Bootcamp day 1

Developingtalent•Growingventures•Openingmarkets
Visit us at marsdd.com
Pitching to Investors Bootcamp
B O G O T A , 2 4 - 2 6 A U G U S T 2 0 1 6
L A N C E L A K I N G
J O N E W O R R E N
26

Agenda, Day 1
09:00 Introductions & Objectives
09:15 What’s in a great pitch?
10:15 Break
10:30 Review of Great Pitches
11:30 Value Proposition, Part I: The Lean StartUp Process
12:30 Lunch
13:30 Value Proposition, Part II:
15:15 Break
15:30 Principles of Communication
16:00 Pitch Clinic
16:45 Review & reflection
17:00 Adjourn

INTRODUCTIONS
• Tell us who you are
• What your is your business
• What you hope to get from this Bootcamp
• 30 seconds…..
8/26/2016

What’s in a great Pitch?

THE 10 KEY COMPONENTS OF A
PITCH

Visit us at marsdd.com 8/26/2016
Problem/Hook
Value Proposition Business Model Underlying Magic
Marketing & Sales Competition Team
The Ask &
Financials
The Ask &
Timeline
Summary

The Investment Story
• Act 1
Pg
7
Hook/probl
em
Marketing
& Sales
Competition
Underlying
Magic
Summary
Value
Proposition
Financials &
The Ask
Timeline &
The Ask
Business
Model
Team

The Problem Hook
• ExamplesMedium Hook Message
The Globe
and Mail
“Bringing
Executive Pay
Down to
Earth”
“I know a guy who used to run
a bank, back in the olden days.
Nobody had heard of stock
options then. He lived in a nice
house, but not a mansion…“
This article argues for a more
equitable distribution of
capital to create a fairer
society.
Inconvenient
Truth
Images of a river, trees and
birds, with Al Gore’s narration
talking about Nature
This movie is about preserving
human relationships with
Nature
BeerLabs 60
second pitch
“Are you bored of mass-
produced beers?”
I want to revolutionize the
beer industry in China.
ABC Biomed “Every day, 483 people die of
lung cancer in North America”
I want to cure lung cancer

The Problem Hook
• Activity
1. Pick one person in your group to explain their business
to the others.
2. Take 60s to write an answer to the following question:
“Why are you starting this business?” Share with the
group.
3. Now, with the help of your group, come up with a hook
that explains the fundamental problem you are trying to
solve and why you started the business. You can write,
sketch pictures or use statistics.
4. Take turns

The Value Proposition
1.What your product is
2.Who is the target customer
3.What value you bring your target customers
The Value Proposition provides a solution to your
problem hook:

• Activity
For _________________ (insert target customer)
Who _________________ (insert their need/problem)
We have developed _____________ (insert what it is)
That helps __________ _______ (list values)
1. Write your value proposition:

• Activity
2. Share with your group.
3. Make sure there is a good “pairing” between
your value proposition and your hook.

• Examples
Beer Labs is a microbrewery and bar in Shanghai
where young professionals in China can go to brew
their own personal beer and consume fresh food and
drinks.
ABC Biomed has developed a proprietary oral drug for
Stage 3 lung cancer patients designed to decrease
tumor size and increase their quality of life.

• Act 2
Hook/probl
em
Marketing
& Sales
Competition
Underlying
Magic
Summary
Value
Proposition
Financials &
The Ask
Timeline &
The Ask
Business
Model
Team

Business Model
A business model describes the value an
organization offers its customers and illustrates the
capabilities and resources required to create,
market and deliver this value and to generate
profitable, sustainable revenue streams.

• Example: 10,000 Villages
Ethically
conscious
consumers
with
disposable
income.
TTV provides
a wide
selection of
unique hand-
crafted goods
from verifiably
fair-trade
artisans in
developing
countries.
-Retail
-On-line
-(Wholesale)
-Transaction-
based
-Mailing list w
suggested
products
-Return policy
-Developing
world artisans
-World Fair
Trade Org
-Mennonite
Central
Committee
-volunteers
-Retail sales
-Speakers bureau
-Tax breaks (non-profit)
-Marketing
-Real estate
procurement
-Negotiate deals
w artisans
-Importing
-Brand
-Salespeople
-Real estate
-Pay artisans
-Rent on stores
-Web hosting
-Pay staff
Business Model

Components of a business model
 How do you acquire customers?
 How do you charge them?
 How much do you charge them?
 What are your fixed costs?
 What are your variable costs?
 What are the assets you have available to you?
 Who are your key partners?
 What are the key activities you need to engage in to
deliver your value proposition?
• Checklist

Business Model
• Activity
Either by sketching on the business model
canvas, or writing down answers to the
checklist, brainstorm components of your
business model you need to explain to investors.

