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Morning Sessions


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Morning Sessions

  1. 1. Welcome
  2. 2. James Wicksted , Ph.D. Department Head and Professor- Physics, Oklahoma State University Associate Director Oklahoma EPSCoR Oklahoma DOE EPSCoR Director
  3. 3. ENTREPRENEURIAL WORKSHOPS Entrepreneurship <ul><li>Purpose </li></ul><ul><li>Co-sponsored with i2E, Inc. </li></ul><ul><li>Geared toward entrepreneurial-minded college students </li></ul><ul><li>Opportunity to learn about the commercialization process </li></ul><ul><li>Topics: ranging from business plans to venture capital financing </li></ul><ul><li>Successful entrepreneurs and business community members (patent attorneys, venture capitalists, etc.) were invited to interact with and share insights with participants </li></ul><ul><li>Served as kick-off event for OK Governor’s Cup Business Plan Competitions </li></ul><ul><li>Participants ~125-150 annually </li></ul><ul><li>undergraduate students </li></ul><ul><li>graduate students </li></ul><ul><li>faculty </li></ul>
  5. 8. The business concept is developed The economic feasibility of the business is determined The business functions are established and a trial product is marketed A product is introduced and revenues are generated The business reaches break even and even profitability The business is well established in the target market Business Lifecycle Valley of Death Investigation Feasibility Development Introduction Growth Maturity
  6. 9. Definitions Investigation Feasibility Development Tangible object, tech or service offered for sale. Commercial activity where goods and services are sold. Commercial enterprise that produces a product/service to be sold to a market. Is the product unique? What problem does the product solve? Will the product make a profit? Does it solve a problem? Who will buy it? Will it make sufficient returns to justify investment? What will it cost to produce? What is the size of the market? Who is the management team? i2E Commercialization Model New product Positive Market Limited capital Limited expertise Incomplete team No product revenue Design prototype Initial BP developed Complete prototype Expenses incurred No product revenue Valley of Death Analysis of the business based on: Product, market, business, finance and execution MARKET BUSINESS PRODUCT Risk Profile
  7. 10. Risk Action Items Product Risk: Product may not be feasible or lacks unique qualities and cannot be protected. <ul><li>Define concept </li></ul><ul><li>Confirm critical assumptions </li></ul><ul><li>Survey state of the art </li></ul><ul><li>Identify critical barriers </li></ul><ul><li>Determine technology </li></ul>Market Risk: Limited understanding or knowledge of the market can cause a misrepresentation of the growth and size of the market. <ul><li>Conduct market overview & identify: </li></ul><ul><li>Pricing structure </li></ul><ul><li>Market barriers </li></ul><ul><li>Risks </li></ul><ul><li>Distribution channels </li></ul><ul><li>Trends and competitors </li></ul>Business Risk: Great product or technology, but a new product or technology does not translate into a great business. <ul><li>Estimate profit potential </li></ul><ul><li>Conduct self-enterprise and commercialization assessments </li></ul><ul><li>Identify professional needs </li></ul><ul><li>Identify capital needs </li></ul>Finance Risk: Proof-of-concept funding for product prototype is difficult to identify. <ul><li>Self fund </li></ul><ul><li>Study the capital cycle </li></ul><ul><li>Identify ten proof-of-concept sources </li></ul><ul><li>Identify ten seed sources </li></ul>Execution: Management at this stage is typically the innovator. This lack of business skills can be difficult to overcome. <ul><li>Learn to manage people </li></ul><ul><li>Identify ten advisors </li></ul><ul><li>Study management practice </li></ul><ul><li>Study company formation types </li></ul>INTRODUCTION GROWTH FEASIBILITY MATURITY DEVELOPMENT INVESTIGATION
