Finding the right investors to fund your enterprise is not easy. Convincing them to come up with the money is even more difficult. It is an Art.

1. The Art of
Tackling Investors
by Robert Barzelay

2. STEP
1
PREPARE
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2
Robert
Barzelay

3. Investor
Presenta0on
• Prepare
your
investor
presenta?on.
• Use
Post-­‐It
notes
for
your
planning.
• Do
NOT
use
PowerPoint
or
Keynote
(yet).
• Outline
your
thoughts
and
plans,
and
s?ck
them
on
the
wall.
• Produce
a
1-­‐2
page
execu?ve
summary
and
a
200-­‐250
words
teaser.
• Create
presenta?ons
of
different
lengths:
of
1,
5,
10,
15,
30
and
45
minutes.
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3
Robert
Barzelay

4. © www.GlobalStrategists.com 4

5. The
Team
KNOW
YOURSELVES
• Your
Skills
Knowledge
&
Exper?se
• Your
Story
Background
&
Experience
• Have
any
(or
all)
of
you
ever
done
this
before?
Individually?
Together?
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5
Robert
Barzelay

6. Market
&
Compe00ve
Intelligence
KNOW
YOUR
MARKETS
• Targets
WHO
and
WHERE
are
your
customers?
• Pain
What
do
your
customers
NEED?
• Desire
What
do
your
customers
WANT?
• Money
Are
customers
willing
or
able
to
PAY?
• Compe00on
WHO
and
WHERE
are
they?
©
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6
Robert
Barzelay

7. Your
Product
KNOW
YOUR
PRODUCT
• Features
Nice,
but
least
important
• Advantages
Versus
compe??on
+
current
prac?ce
• Benefits
You
sell
benefits,
not
features
• Price
Can
you
make
a
healthy
profit?
• Uniqueness
Must-­‐Have
or
Nice-­‐To-­‐Have?
©
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7
Robert
Barzelay

8. Your
Evidence
• Needs
Research
• Proof
of
Market
• Proof
of
Concept
• Market
Issues
(regulatory,
economies,
poli?cs,
etc.)
• User
Feedback
&
Results
• SWOT
Analysis:
– Your
Company
– Your
Compe??on
– The
Market
Environment
• Product
Valida?on
©
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8
Robert
Barzelay

9. Your
Plans
• Your
Objec0ves
What
do
you
want
to
achieve?
• Your
Financials
How
much
will
it
cost
to
make
&
sell
your
product?
How
much
money
will
you
make?
• Your
Strategies
How
will
you
achieve
the
above?
©
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9
Robert
Barzelay

10. The Way you Present
is as important as
What you Present
© www.GlobalStrategists.com 10

11. STEP
2
LOOK
FOR
YOUR
IDEAL
INVESTORS
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11
Robert
Barzelay

12. Matchmaking
• Do
lots
of
research
and
soul
searching.
• Your
strategies
and
financial
needs
need
to
match
the
strategies
and
expecta?ons
of
your
financiers.
• Evaluate
investors
the
same
way
you
would
evaluate
poten?al
clients.
• Do
not
just
accept
any
investor
–
even
not
if
you
are
financially
in
dire
straits.
©
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12
Robert
Barzelay

13. ©
www.GlobalStrategists.com
Robert
Barzelay
13
Most investors will
not sign an NDA.
Live with it !!

14. Mentors,
referrers
and
advisors
• Use
them
to
open
doors
and
to
get
introduced
to
poten?al
investors.
• Some,
but
not
all,
ask
for
a
retainer,
a
consul?ng
fee
and/or
shares.
• Others
like
to
get
involved
in
your
business
venture,
even
make
a
(modest)
investment
themselves.
• Make
sure
that
they
do
more
than
just
pass
on
a
name
or
business
card.
©
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14
Robert
Barzelay

15. Machers,
Schmoozers,
Crooks,
and
Dubious
Middlemen
Watch
out
for
the
greedy
and
malicious
!!
©
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15
Robert
Barzelay

16. STEP
3
BE
READY
BE
PREPARED
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16
Robert
Barzelay

17. ©
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Robert
Barzelay
17

18. Your
Introduc0on
• What
do
you
do?
• What
problem(s)
do
you
solve?
• What
is
unique
about
your
product?
• How
big
is
the
market
opportunity?
– bo#om-­‐up,
NOT
top-­‐down
• How
big
can
your
company
get?
©
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18
Robert
Barzelay

19. Your
Target
Markets
• What
and
where
are
your
target
markets?
• How
did
you
calculate
your
sales
poten?als?
• From
where
did
you
get
details
about
this
market’s
industry
growth
rate?
• How
did
you
determine
that
your
product
has
a
high
growth
poten?al?
©
www.GlobalStrategists.com
19
Robert
Barzelay

20. The
Team
Passion
–
Dedica0on
-­‐
Commitment
• Who
are
the
founders
and
key
team
members?
• What
relevant
experience
does
the
team
have?
• What
key
addi?ons
to
the
team
are
needed,
and
when?
• Why
is
the
team
uniquely
capable
to
execute
the
company’s
business
plan?
• How
many
employees
do
you
have?
• What
mo?vates
the
founders?
©
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20
Robert
Barzelay

21. Product
• Why
would
users
care?
• What
are
the
major
product
milestones
&
KPIs?
• What
are
its
key
benefits
&
USPs?
• What
have
you
learned
from
early
versions?
• Would
you
add
features
to
your
product?
• If
so,
what
will
be
the
addi?onal
benefits?
• Give
a
demonstra?on
of
the
product.
©
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21
Robert
Barzelay

