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MoBowl Pitch Errors -EvoNexus

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Evaluate this pitch from the perspective of a VC - see if you can catch all they typical errors we see in pitches. The second half has most of the errors spelled out.

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MoBowl Pitch Errors -EvoNexus

  1. 1. MoBowl - consumers Check availability near you Book a bowling lane (or pool table, endless possibilities!) Discounts on lanes & rentals Share with your friends to join your game Delivered as a FREE smart phone app & web booking portal SoMoLo!!! Viral
  2. 2. MoBowl - merchants Mobile app & web portal for merchants You can easily input the availability of your location into the app Systems exist separate from the in-house solutions and fit seamlessly with your current work environment Flexibility to discount when needed: weekdays, mid-days, holidays, etc.
  3. 3. Market = HUGE! $5B industry - JUST FOR THE BOWLING PART 7-8K bowling alleys Avg 8 lanes each $20 per hour rental 12hrs per day, 330 days per year Other verticals (pool, darts, etc.)  at least $50B
  4. 4. Competition (?) Really? NONE. ~Apps for other industries, won’t move into our space We are too fast, Have first-mover advnatage & generate a huge network + following
  5. 5. Show me the MONEY! Advertising - Free model only Affiliate Deals - Equipment - Lessons/training Merchant Deals - 25% cut for us Premium App - Get rid of apps - $5 for lifetime Revenue Share - 10% of every booking Store - buy MoBowl exclusive items
  6. 6. Financial Scenarios Worst case Best case Conservative case 3 year IRR: 43.7% 12.48x multiple New verticals launch 1y 2y 3y $1B $100M $10M $0M Breakeven at month 4.5
  7. 7. The (most amazing) Team Austin Neudecker, M.B.A. Training to be a professional bowler MBA from online university Ex-entrepreneur - sold lemonade in front of house as a kid Suzy Smith Social marketing guru Heavy iPhone app user 100+ tweets per year with over 100 followers
  8. 8. Technology Special Sauce Innovative application Solid IP - patent-pending booking technology Post to social networks as you book! Amazing & cheap development off-shore to build
  9. 9. Where you come in… Funded by f&f for $150K so far Raising $1M (closing end of week) $25M pre-money valuation Exit for over $200M in 3yrs at 10x multiple USE of Proceeds: Build app via outsourcing agreement Salary for team of 5 (market rates) Market the hell out of it Legal fees & repayment of debt Unique & uber-profitable opportunity: IRR ~58%
  10. 10. Now YOU be the judge… Would you consider investing? What was GOOD? What was BAD? • Structure was ~there • Fairly brief (10 slides), high-level • Enthusiasm? • Let’s go slide by slide…
  11. 11. There are a multitude of resources that teach you how to make the perfect pitch deck for your startup. This deck takes the opposite approach: meant to illustrate what NOT to do as you craft your message to potential investors
  12. 12. Ok, this slide is ~awesome! Simple, visual, concise Easy to understand, used a use-case?
  13. 13. Busy & full of clichés (e.g. SoMoLo, MoBowl - consumers Check availability near you Book a bowling lane (or pool table, endless possibilities!) Discounts on lanes & rentals Share with your friends to join your game Delivered as a FREE smart phone app & web booking portal SoMoLo!!! Viral Viral, etc.). Instead, focus on the unique value proposition in the description. Relatively unimportant Non-essential, assumed Cliché Valueless clutter Cliché Wait, what’s the problem?
  14. 14. Remove “MoBowl” here. Use FEWER words, and keep it simple. MoBowl - merchants Mobile app & web portal for merchants You can easily input the availability of your location into the app Systems exist separate from the in-house solutions and fit seamlessly with your current work environment Flexibility to discount when needed: weekdays, mid-days, holidays, etc. Change to: “Simple to input availability” Change to: “Easy integration” Change to: “Flexibility to discounts as needed” How are you solving the Marketplace problem??