Underlying magic
• Activity
- Describe your product or service(s)
- Include photos or screen shots
- Detail how your product is scalable and when you
plan to launch
- Outline the next R&D steps to further build on or
improve your offering.
- Include a discussion of intellectual property
- How will you protect your IP?

Visuals
Products Software Services

Visuals
• ActivityProducts Software Services
Take 5 mins: What’s the best way to represent your
product/service in a business plan or pitch presentation?

Marketing and Sales
You will eventually need to answer all these questions:

Marketing and Sales
• Activity
1. What is your pricing strategy?
2. Through which media will you communicate with your market?
3. What is your branding strategy?
4. Who are the Key Opinion Leaders (KOLs) in your field?
5. How long is your sales process?
6. Where do you get your prospective customers

Competition
There is always competition
• Competition
Reference Competition
Same
category
Substitute
category
Economic Competition
“Budget”
Category
“We have no (real) competitors”

Competition
• The Strategy Canvas

External Analysis
• Competition Matrix

External Analysis
• Activity
Sketch a quick competition matrix for you and your
nearest competitors (include the “status quo” option)
Value
1
Value
2
Value
3
Value
4
…
Your company
Company 2
Company 3
Status quo
company
…

Management team
Breadth of experience
Depth of experience
- Names
- Domain credentials
- Ability to work together
- Past individual success
- Past collective success
- Next hires – gaps in your
team

Management team
• Activity
Names Sergey Brin Mark
Zuckerberg
Bill Gates
Domain
Credentials
Ability to work
together
Past individual
success
Past collective
success
?

• Act 3
Hook/probl
em
Marketing
& Sales
Competition
Underlying
Magic
Summary
Value
Proposition
Financials &
The Ask
Timeline &
The Ask
Business
Model
Team

Financial projections
Beware the
hockey stick
graph!

• Example
Financial projections need to be based on verifiable
assumptions
Pro forma income statement from Business Plans for Dummies
(1997)

• Example
Investment
required =
$800,000
Focus on R&D for v 2.0
Launch 2.0
Break Even

• Example: current status
Sources of Funding Existing financing ($) Projected financing ($)
Investment by founders $10,000 each =
($30,000)
0
Equity investment from
angels
$150,000 $300,000
Equity investment from
VCs
0 $500,000
Debt financing 0 0
Cash flow from
operations
$2,000 per month $20,000 per month
TOTAL: $182,000 $820,000

• Example: Use of proceedsUse of proceeds Amount ($)
Sales and marketing $250,000
Research &
development
$65,000
Recruiting costs $5,000
Future salaries $75,000 X 5 years =
$375,000
Legal and accounting $100,000
TOTAL $780,000

Intellectual Property (IP) Valuation
Sources: American Institute of Certified Public Accountants; Licensing Executives Society
Cost Approach: How much does a non-infringing alternative
cost?
Income Approach: What is a reasonable present value of
excess economic returns?
Market Approach: How much have others paid for
comparable technology?

Risk analysis
• Example
Type of Risk Risk Mitigating strategy
Supply chain risk Government
upheaval in Nigeria
Secure alternate sources of
goods in nearby countries
Market
adoption
Customers won’t
buy it
Complete market research to
position the product
Financing risk We may not be able
to sufficiently
finance start-up
phase
Develop alternate financing
scenarios to ensure we meet key
milestones
Executive risk This is the first
venture for this
management team
We have supplemented our
team with industry leading
advisors

To-do: Gather the information
• Value
proposition/positioning
statement
• Business model
• Market Intelligence
• MarCom goals
• Pricing
• Competition
• Patent information
• List of past clients
• List of partners and
stakeholders
• Logo
• Financial information
• Technology white
papers
• Key employee
information

BREAK
8/26/2016

The Investor Perspective: Review of
Great Pitches

Value Proposition, Part I

Our Future Matters
WHAT IS A VALUE PROPOSITION?
Our Framework….

