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Startup Heroes ©Copyright 2013 Steve Austin, All Rights Reserved 1How to Pitch the Wow!to InvestorsBy Steve Austinsaustin7...
Startup Heroes“Whatever you can door dream you can,begin it.Boldness has genius,power and magic in it!”Johann Wolfgang von...
Startup HeroesWE ARE NOT ATTORNEYSGET LEGAL ADVICE!Follow SEC RULES – Stay out of Trouble!©Copyright 2013 Steve Austin, Al...
Startup HeroesAgenda1st hrPitchWhat aboutAngels?What InvestorsNeed2nd hrMake it SimplePitch to Group©Copyright 2013 Steve ...
Startup Heroes4 Steps1.“Why”I believe…2.“Wow”Factor©Copyright 2013 Steve Austin, All Rights Reserved 53.BusinessModel4.Sim...
Startup HeroesAct Like a Leader!People followInspirationalExtra effortCredibilityHumorFairListensResponsibleNot defensiveL...
Startup HeroesPitch Basics1. Be Confident2. Don’t apologize3. No “superlatives”– Huge market,– Fastest widget, etc4. Use f...
Startup HeroesMost Important to Investors –Especially Angels1.YOU & Team2.Your ability to make ithappen©Copyright 2013 Ste...
Startup HeroesPitching60 Second Pitch• 20 Sec Pitch– 1 Sentence each point• 60 Sec Pitch– 2 – 3 sentences/point– Prioritiz...
Startup Heroes20 Second Elevator Pitch• Name• Title @ Company Name• “I believe __ (what isreally important to you)• Proble...
Startup HeroesAngelInvestors©Copyright 2013 Steve Austin, All Rights Reserved 11
Startup HeroesThink Like an AngelEntrepreneur©Copyright 2013 Steve Austin, All Rights Reserved 12
Startup Heroes1. Net Worth $1Million +2. Not including primaryresidence, or3. Income $200,000/yr last 2 yrs4. $300,000 if ...
Startup HeroesWhat’s the 1 Thing AngelsWant Most?©Copyright 2013 Steve Austin, All Rights Reserved 14They don’twant to loo...
Startup HeroesAngel Investors1. Invest their own money2. Not someone elses $ (like VC)3. Write you a personal check $4. Do...
Startup HeroesWhat is Usual Start-up’s ROI?Its terrible!About 90/100 failAlmost anything else is better!©Copyright 2013 St...
Startup HeroesHow Much $ Invest of Total Wealth?Prudent: Max 5% wealthWealth Invest $/Y$5M $250K $50-100K$10 M $500K $50-1...
Startup HeroesInvestmentStages©Copyright 2013 Steve Austin, All Rights Reserved 18
Startup Heroeswww.privco.com/knowledge-bank/private-equity-and-venture-capitalInvestment Stages©Copyright 2013 Steve Austi...
Startup Heroeswww.privco.com/knowledge-bank/private-equity-and-venture-capitalInvestment Stages©Copyright 2013 Steve Austi...
Startup HeroesValuationCEOs JobIncrease Value$SeedSeedPre-Money Value+ $ Investment= Post $ExampleExample$1.2M+ 400K Inves...
Startup HeroesWhat if Value Goes Down?CEOs JobIncrease ValueSeries ASeries A$10 M = 55%+ 8 M = 45%$18 M =100%Series BSerie...
Startup HeroesEffect ofAnti-Dilutionon Founders©Copyright 2013 Steve Austin, All Rights Reserved 23
Startup HeroesWhat Do AngelsLook For?©Copyright 2013 Steve Austin, All Rights Reserved 24
Startup HeroesMike Levinson, DreamIt VenturesAn angel investor… looks athttp://www.inc.com/guides/2010/10/how-to-pitch-to-...
Startup Heroeshttp://www.youtube.com/watch?v=mBS0OWGUidcJerry McGuire – Movie“Show Me the Money!”2©Copyright 2013 Steve Au...
Startup HeroesAngels Need to Know the $ Story2©Copyright 2013 Steve Austin, All Rights Reserved 271.How much $do youneed?2...