  8. 11. Risk Action Items Product Risk: The company is focused on product innovation rather than business development. Intellectual property rights remain a concern. <ul><li>Develop working model </li></ul><ul><li>Test technical features </li></ul><ul><li>Assess preliminary production feasibility </li></ul><ul><li>Conduct manufacturing assessment </li></ul><ul><li>Assess safety & environmental features </li></ul><ul><li>Finalize designs </li></ul>Market Risk: Unrealistic market study results can cause misallocation of scarce recourses. Final product design is dependent on successful outcome of market study. <ul><li>Identify and quantify: </li></ul><ul><li>Market size </li></ul><ul><li>Customers </li></ul><ul><li>Volume </li></ul><ul><li>Prices </li></ul><ul><li>Distribution </li></ul><ul><li>Competitors </li></ul>Business Risk: Exploring business formation and the plan still lacks expertise and business skills to commercialize. <ul><li>Formulate financial assumptions </li></ul><ul><li>Develop pro forma </li></ul><ul><li>Identify seed capital </li></ul><ul><li>Form advisory team </li></ul>Finance Risk: Cash flow is a problem due to lack of revenues and early proof-of-concept funding is difficult to attract. <ul><li>Bootstrap </li></ul><ul><li>Prepare investment strategy </li></ul><ul><li>Prepare investment presentation </li></ul>Execution: The management team is incomplete; therefore, multiple responsibilities fall on a few individuals. Chicken and egg syndrome becomes evident as you need capital but capital won’t follow poor management teams. <ul><li>Multi-task </li></ul><ul><li>Implement appropriate management structure </li></ul><ul><li>Pursue opportunities </li></ul>INTRODUCTION GROWTH FEASIBILITY MATURITY DEVELOPMENT INVESTIGATION
  9. 12. Risk Action Items Product Risk: Advancing the product from prototype to manufacturing or production environment requires new skill sets. No longer developing product revenue features. <ul><li>Develop prototype </li></ul><ul><li>Identify materials and processes </li></ul><ul><li>Conduct tests </li></ul><ul><li>Implement development methods </li></ul>Market Risk: Field tests are not positive and / or competitors respond more rapidly than planned. <ul><li>Identify marketing team </li></ul><ul><li>Define target market </li></ul><ul><li>Select market channels </li></ul><ul><li>Field test </li></ul>Business Risk: If choosing a business over licensing, an experienced professional management team will need to be identified. The business needs to enter a revenue mode as opposed to the R&D mode of the past. <ul><li>Decide venture or license </li></ul><ul><li>Finalize intellectual property </li></ul><ul><li>Identify management team </li></ul><ul><li>Select organization structure </li></ul><ul><li>Write business plan </li></ul>Finance Risk: Significant expenses and no product revenue realized. <ul><li>Prepare investment strategy </li></ul><ul><li>Select investment types </li></ul><ul><li>Target appropriate investors </li></ul>Execution: Lack of focus and risk of losing founder(s). Lack of flexibility in accepting new business controls. <ul><li>Develop organization processes </li></ul><ul><li>Delegate responsibilities </li></ul><ul><li>Develop strategic plans </li></ul><ul><li>Track progress </li></ul>INTRODUCTION GROWTH FEASIBILITY MATURITY DEVELOPMENT INVESTIGATION
  10. 13. <ul><li>Validate the Unit Value in the market </li></ul><ul><li>Approach stages in a sequential manner </li></ul><ul><li>Integrate: </li></ul><ul><li>Product, Market and Business </li></ul><ul><li>Focus on performance milestones </li></ul><ul><li>Achieve market validation ASAP </li></ul><ul><li>Develop a profitable business model </li></ul>Guiding Principles
  11. 14. <ul><li>Utilize “top down” approach to revenues </li></ul><ul><li>Underestimate “sales cycle” </li></ul><ul><li>Insufficient “lead time” for capital acquisition </li></ul><ul><li>No “contingency capital” </li></ul><ul><li>Underestimate competitive “response” </li></ul><ul><li>Inadequate “administrative staffing” </li></ul>Classic Mistakes
  12. 15. <ul><li>Identify Customer Problem </li></ul><ul><li>Develop Innovative Solution </li></ul><ul><li>Evaluate Customer Value Proposition </li></ul><ul><li>Research Markets, Technology, Competitors </li></ul><ul><li>Write Business Plan using guidelines </li></ul>Business Planning Process
  13. 16. <ul><li>Identify the Customer Problem </li></ul><ul><ul><ul><li>Awareness of the Problem </li></ul></ul></ul><ul><ul><ul><li>Level of Customer Pain </li></ul></ul></ul><ul><li>Uniqueness of Innovative Solution </li></ul><ul><ul><ul><li>Magnitude of Improvement </li></ul></ul></ul><ul><ul><ul><li>Customer Barriers to Acceptability </li></ul></ul></ul><ul><ul><ul><li>Deliverability </li></ul></ul></ul>Business Planning: The Beginning
  14. 17. “ We don’t know why we make these, so we’re hoping to find people Who don’t know why they buy them.”
