the investor (intro) and adapt to the presentation<br />Ideally two levels:<br />An ultra short pitch, one or two sentences that capture the pain and the unique profitable solution<br />A more detailed (<2 minute) version<br />
  11. 11. The “Ultra Short” Pitch Sample<br />“Today, the average worker wastes 30 minutes a day just filing and searching for e-mails . . . costing businesses an estimated $60billion per year. Our patented “neural net” e-mail organizer reduces that wasted time by 80% and pays for itself in as little as one week.”<br />NOTE: Almost NO JARGON, concrete, value is easily understood<br />
  12. 12. Elevator Pitch (<2Min)<br />Possible format: “Hi, I am ****, [title] of [company]. I (we) have personally seen that [BRIEF description of pain/problem/need] which causes many people (businesses) a lot of [trouble/costs/etc.] They are willing to spend money to solve [problem]. We can solve it by [description of solution] which is unique and addresses the need better than [summary of existing solutions]. Other companies cannot easily duplicate this solution because of [patent, trade secret, etc.] This is a greatopportunity, with an estimated market of $X each year. May I tell you more about the opportunity and our team’s unique ability to quickly build a very large and profitable company from it?” <br />
  13. 13. Sample Elevator Pitch<br />Example: “Hi, I ‘m Kris Childress, CEO of eMail Nirvana. I have personally seen that [many companies waste thousands of man-hours filing and searching for important e-mails] which costs businesses a lot of [lost time and money, plus sometimes not responding in a timely fashion to important e-mails]. They are willing to spend money to solve [this problem of misplaced e-mails]. We can solve it by [providing an inexpensive, automated, intuitive e-mail box] which is unique and addresses the need better than [existing spam filters and e-mail folders]. Other companies cannot easily duplicate this solution because of [our unique software and trade secret technology].This is a great opportunity, with an estimated market of $350M each year. May I tell you more about the opportunity and our team’s unique ability to quickly build a very large and profitable company from it?” <br />
  14. 14. Principle #3: “Magic Words”<br />Practice<br />Practice<br />Practice<br />You should practice your pitch until it is comfortable and natural.<br />
  15. 15. What Should Be in Your Presentation?<br />Suggested Content<br />
  16. 16. Guy Kawasaki’s 10 Points/Slides<br />Problem (“Pain”)<br />Your solution<br />Business model<br />Underlying magic/technology<br />Marketing and sales<br />Competition<br />Team<br />Projections and milestones<br />Status and timeline<br />Summary and call to action<br />
  17. 17. Rose’s Elements of Investment Pitch<br /><ul><li>Strategic Relationships
  18. 18. Competition
  19. 19. Barriers to Entry
  20. 20. Financial Overview
  21. 21. Use of Proceeds
  22. 22. Capital Valuation
  23. 23. Company Logo
  24. 24. Business Overview
  25. 25. Team
  26. 26. Market
  27. 27. Product
  28. 28. Business Model</li></ul>Adapted From David S. Rose's TED Presentation<br />
  29. 29. The Elements of the Pitch<br />
  30. 30. Team<br />KRIS CHILDRESS, Director of Marketing & Strategy.  Has held series of increasingly complex and responsible marketing and sales roles with four young technology companies (3 global ) over a 25 year careerr. Currently a mentor in go-to-market strategies for young technology firms in Singapore and the US. CEO of small clean-tech firm in Singapore.  <br />Note: Emphasize experience and success, esp. in startup companies. Meaningful experience is valuable. But don’t “puff it up”.<br />
  31. 31. Market<br />Who and How big is the market?<br />What is your realistic target market?<br />How fast can you exploit this target market?<br />Example: <br />Total market is US$1B for computer UPSs<br />Realistic market segment is companies that need UPSs in remote locations: $200M<br />We can have 10% of this market ($20M) in 3 years<br />
  32. 32. Product<br />What is your product or service?<br />Why does anyone care?<br />What are people/companies using now in the absence of your product?<br />