Startup HeroesINVESTORCONCERNS©Copyright 2013 Steve Austin, All Rights Reserved 28
Startup HeroesWhat Entrereneur Sees©Copyright 2013 Steve Austin, All Rights Reserved 29Photos used withut permission with ...
Startup HeroesWhat Investor Sees: Alternatives©Copyright 2013 Steve Austin, All Rights Reserved 30OurSolutionfor ProblemOu...
Startup HeroesWhy So Much Return?5 investments2 Fail1 Walking dead1 Maybe1 Great return!20 XNeeds 5-20 Xto coverHigh RISK ...
Startup HeroesSlide Deck TemplateFromangelsforum.com©Copyright 2013 Steve Austin, All Rights Reserved 32
Startup HeroesCompany Name“One Line Mission Statement”Before you start presentation,introduce yourself andthe general conc...
Startup Heroes1. The Problem• Clearly define the problem– Who is this a problem for?– The problem(s) should be unserved by...
Startup Heroes2. Solution• How do you solve the problem ?• Tie solution to specific pain point• Create continuity in the s...
Startup Heroes3. The Product• 1 or 2 product slides• Screen shots or pre-recorded video• Show product meets the specificat...
Startup Heroes4. Leadership Team• CEO – Include company name & job title• CFO• CTO• Relevant experienceFromangelsforum.com
Startup Heroes5. Advisory board• Who is on the advisory board–What do you rely on them for ?–(i.e. advisor for CEO coachin...
Startup Heroes6. Market• How “big” is market – investors want to see in $– Convince me this is a big opportunity for my in...
Startup Heroes6a. TAM > SAM > SOMTAMTAMTotal Available Market– Ex: Total LED MarketSOM: ServiceableSOM: ServiceableObtaina...
Startup Heroes7. Competition• Direct and indirect• Highlight how your solution fills gaps• Recommend use a graphic on this...
Startup Heroes8. Business ModelHow do you make money?Fromangelsforum.com
Startup Heroes9. Go-To Market StrategyHow will you launch this?• How will you launch this?– Target customer now, - 12 mont...
Startup Heroes10. Financial Projections• Five year pro-forma• Revenue• COGS• Gross Margin• Key Opex (3-4 line items)• EBIT...
Startup Heroes11. Capital Raise• How much $ so far?– What form, if priced round what was post-$• How much $ Raising?– Conv...
Startup Heroes12. Future raises• Sample chart below – show what $ you will need in thefuture. Highlight CFP point (not on ...
Startup Heroes13. Exit• Who are potential acquirers?• What are comparable transactions?– Seller– Buyer– Valuation– Multipl...
Startup Heroes ©Copyright 2013 Steve Austin, All Rights Reserved 48The Wheel This iswhereyou pivot!
Startup Heroes©Copyright 2013 Steve Austin, All Rights Reserved49Steve Austinsaustin7777@gmail.comCall for Start Up Suppor...
Startup HeroesDifference Between Loan & EquityBanker• Loans $500K• Wants LOW risk• Does NOT want hugereturns• Wants avg in...
Startup Heroes ©Copyright 2013 Steve Austin, All Rights Reserved 51Thank You!Thank You!Steve Austinsaustin7777@gmail.comww...