  15. 18. Problem: 9% of emergency transported patients NEVER receive an intravenous catheter or IV due to poor blood vein accessibility Solution: Medical device that encompasses the arm or or leg, reduces blood circulation similar to a tourniquet, BUT then redirects the constricted blood to the surface area using pressure Identify Problem & Unique Solution
  16. 19. Company Sales Price $x COGS $x Gross Profit $x (Profitability, ROE) ___________________________________________________________ Customer Unit Value Proposition:Defined Customer Customer Value $x Sales Price $x Customer Benefit $x (Payback, NPV, ROI, Breakeven) <ul><ul><li>Why do YOU want to deliver the product/service? </li></ul></ul><ul><ul><li>Why will a CUSTOMER write you a check for the product/service? </li></ul></ul>
  17. 20. Sales Price $25.00 COGS $ 5.00 Gross Profit $20.00 Gross Margin 80% Customer Value Proposition: Company
  18. 21. Increased Medical $85,000 Probability 3% Customer Value $ 2,550 Sales Price $ 25 Customer Value $ 2,525 Benefit Ratio 101x Unit Value Proposition: Customer
  19. 22. Idea or Business? “ We’re selling $100,000 shares in an idea we plan to have after raising enough capital to think about it.”
  20. 23. <ul><li>Search Internet/Publications/Associations </li></ul><ul><li>TALK with Prospective Customers </li></ul><ul><li>TALK with Potential Competitors </li></ul><ul><li>TALK with Potential Capital Sources </li></ul>Business Plan: Research
  21. 24. <ul><li>Dedicate the plan to the business, not the innovation or product. </li></ul><ul><li>Remember you are illustrating a solution to a problem. </li></ul><ul><li>More importantly, explain how that solution generates revenue and profits for the business. </li></ul>Business Plan: Overview
  22. 25. “ And this is where the revenue comes out.”
  23. 26. <ul><li>Limit to a 2-3 page detachable document </li></ul><ul><li>Key Points to Include: </li></ul><ul><ul><li>Problem and your solution </li></ul></ul><ul><ul><li>Company overview and background </li></ul></ul><ul><ul><li>Products and technology </li></ul></ul><ul><ul><li>Market opportunity </li></ul></ul><ul><ul><li>Competition </li></ul></ul><ul><ul><li>Marketing strategy and execution </li></ul></ul><ul><ul><li>Management team </li></ul></ul><ul><ul><li>Source and use of funds </li></ul></ul><ul><ul><li>Financial projections and exit strategy </li></ul></ul>Executive Summary
  24. 27. <ul><li>Begin with the “Elevator Pitch” </li></ul><ul><li>Business Model </li></ul><ul><li>Corporate direction & vision </li></ul><ul><li>Key Points to Include: </li></ul><ul><ul><li>Founding history </li></ul></ul><ul><ul><li>Significant milestones achieved to date </li></ul></ul><ul><ul><li>Customer value proposition discussion </li></ul></ul>Company Overview and Background
  25. 28. <ul><li>Non-technical product description & functionality (integrate pictures, diagrams, & graphs) </li></ul><ul><li>Focus on unique or competitive advantages </li></ul><ul><li>Emphasize the benefit to the end-user </li></ul><ul><li>Key Points to Include: </li></ul><ul><ul><li>Product/technology developmental status </li></ul></ul><ul><ul><li>Product/technology development path & risks </li></ul></ul><ul><ul><li>Product/technology barriers – IP status </li></ul></ul><ul><ul><li>Customer adoption barriers/challenges </li></ul></ul>Products & Technology
  26. 29. <ul><li>Identify the aggregate market size & growth rates </li></ul><ul><li>Convey in-depth knowledge of market & trends </li></ul><ul><li>Highlight customer interest in Product/Tech. </li></ul><ul><li>Key Points to Include: </li></ul><ul><ul><li>Identify customers & purchase decision process </li></ul></ul><ul><ul><li>Market communication strategies </li></ul></ul><ul><ul><li>Product life cycle/recurring revenues </li></ul></ul><ul><ul><li>Customer benefits </li></ul></ul>Market Opportunity
