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Startup Secrets - Getting Behind the Perfect Investor Pitch

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These days the pitch to a VC displaces the old business plan because most investors simply don’t have time to read a full business plan, and most entrepreneurs don’t have time to write one. That said, the business strategy still serves as the foundation for any presentation you create.

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Startup Secrets - Getting Behind the Perfect Investor Pitch

  1. Proprietary and Confidential START UP SECRETS An insider’s guide to unfair competitive advantage Getting behind the Perfect Pitch @underscorevc #startupsecrets
  2. Proprietary and Confidential My Agenda (for this workshop) • Checklist for a pitch • Selective drill down • Get behind the pitch • Q&A • NOT how to give your pitch • … a story
  3. Proprietary and Confidential 3
  4. Proprietary and Confidential Your Agenda What are we going to cover? (Example) • Team • Business Overview • Market Opportunity • Value Proposition • Go to Market plan • Business Model • Financials
  5. People
  6. Proprietary and Confidential Team  Founders  Management  Board  Advisors startupsecrets.comGetting behind the Perfect Pitch 6
  7. Proprietary and Confidential Team - Founders  What led you to this opportunity? • What was your specific insight?  How are you uniquely advantaged to build this business? • Relevant life experiences? • Domain expertise gained?  Teaming • How do you know each other? • Results of having worked together?  TBH: who else is needed on the team? startupsecrets.comGetting behind the Perfect Pitch 7
  8. Proprietary and Confidential Note For a more complete discussion of this section, see the presentation at www.startupsecrets.com on “Culture, Mission & Vision ” www.startupsecrets.com/culture-mission-and-vision startupsecrets.comGetting behind the Perfect Pitch 9
  9. Orientation
  10. Proprietary and Confidential Business Overview “We do xx for yy by uniquely zz” Keep it short and sweet for context and orientation only (This should be consistent with your value proposition and positioning) startupsecrets.comGetting behind the Perfect Pitch 11
  11. Problem?
  12. Proprietary and Confidential Problem Statement What problem are you solving? (uniquely well, for who?) startupsecrets.comGetting behind the Perfect Pitch 13
  13. Proprietary and Confidential Market opportunity
  14. Proprietary and Confidential Market opportunity  Broadening of problem statement to general market • Business Pain • Technology Need  Why NOW ? 1. Market dislocations? 2. Forcing events? 3. Buyer Triggers? startupsecrets.comGetting behind the Perfect Pitch 15
  15. Proprietary and Confidential Value Proposition
  16. Proprietary and Confidential  How you address the pain / need?  Your Product / Service… • What’s unique & defensible about it? • Why is it a breakthrough? • How is it compelling? Value proposition / solution startupsecrets.comGetting behind the Perfect Pitch 17
  17. Proprietary and Confidential BeforeAfter
  18. Proprietary and Confidential Value Proposition Before After Acute Pain  Absolute Joy  Vitamin vs. Penicillin startupsecrets.comGetting behind the Perfect Pitch 19
  19. Proprietary and Confidential “Gain/Pain ratio” The gain delivered to the customer vs. The pain and cost for the customer to adopt Gain Pain startupsecrets.comGetting behind the Perfect Pitch 20
  20. Proprietary and Confidential “Gain/Pain ratio” > 10 to overcome Inertia, RISK startupsecrets.comGetting behind the Perfect Pitch Gain Pain >10 Inertia, RISK 21
  21. Proprietary and Confidential Examples, case studies  PROOF of what you do uniquely well  Articulate from customer viewpoint • Tangible benefits  Easily measured ROI?  Short Payback period?  Articulate from your viewpoint • How repeatable, scalable it is (leads up to how you will make money from it later) startupsecrets.comGetting behind the Perfect Pitch 23
  22. Proprietary and Confidential Vision & Mission  How the market will evolve?  How will you will lead it?  What is your mission? (Leads from and consistent with Market Opportunity earlier) startupsecrets.comGetting behind the Perfect Pitch 24
  23. Proprietary and Confidential If you’re not early with a vision, you’re probably too late
  24. Proprietary and Confidential Where does it all fit? Building an enduring company: Vision (Market) Startup Roadmap Enduring Compan y Value Proposition People Team Execution Cultural Consistency startupsecrets.comGetting behind the Perfect Pitch 26
