IMSafer Angel Round


Published on

This is the slide eck that we used when we raised $1.2 million from investors for the angel round of IMSafer, back in 2006. The original company name was Collabarent.

  • Be the first to comment

IMSafer Angel Round

  1. 1. Collaborating Parents. Safer Internet. Confidential Brandon Watson, CEO
  2. 2. The Team <ul><li>Founder </li></ul><ul><ul><li>Brandon Watson – CEO </li></ul></ul><ul><ul><ul><li>RLX, Soros Private Equity, AskMe, Microsoft </li></ul></ul></ul><ul><ul><ul><li>Expertise in product design, sales and marketing, executive management </li></ul></ul></ul><ul><li>Board </li></ul><ul><ul><li>[removed] – CEO/Founder, [removed] Networks </li></ul></ul><ul><ul><li>Brandon Watson </li></ul></ul><ul><ul><li>Series A representative </li></ul></ul><ul><li>Advisors </li></ul><ul><ul><li>[removed] – US Postal Inspector, Crimes Against Children </li></ul></ul><ul><ul><li>[removed] – PhD Candidate, MIT, Bioinformatics, ex-Microsoft Development Manager </li></ul></ul>Confidential
  3. 3. Alarming Statistics <ul><li>1 in 5 youth ages 10 to 17 receive sexual solicitation or approach annually </li></ul><ul><li>52% of teenagers use IM daily, 72% weekly </li></ul><ul><li>The FBI estimates that as many as 500K – 750K sexual predators are online on a daily basis, and there are over 18 million teenagers on line at any one time </li></ul>Confidential <ul><li>Sources </li></ul><ul><li>Online Victimization, NCMEC, June 2000 </li></ul><ul><li>Polly Klaas Foundation, December 21, 2005 </li></ul><ul><li>FBI, 2006 </li></ul>
  4. 4. The Problem <ul><li>Parental control software primarily focuses on web browsing and web content </li></ul><ul><li>The Internet has removed barriers of access to children </li></ul><ul><li>Predators cultivate relationships with children over time </li></ul><ul><li>Only need screen name to initiate conversation </li></ul><ul><li>89% of sexual solicitations of youths are on IM or chat </li></ul><ul><li>Social networking sites growth exacerbates these issues </li></ul><ul><li>There is little recourse for parents when they do discover an inappropriate on-line connection </li></ul><ul><li>No product exists to monitor multitude of IM networks </li></ul>Confidential
  5. 5. Dateline NBC - Net Predators Confidential jteno72960:want me to rub your feet katiedidsings:ya jteno72960:mmmmmmmmm now i’m getting turned on. m4pixeleen: do you talk about sex and things like that? m4pixeleen: you can tell me anything, it’s ok. greendaychickk: I have m4pixeleen: it is fun m4pixeleen:  you seem like a very sweet girl fleet_captain_jaime_wolfe: But, you are 13... sadlilgrrl: but if my own parents dont even love me, i dont really think anyone else will. fleet_captain_jaime_wolfe: Well, let me ask you this, if I were to offer you something, would you take it? fleet_captain_jaime_wolfe: I am looking for a younger submissive female to train...
  6. 6. Our Proposed Solution <ul><li>Focus on protecting against bad people, not bad content </li></ul><ul><li>Make IM and chat ineffective as a tool for the potential child predator </li></ul><ul><ul><li>Create online reputations for screen names </li></ul></ul><ul><ul><li>Give parents a conduit to let other parents know about potentially harmful IM users </li></ul></ul><ul><li>Monitor all Instant Messenger networks </li></ul><ul><li>Based open source technologies and standards </li></ul>Confidential
  7. 7. Current Market Failings <ul><li>Protecting children online has centered around pornography and hate sites </li></ul><ul><li>Ineffective monitoring solutions for online relationships </li></ul><ul><li>Logging software requires parental audits </li></ul><ul><ul><li>Time consuming and ultimately ineffective </li></ul></ul><ul><ul><li>Prone to missing potential problems </li></ul></ul><ul><li>Solutions not user friendly, often requiring child to install </li></ul><ul><li>Fencing in children causes them to seek ways around software </li></ul>Confidential
  8. 8. Competitive Analysis Confidential Web Filtering Web Logging Web Blocking IM Filtering IM Logging IM Reputation IM Content Alerts Cyber Patrol        Net Nanny        Spector Pro        eBlaster        Chat Watch        Norton        McAfee        Zone Alarm        Safe Eyes        IM Safer       
  9. 9. Target Market Confidential <ul><li>Source </li></ul><ul><li>US Census, October 2004 data </li></ul>
  10. 10. Market Penetration Confidential Two independent studies show penetration is very low Source: Primary Company research