  27. 30. <ul><li>Identify competitors & potential competitors </li></ul><ul><li>Analyze competitor strengths & weaknesses </li></ul><ul><li>Key Points to Include: </li></ul><ul><ul><li>Competitor product feature & price matrix/chart comparison </li></ul></ul><ul><ul><li>Anticipate competitive responses to product introduction </li></ul></ul>Competition
  28. 31. <ul><li>Sales distribution strategy: direct sales, value add resellers, mfg. reps., etc. </li></ul><ul><li>Product/technology introduction milestones </li></ul><ul><li>Pricing strategies </li></ul><ul><li>Key Points to Include: </li></ul><ul><ul><li>Identify key “early adaptor” customers </li></ul></ul><ul><ul><li>– first revenues plans </li></ul></ul><ul><ul><li>Sales channel ramp up </li></ul></ul><ul><ul><li>“ Bottom-up” development of unit sales & revenues </li></ul></ul>Market Strategy & Execution
  29. 32. <ul><li>Highlight management team relevant industry & work experience and performance to date </li></ul><ul><li>Identify & timeline all KEY future hires </li></ul><ul><li>Current Board of Directors & planned changes </li></ul><ul><li>Key Points to Include: </li></ul><ul><ul><li>Time sensitive “staffing plans” </li></ul></ul><ul><ul><li>Compensation structure & stock option plans </li></ul></ul><ul><ul><li>Critical outsourced consulting/professional services </li></ul></ul>Management
  30. 33. <ul><li>Integrated “set” of Financial Projections for 3 to 5 years </li></ul><ul><li>Use of Funds identified & associated milestones </li></ul><ul><li>Summarize investment transaction details </li></ul><ul><li>Key Points to Include: </li></ul><ul><ul><li>Unit Sales volumes consistent with Marketing section </li></ul></ul><ul><ul><li>Highlight future unit pricing changes (if applicable) </li></ul></ul><ul><ul><li>Revenue & gross margin by Segments </li></ul></ul><ul><ul><li>Summarize key SG&A components </li></ul></ul><ul><ul><li>Examine “burn-rate” versus current capital funding </li></ul></ul><ul><ul><li>Condensed Income, Balance Sheet, and Cash Flow </li></ul></ul><ul><ul><li>Source & Use of Funds: include “subsequent” funding requirements and uses to achieve financial breakeven </li></ul></ul><ul><ul><li>Investment structure and valuation </li></ul></ul><ul><ul><li>Exit Strategies </li></ul></ul>Financial Section
  31. 34. <ul><ul><li>Formatting/Organization </li></ul></ul><ul><ul><li>Key Questions to be Answered </li></ul></ul><ul><ul><li>Terms, Statements & Beliefs to Avoid </li></ul></ul><ul><ul><li>Business Plan Scoring Sheet </li></ul></ul>Business Plan Checklist
  32. 35. Questions?
  33. 36. Networking Break 15 minutes
  34. 37. David Thomison, VP of Enterprise Services READY, SET, PITCH! Presenting your idea to the Investor. INNOVATION TO ENTERPRISE
  35. 38. The Goal <ul><li>Learn How to Convey Your Opportunity to the Investor </li></ul><ul><li>Guide to the Oral Presentation for the Governor’s Cup Competition </li></ul>
  36. 39. Your Tools <ul><li>The Business Plan </li></ul><ul><li>The Presentation </li></ul><ul><li>Executive Summary </li></ul><ul><li>The Elevator Pitch </li></ul>
  37. 40. Your Tools <ul><li>The Business Plan </li></ul><ul><ul><li>Hour </li></ul></ul><ul><li>The Presentation </li></ul><ul><ul><li>20 Minutes </li></ul></ul><ul><li>Executive Summary </li></ul><ul><ul><li>5 Minutes </li></ul></ul><ul><li>The Elevator Pitch </li></ul><ul><ul><li>30 Seconds </li></ul></ul>
  38. 41. Reverse The Order <ul><li>The Elevator Pitch </li></ul><ul><li>Executive Summary </li></ul><ul><li>The Presentation </li></ul><ul><li>The Business Plan </li></ul>
  39. 42. The Elevator Pitch <ul><li>You just happen to get in the elevator with a well known investor. </li></ul><ul><li>You have 30 seconds on the ride to state your idea. </li></ul><ul><li>Hopefully, as the Investor steps out of the elevator, you hear, “Interesting, send me your Executive Summary.” </li></ul>
  40. 43. First Sentence <ul><li>For ___(customers)___ with the problem of ___(problem)____ , we have ___(your idea)_ that can ___(big benefit)__ . </li></ul>