  15. 15. Market = HUUUGE! $5B industry - JUST FOR THE BOWLING PART 7-8K bowling alleys Avg 8 lanes each $20 per hour rental 12hrs per day, 330 days per year Other verticals (pool, darts, etc.)  at least $50B Don’t exaggerate! Market over-estimation is a common newbie mistake. Quantification is great, but in this case, the numbers are wrong. This slide quantifies the size of the entire industry, when it should instead talk about the addressable market. Focus on the following questions: If the product or service is sold at the proposed price to the target audience of reasonable buyers, how big is that? In this case, how much would bowling alleys pay for mobile booking services? Be reasonable. Stick with expansions you can expect to manage in the term of the investment, usually around ~3 years. These bullet points are messy and inconsistent.
  16. 16. Classic mistake: there is ~always competition, most likely it is not direct. What is fighting for the consumers attention or similar dollars. Mention your (nearest) competitors and show investors that you have performed your due diligence. Competition (?) Really? NONE. What are the current substitutes??? Speed, 1st mover, traction and virality are all great, but they’re not sustainable ~Apps for other industries, Again, messy, won’t move into our inconsistent space and typos We are too fast, competitive advantages. It’s much better to emphasize the following advantages, if you have them: locking up exclusive channels, complex technology that is very hard to replicate, IP (if applicable), Have first-mover advnatage etc. & generate a huge network + following
  17. 17. There are way too many business models shown here. Instead, focus on the one, maybe two, that will be the primary revenue steams – and don’t Show me the MONEY! Advertising - Free model only Affiliate Deals - Equipment - Lessons/training include the rest. Merchant Deals - 25% cut for us Premium App - Get rid of apps - $5 for lifetime Revenue Share - 10% of every booking Store - buy MoBowl exclusive items
  18. 18. Financial Scenarios Worst case Best case Conservative case 3 year IRR: 43.7% 12.48x multiple New verticals launch 1y 2y 3y $1B $100M $10M $0M Breakeven at month 4.5 This slide is Log scales, just crazy seriously?? Never project a return or multiple – that’s the investor’s job. Worst case is a Strange curves with hockey stick? justification will make an investor wary of your judgment Highly detailed financial projections + hypothetical scenario = amateur
  19. 19. The (most amazing) Team Austin Neudecker …make sure that your team shows real expertise. Faking it is usually apparent quickly, and if not, it will be Tries to be somewhat relevant, but… Training to be a professional bowler MBA from online university Ex-entrepreneur - sold lemonade in front of house as a kid Suzy Smith Your girlfriend doesn’t make a good teammate, for many reasons… discovered in diligence. Tech company without tech talent? If you’re a tech company, get a tech Social marketing guru Heavy iPhone app user 100+ tweets per year with over 100 followers member! No picture? Be consistent! Use Logos
  20. 20. Technology Special Sauce Innovative application Usually software and business process are not viewed as incredibly valuable IP, especially if it’s pending. Solid IP - patent-pending booking technology Post to social networks as you book! Too easy to mention Amazing & cheap development off-shore to build DANGER: Outsourcing long-term (when products go through constant iterations and need support) is HARD and viewed negatively!
  21. 21. Where you come in… Don’t try to value your own business, especially $25M. Pre-launch/development values are rarely over 1-4M depending on your traction. At this stage, MoBowl won’t raise $1 million. Usually founders get/take very little salary, which is likely in the range of 0-70% of market. Other early teammates can expect around 70- 80% market rates. Unique & uber-profitable opportunity: IRR ~58% Be consistent with numbers, & NO IRRs! Funded by f&f for $150K so far Raising $1M (closing end of week) $25M pre-money valuation Exit for over $200M in 3yrs at 10x multiple USE of Proceeds: Build app via outsourcing agreement Salary for team of 5 (market rates) Market the hell out of it Legal fees & repayment of debt
  22. 22. What else was missing? • Traction • The Product • Milestones to be Achieved (in the ask) Any last questions?
  23. 23. Resources: Watch YC / TechStars / DreamIt Demo Day videos My blog: aneudecker.com 3 Questions Entrepreneurs Get Wrong Stop Raising…Please! + I will repost the updated version of this deck

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