  11. 11. Market Research Confidential <ul><li>Source </li></ul><ul><li>Primary company research, 162 responses </li></ul>
  12. 12. Market Research Confidential <ul><li>Source </li></ul><ul><li>Primary company research, 64 responses </li></ul>
  13. 13. What’s It Worth To Parents? Confidential <ul><li>Source </li></ul><ul><li>Primary company research, 452 responses </li></ul>
  14. 14. Market Analysis <ul><li>~40M US HHs @ $30/year = $1.2B market size </li></ul><ul><li>Thoroughly saturated market for web filtering software </li></ul><ul><li>Parental control software market very under-penetrated </li></ul><ul><li>Existing solutions viewed as ineffective or hard to use </li></ul><ul><li>Parents screaming for tech solutions </li></ul><ul><ul><li>Willing to pay for solutions that work </li></ul></ul><ul><li>Market leaders focused on web browsing, not IM and chat, which is the real source of pain for parents </li></ul>Confidential
  15. 15. IM Safer Solution Discussion Confidential
  16. 16. IM Safer – Application <ul><li>Product to focus specifically on IM & chat protection </li></ul><ul><li>Real time packet analysis of all IM & chat conversations </li></ul><ul><li>Rules engine looking for patterns in text entries </li></ul><ul><ul><li>Will work in conjunction with law enforcement and watchdog groups to create syntax rules </li></ul></ul><ul><li>Rules database constantly updated with new grooming techniques and slang </li></ul><ul><li>Simple web based installation, reporting and administration for customers </li></ul><ul><li>Send alerts to customers via email or SMS </li></ul><ul><ul><li>Immediacy based on priority of alert </li></ul></ul>Confidential
  17. 17. IM Safer – Network Effects <ul><li>Alerts are a shared resource and pooled from customers </li></ul><ul><li>Incentives for parents to tell friends – the more people in the network, the more useful it is for them </li></ul><ul><li>Customer voting determines threat level of screen names </li></ul><ul><li>Proactively alert when high level threats make contact </li></ul><ul><li>Cannot search for status/alerts of a screen name </li></ul><ul><ul><li>Access to information only available for remote screen names that have made contact with a monitored account </li></ul></ul>Confidential
  18. 18. IM Safer Technology Discussion Confidential
  19. 19. IM Safer – Client Architecture Confidential
  20. 20. IM Safer – Server Architecture Confidential
  21. 21. IM Safer – Application Confidential
  22. 22. IM Safer – Application Confidential
  23. 23. Collabarent Marketing & Business Confidential
  24. 24. Marketing Plan <ul><li>Primary goal – identify and optimize method of customer acquisition </li></ul><ul><li>User acquisition </li></ul><ul><ul><li>Google AdWords – ramp to $50K / month budget </li></ul></ul><ul><ul><li>Referral campaign – sign up friends and family, get free service </li></ul></ul><ul><ul><li>Spot Runner (?) as a potential source for cheap cable air time </li></ul></ul><ul><li>Media blitz </li></ul><ul><ul><li>Capitalize on current media buzz around on-line predators </li></ul></ul><ul><ul><li>Identify PR firm to get placement in national and local television, papers and magazines </li></ul></ul><ul><ul><li>Oprah – focus on problem she cares about, solved by African-American entrepreneur </li></ul></ul><ul><li>School campaign </li></ul><ul><ul><li>Give the software to every school that will take it </li></ul></ul><ul><ul><li>The bigger our network and database of alerts, the more valuable to parents to also be in the network </li></ul></ul>Confidential
  25. 25. Marketing Plan <ul><li>OEMs </li></ul><ul><ul><li>Client side software delivered with new computers </li></ul></ul><ul><ul><li>Rev share on user signups </li></ul></ul><ul><ul><li>Possibility of creating skinned sites for OEMs to appear that they are providing the IM Safer service to their customers </li></ul></ul><ul><ul><li>All alerts are in shared DB for all customers </li></ul></ul><ul><li>Religious Groups </li></ul><ul><ul><li>Market to the groups as this is a big topic right now and the religious leaders carry sway with their constituencies </li></ul></ul><ul><li>Community Building </li></ul><ul><ul><li>Online safety forums </li></ul></ul><ul><ul><li>FAQs and best practices </li></ul></ul>Confidential
  26. 26. Business Model (monthly subs) Confidential
  27. 27. Business Model (yearly sub) Confidential
  28. 28. Business Model (yearly, upside) Confidential