  41. 44. Second Sentence <ul><li>It’s based on __(simple technology)___ that has the advantage of _(competitive advantage)_ that will allow us to ___(define market success)___ and generate __(5 th year sales figure)__ in sales. </li></ul>
  42. 45. Last Sentence <ul><li>We have accomplished __(milestone or two)___ and now we are looking for ___(raise)___ so that we can __(milestones from plan)__ . </li></ul>
  43. 46. First Sentence: Example <ul><li>For ___(customers)___ with the problem of ___(problem)____ , we have ___(your idea)_ that can ___(big benefit)__ . </li></ul><ul><li>EZ-Vein: For nurses and emergency personnel that can’t find a vein for an IV, we have developed a patented, disposable device that redirects blood to engorge the vein and maybe save a life. </li></ul>
  44. 47. Second Sentence: Example <ul><li>It’s based on __(technology)___ that has the advantage of _(advantage)_ that will allow us to ___(define market success)___ and generate __(5 th year sales figure)__ in sales. </li></ul><ul><li>EZ-Vein: It’s based on a hand pump technology that can be used anywhere and will allow us to capture the ambulance and hospital market and generate $20 million a year in sales. </li></ul>
  45. 48. Last Sentence: Example <ul><li>We have accomplished __(milestone or two)___ and now we are looking for ___(raise)___ so that we can __(milestones from plan)__ . </li></ul><ul><li>EZ-Vein: We have patented the idea and prototyped our first units and now we are seeking $400,000 to secure FDA approval, initiate committed field trials, and start generating revenue. </li></ul>
  46. 49. The Presentation <ul><li>20 Minute Opportunity to Present Your Idea </li></ul><ul><li>Pre-scheduled, with Q & A </li></ul>
  47. 50. Assumptions <ul><li>The Business Plan is Complete </li></ul><ul><li>Pitch is to an Investor </li></ul><ul><li>Investor may not have read BP </li></ul><ul><li>There is a Q&A at the end </li></ul>
  48. 51. Ground Rules <ul><li>Remember, it’s a PITCH! </li></ul><ul><li>High Points from Business Plan </li></ul><ul><li>Be Enthusiastic, Be Interesting </li></ul><ul><li>Describe Your OPPORTUNITY! </li></ul>
  49. 52. Ground Rules <ul><li>One Minute per Slide </li></ul><ul><li>Four Bullet Points per Slide </li></ul><ul><li>Four Words per Bullet Point </li></ul><ul><li>Less is More – Keep focus on YOU </li></ul>
  50. 53. For Each Slide: <ul><li>What is the Point? </li></ul><ul><li>Why should THEY care? </li></ul><ul><li>Use $$’s, not ##’s </li></ul>
  51. 54. Outline - Your Idea <ul><li>Title Slide </li></ul><ul><li>Problem </li></ul><ul><li>Your Solution </li></ul><ul><li>Business Model </li></ul>
  52. 55. Outline - Outside World <ul><li>Market </li></ul><ul><li>Competition </li></ul><ul><li>Sales Approach </li></ul>
  53. 56. Outline - Execution <ul><li>Management </li></ul><ul><li>Operations </li></ul><ul><li>Development Milestones </li></ul>
  54. 57. Outline - ROI <ul><li>Financial Projections </li></ul><ul><li>Funding Issues </li></ul><ul><li>Exit Strategy </li></ul>
  55. 58. Outline - Evaluation <ul><li>Status </li></ul><ul><li>Risk Assessment </li></ul><ul><li>Conclusion </li></ul>
  56. 59. Title <ul><li>Who are you? </li></ul><ul><li>What do you do? </li></ul><ul><li>Why are you here? </li></ul><ul><li>Say Your Elevator Pitch </li></ul><ul><li>Contact Information </li></ul>
  57. 60. Problem <ul><li>Clearly show the Problem </li></ul><ul><li>Give Examples </li></ul><ul><li>Make it REAL to the Investor </li></ul><ul><li>What is the Pain in $$’s? </li></ul>
  58. 61. Your Solution <ul><li>ONE Compelling Solution </li></ul><ul><li>Show Value ($) to ONE Customer </li></ul><ul><li>Be Brief on Technology </li></ul><ul><li>State your Intellectual Property </li></ul>
  59. 62. Business Model <ul><li>How Do You Make Money? </li></ul><ul><li>What Do You Sell? To Whom? </li></ul><ul><li>Where Does It Come From? </li></ul><ul><li>Give Price/Cost/Frequency/Volume ($’s) </li></ul>