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How to pitch wow to investors list, 28 may 2013

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How to pitch wow to investors list, 28 may 2013

  1. 1. Startup Heroes ©Copyright 2013 Steve Austin, All Rights Reserved 1How to Pitch the Wow!to InvestorsBy Steve Austinsaustin7777@gmail.comPresented byhttp://www.meetup.com/Silicon-Valley-Startup-Idea-to-IPO/at WorkspringPalo Alto CA28 May 2013
  2. 2. Startup Heroes“Whatever you can door dream you can,begin it.Boldness has genius,power and magic in it!”Johann Wolfgang von Goethe©Copyright 2013 Steve Austin, All Rights Reserved 2
  3. 3. Startup HeroesWE ARE NOT ATTORNEYSGET LEGAL ADVICE!Follow SEC RULES – Stay out of Trouble!©Copyright 2013 Steve Austin, All Rights Reserved 3
  4. 4. Startup HeroesAgenda1st hrPitchWhat aboutAngels?What InvestorsNeed2nd hrMake it SimplePitch to Group©Copyright 2013 Steve Austin, All Rights Reserved 4
  5. 5. Startup Heroes4 Steps1.“Why”I believe…2.“Wow”Factor©Copyright 2013 Steve Austin, All Rights Reserved 53.BusinessModel4.SimpleMessagePersona of Leadership
  6. 6. Startup HeroesAct Like a Leader!People followInspirationalExtra effortCredibilityHumorFairListensResponsibleNot defensiveLearns & adjusts©Copyright 2013 Steve Austin, All Rights Reserved 6Steve JobsRichard BransonHoward SchultzMartin Luther KingAnne Mulcahy, XeroxIndra Noori, Pepsi
  7. 7. Startup HeroesPitch Basics1. Be Confident2. Don’t apologize3. No “superlatives”– Huge market,– Fastest widget, etc4. Use facts & numbers5. Ask©Copyright 2013 Steve Austin, All Rights Reserved 7
  8. 8. Startup HeroesMost Important to Investors –Especially Angels1.YOU & Team2.Your ability to make ithappen©Copyright 2013 Steve Austin, All Rights Reserved 8
  9. 9. Startup HeroesPitching60 Second Pitch• 20 Sec Pitch– 1 Sentence each point• 60 Sec Pitch– 2 – 3 sentences/point– Prioritize• 5 – 6 Minute Pitch– 10-15 Slides MAX– No slides©Copyright 2013 Steve Austin, All Rights Reserved 9
  10. 10. Startup Heroes20 Second Elevator Pitch• Name• Title @ Company Name• “I believe __ (what isreally important to you)• Problem• Big Market (optional)• Our Solution• Benefit is• Ask©Copyright 2013 Steve Austin, All Rights Reserved 10Say “Awesome” or“Facebook”an’ You Walk-the-Plank!
  11. 11. Startup HeroesAngelInvestors©Copyright 2013 Steve Austin, All Rights Reserved 11
  12. 12. Startup HeroesThink Like an AngelEntrepreneur©Copyright 2013 Steve Austin, All Rights Reserved 12
  13. 13. Startup Heroes1. Net Worth $1Million +2. Not including primaryresidence, or3. Income $200,000/yr last 2 yrs4. $300,000 if married5. Expect same $ this yearFrom Securities Act of 1933What is an Accredited Investor?©Copyright 2013 Steve Austin, All Rights Reserved 13
  14. 14. Startup HeroesWhat’s the 1 Thing AngelsWant Most?©Copyright 2013 Steve Austin, All Rights Reserved 14They don’twant to loosetheir money.Photo used without permission.http://www.zerohedge.com/article/value-losing-money
  15. 15. Startup HeroesAngel Investors1. Invest their own money2. Not someone elses $ (like VC)3. Write you a personal check $4. Don’t want to loose $!©Copyright 2013 Steve Austin, All Rights Reserved 15
  16. 16. Startup HeroesWhat is Usual Start-up’s ROI?Its terrible!About 90/100 failAlmost anything else is better!©Copyright 2013 Steve Austin, All Rights Reserved 16
  17. 17. Startup HeroesHow Much $ Invest of Total Wealth?Prudent: Max 5% wealthWealth Invest $/Y$5M $250K $50-100K$10 M $500K $50-100K+$25 M $1.25M $100-500KWealth Invest $/Y©Copyright 2013 Steve Austin, All Rights Reserved 17