Our Future Matters
Talking With Scientists

Our Future Matters
VALUE
What is Value?
• What are the different ways in which customers value
products?

Our Future Matters
Value Proposition - Definition
• A value proposition is a statement of the unique benefits
delivered by your offering to the target customer.
• It describes the unique value of your product or brand and
offers a compelling reason for customers to buy.

Our Future Matters
A Tagline – Ad complement
– “We know money”
– “What Happens Here, Stays Here”
– “The City That Never Sleeps”
– “Built for the road ahead”
An Elevator Pitch – Social/conversation
purpose
Value Proposition is Not:

Our Future Matters
The value proposition statement should
consist of the following components:
– What you are offering
– The specific value associated with your
offering
– For whom you are creating value
– (…Why your product is different from
everything else on the market)
Value Proposition

Our Future Matters
Good: “Winners is a department store that
offers fashion conscious consumers the
latest brand names for up to 60 per cent off.”
(Winners)
Bad: “Winners is an off-price department
store owned by TJX that employs
international sourcing and buying power.
Examples:

Our Future Matters
Good: “Winners is a department store that offers
fashion conscious consumers the latest brand
names for up to 60 per cent off.” (Winners)
Bad: “Winners is an off-price department store
owned by TJX that employs international
sourcing and buying power.”
Examples:
What is it?
For whom?
Values?

Our Future Matters
Good: “A1 Industries has developed an
economical and easy-to-use chemical additive
that allows paint manufacturing companies to
reduce the environmental impact of their
products
Bad: “A1 Industries has discovered a chemical
isomer additive that allows for a reduction of
VOC emissions.”
Examples:

Our Future Matters
Good: “A1 Industries has developed an
economical and easy-to-use chemical additive
that allows paint manufacturing companies to
reduce the environmental impact of their
products
Bad: “A1 Industries has discovered a chemical
isomer additive that allows for a reduction of
VOC emissions.”
Examples:
What is it?
For whom?
Values?

Our Future Matters
Good: “Google is the world’s largest search
engine that allows internet users to find relevant
information quickly and easily.”
Bad: “Google uses a patented page-ranking
algorithm to make money through ad
placement.”
Examples:

Our Future Matters
engine that allows internet users to find relevant
information quickly and easily.”
placement.”
Examples:
Are Internet Users really Google’s customers?
What is it?
For whom?
Values?

Our Future Matters
engine that automatically provides advertisers
with potential customers tailored to the ad
content, increasing click-through rates and
conversion rates.”
placement.”
Examples:
What is it?
For whom?
Values?

LUNCH
8/26/2016

Value Proposition, Part II

Our Future Matters
VALUE PROPOSITION DESIGN

Our Future Matters
Value Proposition Designer

Our Future Matters
Right side: Customer Jobs
• What functional jobs are you
helping your customer get done?
(e.g. perform or complete a
specific task, solve a specific
problem, ...)
• What social jobs are you helping
your customer get done? (e.g.
trying to look good, gain power or
status, ...)
• What emotional jobs are you
helping your customer get done?
(e.g. esthetics, feel good, security,
...)
• What basic needs are you helping
your customer satisfy? (e.g.
communication, sex, ...)
Besides trying to get a core job done,
your customer performs ancillary jobs
in different roles. Describe the jobs
your customer is trying to get done
as:
• Buyer (e.g. trying to look good,
gain power or status, ...)
• Co-creator (e.g. esthetics, feel
good, security, ...)
• Transferor (e.g. products and
services that help customers
dispose of a product, transfer it to
others, or resell, ...)