  60. 63. Market Demand <ul><li>Who is your Market? </li></ul><ul><li>How Big is your Market? ($’s) </li></ul><ul><li>Growth Rate? </li></ul><ul><li>Major Trends </li></ul>
  61. 64. Competition <ul><li>List Major Competitors </li></ul><ul><ul><li>Name and Size </li></ul></ul><ul><li>Group Minor Competitors </li></ul><ul><li>Comparison Charts Are Often Good </li></ul><ul><ul><li>Complete, Honest </li></ul></ul>
  62. 65. Sales Approach <ul><li>What are the Market Segments? </li></ul><ul><li>Which Segment Values You the Most? </li></ul><ul><li>How do you reach them? </li></ul><ul><ul><li>Acquisition Costs? </li></ul></ul><ul><ul><li>Sales Cycle </li></ul></ul><ul><li>Bottom’s Up Sales Forecast </li></ul>
  63. 66. Sales Forecast – Top Down <ul><li>Top Down- 1% of Market </li></ul><ul><ul><li>1% of $1 Billion = $10 million </li></ul></ul><ul><li>Good for Setting Realistic Expectations </li></ul><ul><li>Doesn’t Say How You Get There </li></ul>
  64. 67. Sales Forecast – Bottom Up <ul><li>Independent of Market Size </li></ul><ul><ul><li>Begins with estimates </li></ul></ul><ul><ul><ul><li>Five sales calls/week </li></ul></ul></ul><ul><ul><ul><li>10% close rate </li></ul></ul></ul><ul><ul><ul><li>$50,000 /sale </li></ul></ul></ul><ul><ul><ul><li>Calculates to $1,200,000 / salesperson </li></ul></ul></ul><ul><li>Model can be verified/adjusted </li></ul>
  65. 68. Management Team <ul><li>List Major Team Members </li></ul><ul><li>Include Only Relevant Information </li></ul><ul><li>Major Open Positions and Prospects </li></ul><ul><li>Why YOU and Your Team? </li></ul>
  66. 69. Operations <ul><li>How will you run the company? </li></ul><ul><li>What do you do in-house? </li></ul><ul><li>What do you outsource? </li></ul><ul><li>How do you Leverage Capital? </li></ul>
  67. 70. Development Milestones <ul><li>4 to 7 Significant Milestones </li></ul><ul><ul><li>Table or Chart with Dates </li></ul></ul><ul><li>Layout of Operational Plan </li></ul><ul><ul><li>Product Status </li></ul></ul><ul><ul><li>Sales </li></ul></ul><ul><ul><li>Funding Rounds </li></ul></ul><ul><ul><li>Break-Even </li></ul></ul>
  68. 71. Sample Chart
  69. 72. Financial Projections – 5 Years 2009 2010 2011 2012 2013 REVENUE $36,000 $2,274,000 $7,224,000 $11,400,000 $15,720,000             TOTAL COST $8,820 $1,047,630 $3,347,880 $5,118,000 $6,941,400             GROSS PROFIT $27,180 $1,226,370 $3,876,120 $6,282,000 $8,778,600             OPERATIONS $71,000 $294,700 $761,000 $1,649,950 $2,075,600             NET PROFIT ($43,820) $931,670 $3,115,120 $4,632,050 $6,703,000
  70. 73. Funding <ul><li>Offering XX Equity Shares for $YYY,000 </li></ul><ul><li>Use of Funds </li></ul><ul><ul><li>3 to 6 Lines – Big Picture </li></ul></ul><ul><ul><li>Should Match Development Milestones/Time </li></ul></ul><ul><ul><li>Details in Business Plan </li></ul></ul><ul><li>Additional Funding Required Later? </li></ul>
  71. 74. Exit Strategy <ul><li>What is Your Strategy? </li></ul><ul><ul><li>Initial Public Offering </li></ul></ul><ul><ul><li>Acquisition </li></ul></ul><ul><li>Comparisons in Industry? </li></ul><ul><ul><li>Names of Companies with their Multiples </li></ul></ul><ul><li>Name Acquirers and Give Reasons </li></ul><ul><li>Show Investor the ROI </li></ul>
  72. 75. Status <ul><li>What have you accomplished? </li></ul><ul><ul><li>Development </li></ul></ul><ul><ul><li>Sales </li></ul></ul><ul><ul><li>License Agreements </li></ul></ul><ul><ul><li>Intellectual Property </li></ul></ul><ul><li>How much have you spent? </li></ul>
  73. 76. Risk Assessment <ul><li>What are Your Unique Risks? </li></ul><ul><ul><li>Competition, Adoption Rate, Key Customers? </li></ul></ul><ul><li>What are the Mitigation Strategies? </li></ul><ul><li>Demonstrate Critical Thinking Ability </li></ul>
  74. 77. Conclusion <ul><li>List the Most Important Highlights </li></ul><ul><li>Emphasize Potential of Opportunity </li></ul><ul><li>Thank Them for Their Patience </li></ul><ul><li>Q & A? </li></ul>