  33. 33. Business Model<br />Very simply, how do you plan to make money?Alternatives can include:<br /><ul><li>Sales
  34. 34. Subscription
  35. 35. SaaS
  36. 36. Gain-Sharing
  37. 37. Rentals
  38. 38. Royalties
  39. 39. OEM
  40. 40. Ad Revenues
  41. 41. License Fees
  42. 42. Leases
  43. 43. Others
  44. 44. Combinations
  45. 45. What is your “unit” of revenue: units, hours, cpm? </li></li></ul><li>Strategic Relationships<br />Which companies, agencies, etc., want to partner with you, in some way, that will grow your business? (Proof, like a signed MOU, is important). Examples:<br />Retailer has committed to sell your product<br />Manufacturer will build your product into theirs<br />A government agency has promised to use your product exclusively<br />
  46. 46. Competition<br />If you say you “have NO competition” you are going to lose savvy investors. Either:<br />There is no market for the product/service<br />You are being naïve and haven’t looked at the market<br />Keep in mind that competition is not just similar technologies, but also other products that meet the need. An example is different kinds of music players (cd, mp3, etc.)<br />
  47. 47. Barriers to Entry<br />What are the barriers to entry for others? <br />Are you:<br />First to Market? (How Much Lead Time?)<br />Strong Brand? (Nikes Not “Knock Offs”)<br />Trade-Secret – Know How?<br />Patents?<br />Copyrights?<br />Standards /“natural” monopoly (like Microsoft)?<br />Strong network, partners and/or complementary technologies? – the Phokki model.<br />
  48. 48. Financial Overview<br />Build as complete a picture of the costs of doing business and your best estimates of sales, profits, returns, etc. (There are spreadsheet templates that you can customize.)<br />Have several knowledgeable people review these estimates to confirm that they are reasonable<br />There may be “optimistic”, “realistic”, “pessimistic” versions – but probably not in pitch<br />For an initial pitch, a simple projection (3-5 years) of revenues versus costs is often sufficient. KEEP . . . IT . . . SIMPLE!<br />
  49. 49. Simple Example Projected Results<br />
  50. 50. Use of Proceeds<br />What will you spend capital on?:<br />Be as simple and clear as you can about where you will spend most of the money<br />Salaries, web pages, market research, consulting, legal, travel, etc.<br />Don’t waste money but don’t “under budget”<br />Consider funding in tranches with specific milestones<br />
  51. 51. Capital Valuation<br />What is your company worth and why?<br />Not an “exact science”: the valuation of a company is almost always a negotiation<br />Some pitches do not include this, may be part of follow-up<br />
  52. 52. Some Final Thoughts<br />
  53. 53. The VC PITCH Checklist <br />Your Pitch slides with presenter notes<br />A “leave behind” version of your pitch with more details<br />A business plan<br />A 1-2 page summary of the pitched idea with very brief details<br />Product and company literature, a web page, name cards, etc.<br />
  54. 54. Some Final Points on the PitchEND<br />Be able to describe the business in 15-20 seconds if necessary<br />The Pitch – Like BP – Should be your best thinking to date<br />Focus, Focus, Focus and <br />Practice, Practice, Practice<br />Anticipate questions and answer them as much as practical in the presentation<br />Make it “natural” – passionate but not “scripted”<br />
  55. 55. A Few Final Pointers<br /><ul><li>The language on the slides (and from the presenter) should be PURFECT!
  56. 56. Best pitches are usually ONE person with others there to help with questions, demo product, etc.
  57. 57. SAY it and SHOW it: demonstrations can be great, but the product must work flawlessly.
  58. 58. Have a backup if you can’t get internet
  59. 59. Even mockups or models can make it “real”</li></li></ul><li>Addendum Slides<br />
  60. 60. Some Useful Blogs<br />All about being a startup<br />http://blog.startupprofessionals.com/<br />Blog of an investor<br />http://www.bwm748.com/<br />Blog on Presentations<br />http://www.presentationzen.com/<br />Blog Resource for Entrepreneur<br />http://venturehype.com/<br />NOTE: I follow all of these and others on Twitter<br />

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