  18. 18. Startup HeroesInvestmentStages©Copyright 2013 Steve Austin, All Rights Reserved 18
  19. 19. Startup Heroeswww.privco.com/knowledge-bank/private-equity-and-venture-capitalInvestment Stages©Copyright 2013 Steve Austin, All Rights Reserved 19
  20. 20. Startup Heroeswww.privco.com/knowledge-bank/private-equity-and-venture-capitalInvestment Stages©Copyright 2013 Steve Austin, All Rights Reserved 20
  21. 21. Startup HeroesValuationCEOs JobIncrease Value$SeedSeedPre-Money Value+ $ Investment= Post $ExampleExample$1.2M+ 400K Invest$1.6 MExampleExample$1.2M = 75%+ 400K = 25%$1.6 M =100%Series ASeries APre-Money Value+ $ Investment= Post $Series B (Mid)Series B (Mid)Pre-Money Value+ $ Investment= Post $©Copyright 2013 Steve Austin, All Rights Reserved 21Seed$1.00 /ShareSeries A$2.50 /ShareSeries B$4.75 /Share
  22. 22. Startup HeroesWhat if Value Goes Down?CEOs JobIncrease ValueSeries ASeries A$10 M = 55%+ 8 M = 45%$18 M =100%Series BSeries B$12 M Pre $+ 4 M Invest $$16 M Post $©Copyright 2013 Steve Austin, All Rights Reserved 22Series ASeries A$2.50 /ShareSeries B$1.60 /Share1. Share price goes down2. Investor’s “Anti-dilution clause” protection3. Make “whole” from Founder’s Share4. CEO / Founder can be washed out
  23. 23. Startup HeroesEffect ofAnti-Dilutionon Founders©Copyright 2013 Steve Austin, All Rights Reserved 23
  24. 24. Startup HeroesWhat Do AngelsLook For?©Copyright 2013 Steve Austin, All Rights Reserved 24
  25. 25. Startup HeroesMike Levinson, DreamIt VenturesAn angel investor… looks athttp://www.inc.com/guides/2010/10/how-to-pitch-to-angel-investors.html11. Simple to understand2. Problem / need?3. Big enough market & customerbase?4. Right people©Copyright 2013 Steve Austin, All Rights Reserved 25
  26. 26. Startup Heroeshttp://www.youtube.com/watch?v=mBS0OWGUidcJerry McGuire – Movie“Show Me the Money!”2©Copyright 2013 Steve Austin, All Rights Reserved 26
  27. 27. Startup HeroesAngels Need to Know the $ Story2©Copyright 2013 Steve Austin, All Rights Reserved 271.How much $do youneed?2.What will youdo with it?Use of funds -milestone3.When will Iget mymoney back?4.What Co.will buyyours?Exit
  28. 28. Startup HeroesINVESTORCONCERNS©Copyright 2013 Steve Austin, All Rights Reserved 28
  29. 29. Startup HeroesWhat Entrereneur Sees©Copyright 2013 Steve Austin, All Rights Reserved 29Photos used withut permission with URLS on eachOurSolutionfor Problem
  30. 30. Startup HeroesWhat Investor Sees: Alternatives©Copyright 2013 Steve Austin, All Rights Reserved 30OurSolutionfor ProblemOurSolutionTo ProblemAlternativeAlternativeAlternativealtAlternativealtaltaltaltaltaltAlternativealtaltaltAlternative
  31. 31. Startup HeroesWhy So Much Return?5 investments2 Fail1 Walking dead1 Maybe1 Great return!20 XNeeds 5-20 Xto coverHigh RISK ofFailures©Copyright 2013 Steve Austin, All Rights Reserved 31
  32. 32. Startup HeroesSlide Deck TemplateFromangelsforum.com©Copyright 2013 Steve Austin, All Rights Reserved 32
  33. 33. Startup HeroesCompany Name“One Line Mission Statement”Before you start presentation,introduce yourself andthe general conceptFromangelsforum.com
  34. 34. Startup Heroes1. The Problem• Clearly define the problem– Who is this a problem for?– The problem(s) should be unserved bycompetitionFromangelsforum.com
  35. 35. Startup Heroes2. Solution• How do you solve the problem ?• Tie solution to specific pain point• Create continuity in the storyProduct = 15% of timeFromangelsforum.com
  36. 36. Startup Heroes3. The Product• 1 or 2 product slides• Screen shots or pre-recorded video• Show product meets the specifications• Add detailed product features in appendixFromangelsforum.com