  75. 78. Preparing for the Pitch <ul><li>Prevent Technology Glitches </li></ul><ul><ul><li>Check for Computer/Software Capabilities </li></ul></ul><ul><ul><li>Avoid Last Minute Changes </li></ul></ul><ul><ul><li>Avoid Movies, Internet Links, Etc. </li></ul></ul><ul><li>Practice, Practice, Practice </li></ul><ul><li>Check Dress Code </li></ul>
  76. 79. During the Pitch <ul><li>Be Pleasant and Professional </li></ul><ul><li>Listen CAREFULLY to Questions </li></ul><ul><li>Be Open to Suggestions </li></ul><ul><ul><li>Coachable </li></ul></ul><ul><li>Demonstrate that You’re a Good Partner </li></ul>
  77. 80. Rob Perry M.D. EZVein – Intravenous Access July 10, 2009
  78. 81. Market Problem <ul><li>Can’t Give an IV! </li></ul><ul><li>23-40% of initial IV insertions fail </li></ul><ul><li>9% of EMS patients are unable to receive an IV </li></ul><ul><li>Life Threatening </li></ul>
  79. 82. Solution <ul><li>EZVein </li></ul><ul><li>Hand Pump to Pressurize and Locate Vein </li></ul><ul><ul><li>Actively improves intravascular pressure </li></ul></ul><ul><ul><li>Does not require a pulse </li></ul></ul><ul><ul><li>Disposable </li></ul></ul><ul><li>Patent Pending </li></ul>
  80. 83. Prototype
  81. 84. Business Model <ul><li>Outsource Manufacturing </li></ul><ul><ul><li>$5 Cost, $25 Sales Price </li></ul></ul><ul><li>Direct Sales Model </li></ul><ul><ul><li>Statewide EMS (ambulance) </li></ul></ul><ul><ul><li>Corporate Hospitals </li></ul></ul>
  82. 85. Market Demand <ul><li>IV Applications $700 million/year </li></ul><ul><ul><li>28 million IV /year </li></ul></ul><ul><li>4.75% Annual Growth Rate </li></ul><ul><li>Move to Disposable Products </li></ul>
  83. 86. U.S. Market Opportunity   Source: BCC Research 4.75% CAGR
  84. 87. Competition <ul><li>EZ-IO </li></ul><ul><ul><li>Intraosseous Fluid Insertion </li></ul></ul><ul><ul><li>379$ Per EZ-IO Use </li></ul></ul><ul><li>Tourniquet </li></ul><ul><ul><li>Requires Blood Pressure </li></ul></ul>
  85. 88. Target Market <ul><li>EMS Ambulance Services </li></ul><ul><ul><li>Greatest Immediate Need </li></ul></ul><ul><ul><li>Response Time Pressure </li></ul></ul><ul><ul><li>Centralized Non-Bureaucratic Purchasing </li></ul></ul><ul><li>Hospitals </li></ul><ul><ul><li>Corporate Ownership </li></ul></ul><ul><ul><li>Greatest Volumes </li></ul></ul>
  86. 89. Sales Approach <ul><li>Direct Sales Approach to Statewide Organization/Major Metropolitan </li></ul><ul><ul><li>Looking For Solution </li></ul></ul><ul><ul><li>Introduction to OK EMS Manager </li></ul></ul><ul><li>Founders Do Initial Sales </li></ul><ul><ul><li>Hire Salesmen as Earnings Allow </li></ul></ul>
  87. 90. Sales Forecast - EMS <ul><li>10,000 IV’s per 100,000 population </li></ul><ul><li>1,000 IV’s EMS </li></ul><ul><li>Tulsa Metro 800,000> 8,000 IV/year </li></ul><ul><ul><li>$200,000 /yr Tulsa </li></ul></ul><ul><ul><li>$600,000 /yr Oklahoma </li></ul></ul><ul><ul><li>$18 million /yr Texas </li></ul></ul>
  88. 91. Sales Forecast – All IV <ul><li>10,000 IV’s per 100,000 population </li></ul><ul><li>80,000 IV’s in Tulsa </li></ul><ul><ul><li>$2 million/yr Tulsa </li></ul></ul><ul><ul><li>$6 million/yr Oklahoma </li></ul></ul><ul><ul><li>$180 million/yr Texas </li></ul></ul>
  89. 92. Management <ul><li>CEO- Founder Rob Perry M.D </li></ul><ul><li>Outsourced Consultants </li></ul><ul><ul><li>Paladin Medical </li></ul></ul><ul><ul><li>Global Device Solutions </li></ul></ul><ul><li>Strong Board of Directors </li></ul><ul><li>Hire CEO, CFO, Sales VP with Revenue </li></ul>
  90. 93. Operations - Status <ul><li>Created Working Prototype </li></ul><ul><ul><li>Preliminary Testing Effective </li></ul></ul><ul><ul><li>OK and CA Officials Interested </li></ul></ul><ul><ul><li>Outsourcing Manufacturing </li></ul></ul>