Our Future Matters
• Rank each job according to its significance to
your customer. Is it crucial or is it trivial? For
each job indicate how often it occurs.
• Outline in which specific context a job is done,
because that may impose constraints or
limitations. (e.g. while driving, outside, …
Customer Jobs
• Activity

Our Future Matters
Gains
• Which savings would make your
customer happy? (e.g. in terms of
time, money and effort, ...)
• What outcomes does your
customer expect and what would
go beyond his/her expectations?
(e.g. quality level, more of
something, less of something, ...)
• How do current solutions delight
your customer? (e.g. specific
features, performance, quality, ...)
• What would make your
customer’s job or life easier? (e.g.
flatter learning curve, more
services, lower cost of ownership,
...)
• What positive social consequences
does your customer desire? (e.g.
makes them look good, increase in
power, status, ...)
• What are customers looking for? (e.g.
good design, guarantees, specific or
more features, ...)
• What do customers dream about?
(e.g. big achievements, big reliefs, ...)
• How does your customer measure
success and failure? (e.g.
performance, cost, ...)
• What would increase the likelihood of
adopting a solution? (e.g. lower cost,
less investments, lower risk, better
quality, performance, design, ...

Our Future Matters
1. Rank each gain according to its relevance to
your customer.
2. Is it substantial or is it insignificant?
3. For each gain indicate how often it occurs.
Gains
8/26/2016
• Activity

Our Future Matters
Pains
• What does your customer find
too costly? (e.g. takes a lot of
time, costs too much money,
requires substantial efforts, ...)
• What makes your customer feel
bad? (e.g. frustrations,
annoyances, things that give them
a headache, ...)
• How are current solutions
underperforming for your
customer? (e.g. lack of features,
performance, malfunctioning, ...)
• What are the main difficulties and
challenges your customer
encounters? (e.g. understanding
how things work, difficulties
getting things done, resistance, ...)
• What negative social consequences
does your customer encounter or
fear? (e.g. loss of face, power, trust,
or status, ...)
• What risks does your customer fear?
(e.g. financial, social, technical risks,
or what could go awfully wrong, ...)
• What’s keeping your customer awake
at night?(e.g. big issues, concerns,
worries, ...)
• What common mistakes does your
customer make? (e.g. usage mistakes,
...)
• What barriers are keeping your
customer from adopting solutions?
(e.g. upfront investment costs,
learning curve, resistance to change,
...

Our Future Matters
1. Rank each pain according to the intensity it
represents for your customer.
2. Is it very intense or is it very light?
3. For each pain indicate how often it occurs.
Pains
8/26/2016
• Activity

Our Future Matters
YOUR SOLUTION
Part IV: Designing Your Solution

Our Future Matters
Gain Creators
• Produce outcomes your customer
expects or that go beyond their
expectations? (e.g. better quality
level, more of something, less of
something, ...)
• Copy or outperform current
solutions that delight your
customer? (e.g. regarding specific
features, performance, quality, ...)
• Make your customer’s job or life
easier? (e.g. flatter learning curve,
usability, accessibility, more
services, lower cost of ownership,
...)
• Produce positive outcomes
matching your customers success
and failure criteria? (e.g. better
performance, lower cost, ...)
• Create positive social consequences
that your customer desires? (e.g.
makes them look good, produces an
increase in power, status, ...)
• Do something customers are looking
for? (e.g. good design, guarantees,
specific or more features, ...)
• Fulfill something customers are
dreaming about? (e.g. help big
achievements, produce big reliefs,
...)
• Create savings that make your
customer happy? (e.g. in terms of
time, money and effort, ...)
• Help make adoption easier? (e.g.
lower cost, less investments, lower
risk, better quality, performance,
design, ...)

Our Future Matters
• Rank each gain your products and services
create according to its relevance to your
customer.
• Is it substantial or insignificant?
• For each gain indicate how often it occurs.
Gain Creators
8/26/2016
• Activity

Our Future Matters
Pain Relievers
• Produce savings? (e.g. in terms of
time, money, or efforts, ...)
• Make your customers feel better?
(e.g. kills frustrations, annoyances,
things that give them a headache,
...)
• Fix underperforming solutions?
(e.g. new features, better
performance, better quality, ...)
• Put an end to difficulties and
challenges your customers
encounter? (e.g. make things
easier, helping them get done,
eliminate resistance, ...)
• Wipe out negative social
consequences your customers
encounter or fear? (e.g. loss of
face, power, trust, or status, ...)
• Eliminate risks your customers
fear? (e.g. financial, social,
technical risks, or what could go
awfully wrong, ...)
• Help your customers better sleep
at night? (e.g. by helping with big
issues, diminishing concerns, or
eliminating worries, ...)
• Limit or eradicate common
mistakes customers make? (e.g.
usage mistakes, ...)
• Get rid of barriers that are
keeping your customer from
adopting solutions? (e.g. lower or
no upfront investment costs,
flatter learning curve, less
resistance to change, ...