  37. 37. Startup Heroes4. Leadership Team• CEO – Include company name & job title• CFO• CTO• Relevant experienceFromangelsforum.com
  38. 38. Startup Heroes5. Advisory board• Who is on the advisory board–What do you rely on them for ?–(i.e. advisor for CEO coaching)• CFO• Relevant experience
  39. 39. Startup Heroes6. Market• How “big” is market – investors want to see in $– Convince me this is a big opportunity for my investment.– What market dynamics• What are key market segments (if appropriate)?• What is TAM and SAM? For SAM make bottoms upanalysis• Have detail on TAM & SAM analysis - appendix
  40. 40. Startup Heroes6a. TAM > SAM > SOMTAMTAMTotal Available Market– Ex: Total LED MarketSOM: ServiceableSOM: ServiceableObtainable Market– Realistic market shareSAMSAMServed/Serviceable AvailableMarket– Ex: Living colors LED segmentTAMSAMSOM
  41. 41. Startup Heroes7. Competition• Direct and indirect• Highlight how your solution fills gaps• Recommend use a graphic on this slide– Put competition on X axis title and key features on Y axis– Highlight how your solution provides the right key features– Alt: 2 prime points on X & Y; develop scatter plot of competitivelandscape• Have back-up slide – competition details
  42. 42. Startup Heroes8. Business ModelHow do you make money?Fromangelsforum.com
  43. 43. Startup Heroes9. Go-To Market StrategyHow will you launch this?• How will you launch this?– Target customer now, - 12 months, 36 months?– Direct vs. Indirect sales– Leverage existing channels• Having an advisor a plus• How acquire customers in cost-effectivemanner?• “SEO” is not a strategyFromangelsforum.com
  44. 44. Startup Heroes10. Financial Projections• Five year pro-forma• Revenue• COGS• Gross Margin• Key Opex (3-4 line items)• EBITDA• Cash• In Appendix - detailed five year if neededFromangelsforum.com
  45. 45. Startup Heroes11. Capital Raise• How much $ so far?– What form, if priced round what was post-$• How much $ Raising?– Convertible note or equity?– Valuation– How much soft-circled?– Specific milestones (i.e. use of funds)– Milestones should be tied to value creation for company.Fromangelsforum.com
  46. 46. Startup Heroes12. Future raises• Sample chart below – show what $ you will need in thefuture. Highlight CFP point (not on graph).• Be ready to talk to exit points and drivers for exitFromangelsforum.com
  47. 47. Startup Heroes13. Exit• Who are potential acquirers?• What are comparable transactions?– Seller– Buyer– Valuation– Multiples, (revenue and EBITDA)– Key driver• Most likely exit?Fromangelsforum.com
  48. 48. Startup Heroes ©Copyright 2013 Steve Austin, All Rights Reserved 48The Wheel This iswhereyou pivot!
  49. 49. Startup Heroes©Copyright 2013 Steve Austin, All Rights Reserved49Steve Austinsaustin7777@gmail.comCall for Start Up Support!Thank You!Thank You!
  50. 50. Startup HeroesDifference Between Loan & EquityBanker• Loans $500K• Wants LOW risk• Does NOT want hugereturns• Wants avg interest~ 10%• Pay back from SALESMarginDEMANDS PRINCIPAL BACKInvestorInvestor• Invests $500K• Accepts risk• Wants BIG returns• Will risk $ - more fear =• 5 – 40 X ReturnEXPECT BIG FAT RETURNFOR EARLY $ IN©Copyright 2013 Steve Austin, All Rights Reserved 50
  51. 51. Startup Heroes ©Copyright 2013 Steve Austin, All Rights Reserved 51Thank You!Thank You!Steve Austinsaustin7777@gmail.comwww.linkedin.com/pub/steve-austin/1/ba2/35b/email for Start Up Support!Follow our meetups athttp://www.meetup.com/Startup-Heroes-Silicon-Valley/

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