  91. 94. Development Timeline <ul><li>Month 1-4 </li></ul><ul><ul><li>Apply for FDA 510k </li></ul></ul><ul><ul><li>Initiate Manufacturing </li></ul></ul><ul><li>Month 5-6 </li></ul><ul><ul><li>Perform Clinical Trials in OK, CA </li></ul></ul><ul><ul><li>Hire Commercialization Assistant, Website Design </li></ul></ul><ul><li>Month 7-9 </li></ul><ul><ul><li>Hire VP Sales/Marketing, </li></ul></ul><ul><ul><li>Sales Campaign and Test Trials </li></ul></ul><ul><ul><li>Seed Capital Round </li></ul></ul><ul><li>Month 10-year 2 </li></ul><ul><ul><li>Hire CEO, Hire 2 Sales Associates, Hire CFO </li></ul></ul>
  92. 95. Finances Financial Projections Year 1 Year 2 Year 3 Year 4 Year 5 Revenues $270,000 $2,900,000 $9,300,000 $14,400,000 $19,200,000 COGS $70,000 $650,000 $1,800,000 $2,587,500 $3,300,000 Gross Profit $200,000 $2,250,000 $7,500,000 $11,812,500 $15,900,000 Gross Profit % 74% 78% 81% 82% 83% Development $266,000 $130,000 $98,000 $120,000 $122,000 Sales & Marketing $32,000 $281,000 $866,000 $1,300,000 $1,960,000 General & Administrative $233,820 $1,016,394 $2,165,728 $2,929,353 $3,876,564 EBITDA ($331,820) $822,606 $4,370,272 $7,463,147 $9,941,436 Operating Profit % -123% 28% 47% 52% 52%
  93. 96. Funding <ul><li>$400,000 in Funding </li></ul><ul><ul><li>$400,000 Equity Funding for 25% Ownership </li></ul></ul><ul><ul><ul><li>$1.2 million Pre-Money Valuation </li></ul></ul></ul><ul><li>Use of Funds </li></ul><ul><ul><li>Clinical Trials $180,000 </li></ul></ul><ul><ul><li>Regulatory Requirements $80,000 </li></ul></ul><ul><ul><li>Sales, General, Administrative $140,000 </li></ul></ul>
  94. 97. Exit Strategy <ul><li>Acquisition by Major Supplier </li></ul><ul><ul><li>Glaxo </li></ul></ul><ul><ul><li>Bendix </li></ul></ul><ul><ul><li>Crito </li></ul></ul><ul><li>Multiples of 6X to 8X EBITDA </li></ul>
  95. 98. Risks <ul><li>Regulatory- FDA 510k approval </li></ul><ul><li>Legal - Risk of Patents </li></ul><ul><li>Financial- Running out of money with unforeseen delay </li></ul><ul><li>Market -Adoption rate is slower than expected </li></ul><ul><li>Managerial- Difficulty finding CEO or other personnel </li></ul>
  96. 99. Conclusion <ul><li>Patented Technology </li></ul><ul><li>Large Market Potential </li></ul><ul><li>Large Gross Margins </li></ul><ul><li>Direct Sales Have Large Volume Deals </li></ul><ul><li>Disposable Product </li></ul><ul><ul><li>Recurring Revenue Model </li></ul></ul>
  97. 100. Questions?
  98. 101. Networking Lunch Return 1:00 pm
  99. 102. COLLEGIATE BUSINESS PLAN COMPETITIONS Entrepreneurship <ul><li>Competition sponsored by Donald W. Reynolds Foundation with partners including EPSCoR & i2E </li></ul><ul><li>Encouraged students to develop and implement businesses </li></ul><ul><li>Promoted commercialization of innovations, ideas & products developed at Oklahoma colleges & universities </li></ul><ul><li>8 businesses launched by winners </li></ul><ul><li>One winner received $80K SBIR grant (USDA) </li></ul>
  100. 103. i2E COMMERCIALIZATION VOUCHERS Entrepreneurship <ul><li>EPSCoR provided $1K vouchers to researchers for commercialization assessment of inventions by i2E </li></ul><ul><li>Nationally recognized proprietary model for assisting entrepreneurs </li></ul><ul><li>Accessed through university tech transfer offices </li></ul>~ 90 technologies assessed ~ 7 resulted in new start-up companies ~25 resulted in commercial development ~10 potential licensing opportunities ~18 show potential commercial and/or licensing opportunities with additional research & development
  101. 104. Cellulosic Bioenergy Potential for Oklahoma <ul><li>Governor’s Biofuels Coalition </li></ul><ul><ul><li>25% of energy needs through biofuels by 2025 {25x’25 Alliance} </li></ul></ul><ul><li>In Oklahoma by 2025* </li></ul><ul><ul><li>2.4 billion gallons of biofuels per year </li></ul></ul><ul><ul><li>43.3 billion KWh of electricity </li></ul></ul><ul><ul><li>134,000 new jobs </li></ul></ul><ul><ul><li>$13 billion in economic activity </li></ul></ul>* Dr. Ernie Shea, 25x25’ Project Coordinator