  25. Proprietary and Confidential What is the roadmap to achieving your mission? • Market evolution & drivers • Key milestones to address that evolution
  26. Proprietary and Confidential Market Sizing
  27. Proprietary and Confidential Top Down
  28. Proprietary and Confidential Bottom Up
  29. Proprietary and Confidential Market sizing – top down & bottom up  Total available market – top down • Quote sources like IDC, Gartner, Forrester  Addressable market – bottom up • Clarify basis  Growth • Drivers startupsecrets.comGetting behind the Perfect Pitch 32
  30. Proprietary and Confidential Competition
  31. Proprietary and Confidential Competition  Unique differentiation • Not just technology  Barriers to entry • Rewind, repeat: not necessarily just technology!  What is impenetrable, sustainable? • IP, patents, network, data etc startupsecrets.comGetting behind the Perfect Pitch 34
  32. Proprietary and Confidential Positioning 2x2 Whatever sets you up… for a unique white space High HighLow Low b c d {whitespace} Bubble sizing for relative size of competitors The choice of axes is critical Define real BARRIERS To entry into each segment a startupsecrets.comGetting behind the Perfect Pitch 35
  33. Proprietary and Confidential Go to Market
  34. Proprietary and Confidential Go To Market example highlights:  Marketing Plan • Segmentation, targeting, personification • Marketing & Sales cycle • Inbound / Outbound  Sales Plan • Inside / outside pre-sales and sales • Direct / indirect channels & distribution • Services and or product … in sync with business model startupsecrets.comGetting behind the Perfect Pitch 37
  35. Proprietary and Confidential Sales Plan Marketing Plan Go To Market startupsecrets.comGetting behind the Perfect Pitch Awareness Interest Understanding Engagement Trial Purchase 38
  36. Proprietary and Confidential Business Model: How do you make money? What is your model for • Creating • Delivering • Harnessing VALUE? startupsecrets.comGetting behind the Perfect Pitch 40
  37. Proprietary and Confidential Business Model: Examples: startupsecrets.comGetting behind the Perfect Pitch 41
  38. Proprietary and Confidential Your Revenue streams… • How do they align with customer’s interests? • Do they encourage partners?
  39. Proprietary and Confidential Show me the money! startupsecrets.comGetting behind the Perfect Pitch 44
  40. Proprietary and Confidential Financials • P&L, Cash Flow – One year by quarter minimum – Plus annual up to 5 years thereafter, highlighting – Cash flow positive – Breakeven • Minimum suggested information / detail as needed for the above – Headcount – Bookings – Revenue • May need to break out things like Services depending on your business – Gross Margin – Expenses • Major categories like R&D, Sales, Marketing, G&A shown as needed – Profit/Loss – Cash startupsecrets.comGetting behind the Perfect Pitch 45
  41. Proprietary and Confidential Numbers
  42. Proprietary and Confidential Assumptions, Milestones & Metrics are more important than the spreadsheet! E.G. • Key hires • Product beta, ship • First customers • Channel partners • Etc…
  43. Proprietary and Confidential Realistic optimists? startupsecrets.comGetting behind the Perfect Pitch 48
  44. Proprietary and Confidential
  45. Proprietary and Confidential ??!
  46. Proprietary and Confidential Cash raise  Use of proceeds falls out of Financials  Typically 18 months of runway  Highlight key milestones that would set up for next round startupsecrets.comGetting behind the Perfect Pitch 51
  47. Proprietary and Confidential Summary  Why this is a great investment ?  Why do you have unfair competitive advantage? Recap on what you said you’d cover in your agenda, making it obvious why this is a great investment and why your are advantaged to succeed… At _Underscore.VC we look to invest in uniquely qualified teams going after large new markets by solving significantly painful problems with disruptive and defensible new ways to build and deliver value. IE “Game-Changers” startupsecrets.comGetting behind the Perfect Pitch 53
  48. Proprietary and Confidential Video from Great Wall 62
  49. Proprietary and Confidential Questions?
  50. Proprietary and Confidential Thank you… startupsecrets.com /mjskok linkedin.com/in/mjskok bit.ly/mjskok-google bit.ly/mjskok-youtube michael@underscore.vc startupsecrets.comGetting behind the Perfect Pitch 65
  51. Proprietary and Confidential T 617.303.0064 @underscorevc 53 State Street, 10th Fl Boston, MA 02109

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