  29. 29. Challenges <ul><li>Technical </li></ul><ul><ul><li>Building and maintaining the syntax for the alert rules </li></ul></ul><ul><ul><li>Meeting code development milestones </li></ul></ul><ul><ul><li>Designing a scalable database </li></ul></ul><ul><ul><li>Designing simple user interface </li></ul></ul><ul><li>Business </li></ul><ul><ul><li>Hiring the right people quickly </li></ul></ul><ul><ul><li>Time to market </li></ul></ul><ul><ul><li>High profile media engagements </li></ul></ul><ul><ul><li>Generating word of mouth advertising </li></ul></ul><ul><ul><li>Initial user sign ups </li></ul></ul><ul><ul><li>Low cost customer acquisition campaign </li></ul></ul><ul><ul><li>Privacy concerns </li></ul></ul>Confidential
  30. 30. Timeline <ul><li>Formation (May – June) </li></ul><ul><ul><li>Capital raising </li></ul></ul><ul><ul><li>Hiring – 4 additional dev heads (already have 1 position filled) </li></ul></ul><ul><li>Software development (June – September) </li></ul><ul><ul><li>Spec completion for web application and client code </li></ul></ul><ul><ul><li>Designing scalable database </li></ul></ul><ul><ul><li>Code development to release to beta </li></ul></ul><ul><ul><li>Build alert rules hierarchy </li></ul></ul><ul><li>Beta testing (September – October) </li></ul><ul><ul><li>Initial user sign ups – have over 250 emails of interested parents </li></ul></ul><ul><ul><li>Fine tuning application design and architecture </li></ul></ul><ul><ul><li>Bug fixing </li></ul></ul><ul><ul><li>Data center deployment </li></ul></ul><ul><ul><li>Begin media push </li></ul></ul><ul><li>Product launch (November) </li></ul><ul><ul><li>Market awareness </li></ul></ul><ul><ul><li>V2 planning </li></ul></ul>Confidential
  31. 31. Competitive Advantages <ul><li>Small and focused team, passionate about the problem </li></ul><ul><li>Will seek relevant patents </li></ul><ul><ul><li>Using network voting system to track online reputations in instant messenger context </li></ul></ul><ul><ul><li>Real time syntax analysis of IM and chat conversations with associated alerting </li></ul></ul><ul><li>Alert rules and alert database become defensible competitive advantage </li></ul><ul><ul><li>Huge barrier to entry for new entrants </li></ul></ul><ul><ul><li>Barrier to entry to online players because database spans IM networks </li></ul></ul><ul><li>IM is not going away as a communication medium, and in fact problem will just get bigger </li></ul><ul><li>There is no way to game our reputation system </li></ul><ul><ul><li>We control and can verify an information transaction took place </li></ul></ul>Confidential
  32. 32. Why Invest? <ul><li>Management team with startup experience </li></ul><ul><li>Team passionate about protecting children on-line </li></ul><ul><li>Topical problem space with little product innovation or thought leadership </li></ul><ul><li>Problem thoroughly examined; solution well thought out </li></ul><ul><li>Strong revenue potential with low operating expense overhead, resulting in strong economies of scale </li></ul><ul><li>Solution can be extended to email and web as well </li></ul><ul><li>Be a part of a positive social cause </li></ul><ul><li>Stop bad people from using the Internet for evil </li></ul>Confidential
  33. 33. Investment Risks <ul><li>The technology is not difficult, we just have a very different way of solving the problem </li></ul><ul><li>Creating a reasonable and effective rules database could prove challenging </li></ul><ul><li>User acquisition costs are currently difficult to predict </li></ul><ul><li>Any of the on-line majors or parental control software providers could decide this is functionality they want to build </li></ul><ul><li>Customer apathy </li></ul>Confidential
  34. 34. Future Directions <ul><li>Web access </li></ul><ul><ul><li>Using the same paradigm of parents casting votes for sites </li></ul></ul><ul><ul><li>Based on particular customer’s preference, filter by grouped score of site </li></ul></ul><ul><li>Email monitoring </li></ul><ul><ul><li>Same concept as the IM product </li></ul></ul><ul><ul><li>Know who the children are speaking to and about what </li></ul></ul>Confidential
  35. 35. Exit Strategy <ul><li>Cash flow </li></ul><ul><ul><li>Based on projections, CFLO positive occurs at 4000 yearly customer subscription collections per month </li></ul></ul><ul><li>Acquisition </li></ul><ul><ul><li>Major online players – short term </li></ul></ul><ul><ul><ul><li>MSN, Yahoo!, AOL, Google </li></ul></ul></ul><ul><ul><li>Anti-virus / security software companies – med term </li></ul></ul><ul><ul><ul><li>Symantec, McAfee </li></ul></ul></ul><ul><li>Grow and take public – long term </li></ul><ul><ul><li>Partner with major online players to grow user base </li></ul></ul>Confidential