22. Compe00on
• Who
are
your
compe?tors?
• What
gives
you
a
compe??ve
advantage?
• What
advantages
does
your
compe??on
have
over
you?
• What
are
the
barriers
to
entry
for
newcomers?
• How
did
you
find
out
about
your
compe?tors?
©
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22
Robert
Barzelay

23. Marke0ng
• How
do
you
plan
to
market
your
product?
• What
are
your
offline
&
online
MarCom
strategies?
• How
long
does
it
typically
take
between
the
ini?al
customer
contact
and
the
closing
of
a
sale?
• What
is
the
cost
of
a
customer
acquisi?on?
• What
is
the
projected
life?me
value
of
a
customer?
©
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23
Robert
Barzelay

24. Trac0on
• What
trac?on
do
you
have
already?
– Trials
&
Tests
– Demonstra?ons
– Sales
• How
did
you
get
this
early
trac?on?
• How
can
this
early
trac?on
be
accelerated
and
translated
into
(more)
sales?
©
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24
Robert
Barzelay

25. Risks
• What
do
you
see
are
the
main
risks
to
your
business?
• Do
you
have
any
IP
risks?
• Do
you
have
any
regulatory
risks?
• Do
you
foresee
any
financial
risks?
• Are
there
any
product
liability
risks?
• Are
there
any
staffing
risks
(hiring/resigning)?
©
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25
Robert
Barzelay

26. The
Exit
• What
is
the
likely
exit
–
IPO
or
M&A?
• Or
are
you
contempla?ng
a
management
buyout?
• How
will
the
valua?on
of
an
exit
be
determined?
©
www.GlobalStrategists.com
26
Robert
Barzelay

27. Intellectual
Property
• What
key
IP
do
you
have:
patents
(applied/pending/
issued),
trade
secrets,
copyrights,
trademarks?
• What
comfort
do
you
have
that
your
IP
does
not
infringe
the
rights
of
third
par?es?
• How
was
your
IP
developed?
• Would
any
(prior)
team
member
or
employee
have
a
poten?al
claim
to
your
IP?
©
www.GlobalStrategists.com
27
Robert
Barzelay

28. The
Financials
• What
are
your
3-­‐year
projec?ons?
• What
are
the
key
assump?ons?
• How
much
equity
and
debt
has
the
company
raised;
what
is
the
capitaliza?on
structure?
• What
future
equity
or
debt
financing
will
be
necessary?
©
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28
Robert
Barzelay

29. More
Financials
• How
much
of
a
stock
op?on
pool
is
being
set
aside
for
employees?
• When
will
the
company
reach
breakeven?
• How
much
will
you
burn
un?l
becoming
profitable?
• What
are
the
factors
that
limit
faster
growth?
• What
are
the
key
metrics
that
the
management
team
focuses
on?
©
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29
Robert
Barzelay

30. The
Funds
• How
much
money
do
you
need?
• What
do
you
think
is
the
pre-­‐money
valua?on?
• On
what
basis
has
this
been
calculated?
• Will
exis?ng
investors
par?cipate
in
this
round?
• What
is
the
planned
use
of
proceeds?
• How
much
money
would
you
need
in
a
next
round?
©
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30
Robert
Barzelay

31. Valua0on
• The
biggest
baple
in
all
funding
nego?a?ons:
– Those
that
seek
money
overvalue
– Those
that
invest
money
undervalue
• As
entrepreneur
you
have
to:
– Make
investors
clearly
understand
your
business
– Create
trust
so
they
will
entrust
you
with
their
money
– Convince
them
of
the
profit
poten?als
– Take
the
lead
in
your
business
©
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31
Robert
Barzelay

32. Valua0on
Methods
None
are
absolutely
right.
All
are
based
on
guess?mates.
• The
VC
Method:
hpp://bit.ly/TTO7IL
• The
Berkus
Method:
hpp://bit.ly/HfeJLj
• The
Risk
Factor
Summa?on
Method:
hpp://bit.ly/WzxeEU
• The
Scorecard
Method:
hpp://bit.ly/eCYabw
There
is
no
perfect
methodology
for
establishing
the
pre-­‐money
valua?on
of
pre-­‐revenue
seed/startup
ventures.
©
www.GlobalStrategists.com
32
Robert
Barzelay

33. Challenging
Ques0ons
• Who
believes
in
you?
Can
I
get
in
touch
with
them?
• Which
entrepreneurs
do
you
admire?
Why?
• How
do
you
know
how
much
money
you
need?
• Could
you
build
your
business
with
less?
• Tell
us
about
a
typical
customer
that
uses,
or
poten?ally
will
use
your
product.
©
www.GlobalStrategists.com
33
Robert
Barzelay

34. More
Challenging
Ques0ons
• How
do
you
track
trends
in
your
market?
• What
will
your
market
look
like
in
5
years
from
now
as
a
result
of
using
your
product?
• Have
you
ever
been
fired
from
a
job?
Why?
• What
mistakes
have
you
made
in
your
career?
• What
have
you
learned
in
your
life?
©
www.GlobalStrategists.com
34
Robert
Barzelay

35. Interes0ng
Read
hpp://bit.ly/12PlIpF
hpp://bit.ly/p7qcn
hpp://b.qr.ae/arn1u4
hpp://zd.net/Weahoa
hpp://bit.ly/dlbnIo
©
www.GlobalStrategists.com
35
Robert
Barzelay

36. Rehearse !
Rehearse !
Rehearse !
Rehearse !
Rehearse !
Rehearse !
©
www.GlobalStrategists.com
Robert
Barzelay
36

37. barzelay@GlobalStrategists.com
http://www.GlobalStrategists.com