Our Future Matters
• Rank each pain your products and services kill
according to their intensity for your customer.
• Is it very intense or very light?
• For each pain indicate how often it occurs.
• Risks your customer experiences or could
experience before, during, and after getting the
job done?
Pain Relievers
8/26/2016
• Activity

Our Future Matters
Products & Services
All products and services you
want to offer
• Which products and services do
you offer that help your customer
get either a functional, social, or
emotional job done, or help
him/her satisfy basic needs?
• Products and services may either
by tangible (e.g. manufactured
goods, face-to-face customer
service), digital/virtual (e.g.
downloads, online
recommendations), intangible
(e.g. copyrights, quality
assurance), or financial (e.g.
investment funds, financing
services).
Ancillary products and services
• Buyer (e.g. products and services
that help customers compare
offers, decide, buy, take delivery
of a product or service, ...)
• Co-creator (e.g. products and
services that help customers co-
design solutions, otherwise
contribute value to the solution,
...)
• Transferror (e.g. products and
services that help customers
dispose of a product, transfer it to
others, or resell, ...)

Our Future Matters
• Rank all products and services according to
their importance to your customer.
• Are they crucial or trivial to your customer?
Products & Services
• Activity

Our Future Matters
Write Your Value Proposition
Part VII

Our Future Matters
The value proposition statement should consist
of the following components:
1. What you are offering
2. The specific value associated with your
offering
3. For whom you are creating value
(…Why your product is different from
everything else on the market – if this
improves clarity)
Recap:
• Value Proposition Content

Our Future Matters
• Activity: 10 minutes
For _________________ (insert target customer)
Who _________________ (insert their need/problem)
We have developed _____________ (insert what it is)
That helps __________ ,_______,________ (list values)
1. Write your value proposition statement:

Principles of Communication

COMMUNICATION 101
8/26/2016
Sender ReceiverMessage
Entrepreneur InvestorPitch

Communication Tools for Investors
The Pitch
The Executive Summary
The Business Plan
The Elevator Pitch
Technical White Paper
Video Reference: “Communication Tools for Investors”, E101, V. Litinski

Comparing Tools
• Pitch deck vs. Business planPitch Deck Business Plan
Anecdote Data
Big picture Granular
Emotional Rational
Visual/Oral Written
Very dynamic Less dynamic
Short (10 slides; 20 mins) Long (20 pages)
Used in early meetings Used for due diligence
Summarized in Exec
Summary
Summarized in Exec
Summary

SUCCES
• Good communication techniques for ANY media
Simple
Unexpected
Concrete
Credible
Emotion
Story

Simple

Our Future Matters
Unexpected

Concrete

Credible

Emotion

Investors don’t invest in businesses.
They invest in stories about businesses.
VentureHacks

Telling Your Story
Inciting
Incident
Confrontation
Climax
Decision
Resolution
Act 1: Act 2: Act 3:

Story
• Example: Spiderman
High school
kid gets
bitten by
spider
Spider-man
battles bad
guys
Spider-man
battles head
bad guy
Wins
Things have
changed for the
better (or worse)

Story
• Example: facebook
Pg
10
4
University kid
has a good
idea while at
Harvard
Battles
competition, non-
believers, market
forces
Looks for VC
investment Gets VC
investment/gets
sued
Grows to
valuation of
$100 B

• Act 3
Pg
10
5
Hook/proble
m
Marketing &
Sales
Competition
Underlying
Magic
Summary
Value
Proposition
Financials &
The Ask
Timeline & The
Ask
Business
Model
Team

Pg 106
The Storyboard

• http://www.marsdd.com/collections/
Additional Resources
26 August
2016Presentation Title Goes Here

PITCH CLINIC

Value Proposition
• In groups of 3:
• Practices your value proposition statement
• Get feedback from group members on content
& communication value (succinctness, clarity
etc.)
• Revise as needed
• Ask if you have questions
8/26/2016

SUMMARY & REFLECTIONS
8/26/2016

Bootcamp day 1

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