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Joe Platnick - 2011 Port Tech Expo Presentation


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Early-stage company financing presentation at Port Tech Expo. San Pedro, CA

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Joe Platnick - 2011 Port Tech Expo Presentation

  1. 1. Early-Stage Company FinancingPort Tech Expo Conference San Pedro, CA September 14, 2011 Joe Platnick Partner, Pan-Pacific Capital Ltd. Director Emeritus, Pasadena Angels Copyright 2011 © Pasadena Angels Inc.
  2. 2. Pasadena Angels OverviewFounded in 2000One of largest angel organizations in Southern California and U.S.Approximately 110 members$30 Million invested in over 80 companiesFinance $1-5M with VC co-investmentActive participants – Human & Financial Capital Copyright 2011 © Pasadena Angels Inc.
  3. 3. Start-Up Company FinancingSelf-FundingFriends & FamilyAngel CapitalVenture CapitalGovernment GrantsSmall Business Administration (SBA) LoansCommercial Banks Copyright 2011 © Pasadena Angels Inc.
  4. 4. Company Funding Cycle Pre Seed Seed/ Start-Up Early Later Stage PCF FFF Angels VC FundsSource $25K $100K $500K $2MDemandSupply --------------------------------- Funding Gap Copyright 2011 © Pasadena Angels Inc.
  5. 5. What Every Entrepreneur Should KnowRaising capital requires both time and moneyHaving a good idea is not enoughYou can save time and money if you understand the processIdentify and contact prospective investors whose investment criteriamatchThis research may also help you discover things about the investor that you can use to get your plan noticedInvestors only make a limited number of investments each yearIt’s like college, you’ll be graded on a curveDon’t stop till it’s done Copyright 2011 © Pasadena Angels Inc.
  6. 6. The Path to FundingDevelop Business Plan, Executive Summary and PitchInitial contact through website or memberInclude phone number and e-mail addressProcess - Initial vetting - ~70 companies per month - Screening - Six each month - Breakfast - 1 to 2 each month - Due diligence - Funding - Approximately 12 per annum Copyright 2011 © Pasadena Angels Inc.
  7. 7. The Magic Five SentencesWhat do you do and how are you changing the world?What is your market size and growth rate?What makes you unique vs. competition?Current status and where are you in your development?How much capital do you require-now and total in the future? Copyright 2011 © Pasadena Angels Inc.
  8. 8. Investment CriteriaIs company an interesting opportunity?Competitive advantageIntellectual propertyProspective or actual customers and partnersCurrent and future revenue prospectsFunding sought and use of proceedsDollars invested to dateFunding needs after this roundWhat share of the equity will investors receive?Is the company ready to pitch?Observations from telephone contact frequently tip the balance Copyright 2011 © Pasadena Angels Inc.
  9. 9. Understand the Mind of the InvestorWant and need returns - Can’t continue doing this without themWill shy away from sectors of past failureAre accomplished individuals, but are not overly technicalLove it when the entrepreneur addresses their concernsDo your homeworkBe succinct - Can have short attention spansRespond emotionally as well as to reasonIt’s show-time – show energy and enthusiasmDon’t be dismissive of questions or commentsRun in packsCultivate a champion early Copyright 2011 © Pasadena Angels Inc.
  10. 10. The Investor Cheat SheetProspective investors assess the following after reading/listeningto your pitch: Does the company address an important problem? Do many people have this problem? Does the company offer a good solution? Why is their solution better? Have they made good progress to date? Do they have a sound plan for the future? What about the people? Is this likely to result in a reasonable investment return?It’s best to provide the answers to these up front Copyright 2011 © Pasadena Angels Inc.
  11. 11. Common Denominators of Successful Companies They delight their early customers They listen and learn They are flexible “Plan your dive, dive your plan,” but if your air hose springs a leak,you’d better surface They build the best possible team You can’t do it all, nor are you always the best person for the job Balance energy and enthusiasm with experience They set qualitative and quantitative milestones Identify metrics or qualitative goals that capture your milestones Measure your progress religiously Copyright 2011 © Pasadena Angels Inc.
  12. 12. Top Deal Killers The presentation is not properly focused or lacks clarity If you can’t readily explain your business to yourgrandmother, will your customers get it? Will investors get it? Pitch is long on history, technology, people, but what’s the plan? Presentation lacks details or is incomplete Assumptions are too generic Lack of appreciation for the competition “There are no competitors in our market space.” “Aren’t you just like…” Must kill this perception quickly or you’reheaded for trouble Overestimating the barriers to entry Copyright 2011 © Pasadena Angels Inc.
  13. 13. More Deal Killers Weak (or non-existent) sales/marketing plan Technology looking for a market Poor understanding of the customer Market inertia may be your worst enemy Inaccurate, incomplete, or grossly unrealistic financial projections Unrealistic view of capital requirements Where exactly will this round get you? How will this translate to further financing success? The plan does not suggest a compelling return potential Lifestyle business Initial valuation is too high Early financing rounds bear the highest risk You must instill confidence that the company will be well run Copyright 2011 © Pasadena Angels Inc.
  14. 14. If you have a great product, ahuge and hungry market, a soundplan and a great team to executeit, you won’t need 10 gallons ofgasoline and a box of matches tostart an inferno. Copyright 2011 © Pasadena Angels Inc.
  15. 15. Pasadena Angels Website & Blog Copyright 2011 © Pasadena Angels Inc.