2. A
few
words
about
me
IT
studies:
BSc
and
MSc
in
Informa8cs,
University
of
Oslo
Academic
research:
PhD
in
Maths,
Oxford
University,
Fellow
Magdalen
College
Teaching:
Prof
in
Saudi
Arabia,
Advisor
in
China
SoFware
Development:
DEC
SRC
in
Silicon
Valley,
Alta
Vista
Business
studies:
MBA
at
INSEAD
Management:
Fast
Search
6
Transfer,
MicrosoF
Business
Development:
Boards
and
investments
GeoKnowledge,
Camo,
Sonitor
Board
Work:
StatkraF,
Norsk
Tipping,
Aschehoug,
Making
Waves,
Norman
silvija.seres@gmail.com
www.silvija.net
3. Business
plan
Is
just
an
aRrac8ve
presenta8on
of
a
business
idea.
General
advice:
Be
clear
Be
focused
Be
short
Be
convincing
Make
the
few
points
that
count
RESONATE!
4. Don’t
read
the
slides,
verba.m…
Business
plan
instead,
speak
to
the
key
facts
and
conclusions
you
want
them
to
take
from
each
slide.
Eleven
should-‐have
slides:
1. Cover
–
Business
posi8oning
statement
2. Market
–
The
need
and
what
customers
have
it
3. Solu8on
–
Product,
core
benefit,
protectable
technology(ies)
4. Compe88ve
Posi8on
–
Who
they
are
and
your
defenses
5. Marke8ng
/
Sales
/
Support
–
Channels
and
skills
needed
6. Business
Strategy
–
How
you
plan
to
grow
beyond
launch
7. Financial
Projec8ons
The
usual
spreadsheets
8. Funding
Sought
–
Amount
,
comparables,
use
of
funds
9. Management
–
relevant
experience
10. Milestones
–
e.g.:
product
launch,
next
funding,
breakeven
11. Exit
Strategy
–
IPO
/
acquisi8on
(who?)
Tech
Coast
Angel’s
Guidelines
5. 1
–
Business
posi8oning
statement
The
first
slide
should
posi2on
the
company
so
Jury
members
have
a
framework
for
listening…
1. Company
name
(and
graphics,
if
appropriate)
2. One-‐sentence
“what
we
do”
statement
(posi.oning
or
elevator
pitch)
3. Presenter’s
names
6. 2
–
Market…
The
Need
And
The
Customers
Describe
the
need
and
the
size
of
the
market
Common
Ques2ons…
• What
specific
problem
or
need
do
• List
the
drivers
for
the
demand
for
your
customers
have?
solu2on
(the
benefit
customers
pay
for)
• Why
is
the
problem
important?
For
• Define
the
characteris2cs
of
the
companies
whom?
That
is,
who,
specifically
is
or
consumers
that
need
a
solu2on
the
customer?
• Quan2fy
the
opportunity…
number
of
• How
do
we
know
the
market
exists?
prospects
that
have
the
need
• What
independent
evidence
can
you
• Explain
how
the
market
is
growing
and
why
cite,
such
as
independent
market
research?
Iden2fy
the
most
important
2
–
3
segments
of
• How
large
is
the
specific
(narrowly
defined)
market
for
your
product?
the
market,
and
for
each…
• What
growth
is
expected
in
this
• Es2mated
market
size
(customers
&
market?
poten2al
sales)
• Are
the
market
size
es2mates
• What
dis2nguishes
the
key
segments
from
realis2c?
the
broad
market
and
each
other
• How
urgently
customers
need
or
want
the
solu2on
–
the
value-‐proposi2on
7. 3
–
Solu8on…Your
Product
or
Service
1. Clearly
explain
your
product(s)…
what
it
Common
Ques2ons…
is
that
customers
will
be
buying.
• How
else
can
the
customer
solve
the
problem
your
products
solve?
2. Explain
where
your
product
fits
within
• What
are
the
alterna2ves?
the
whole
solu2on
to
the
customer’s
• How
does
your
product
compare
to
each?
need,
as
customers
see
it.
For
example:
• Why
is
it
beder?
Services,
technologies
or
pla^orms
• In
what
ways
is
it
worse?
(“enablers”)
required
to
make
your
• Who
are
the
vendors
of
these
other
product
effec2ve.
System,
behavior
or
solu2ons?
procedure
conversions
required
to
• How
do
they
compete
with
each
other?
realize
the
key
benefits
• Where
will
you
fit
into
the
industry?
3. Iden2fy
your
product’s
value-‐added
• Why
will
you
be
able
to
compete
effec2vely
against
them
for
the
next
ten
(what
por2on
of
the
whole
solu2on
you
years?
provide)…
and
whether
customers
will
• Why
are
you
confident
that
no
new
see
your
product
as
being
the
main
entrant
will
come
along
with
a
beder
component
of
the
solu2on
solu2on
and
blow
you
away?
• Why
do
you
think
you
can
dominate
your
4. Describe
the
benefits
delivered,
jus2fying
market
niche?
the
cost
of
the
whole
solu2on
vs.
the
expected
benefits.
8. 4
–
Comp
Posi8on…
Compe8tors
&
Barriers
Common
Ques2ons…
Address
three
barriers
to
adop2on:
1. Big
Dogs
–
What
are
huge,
well-‐known
• How
else
can
the
customer
solve
the
problem
your
products
solve?
companies
that
have
exis2ng
products
and
well-‐established
rela2onships
with
•
What
are
the
alterna2ves?
your
target
customers
doing?
How
will
• How
does
your
product
compare
to
each?
they
react
to
your
ini2a2ves?
• Why
is
it
beder?
2. Iner2a
–
What
will
it
take
to
get
customers
to
change
what
they
are
• In
what
ways
is
it
worse?
using
/
doing
today?
• Who
are
the
vendors
of
these
other
3. Innovators
–
What
companies
might
solu2ons?
leapfrog
your
solu2on
with
equal
or
• How
do
they
compete
with
each
other?
beder
solu2ons?
• Where
will
you
fit
into
the
industry?
Explain
how
you
propose
to
win
against
the
• Why
will
you
be
able
to
compete
effec2vely
against
them
for
the
next
ten
years?
best
of
these.
In
par2cular,
describe
your
strongest
barriers
to
compe22on…
i.e.:
if
you
• Why
are
you
confident
that
no
new
entrant
will
come
along
with
a
beder
solu2on
and
are
successful,
how
you
plan
to
block
beder-‐ blow
you
away?
known
or
beder-‐funded
compe2tors
from
• Why
do
you
think
you
can
dominate
your
moving
in
and
taking
over
market
niche?
9. 5
–
Marke8ng
/
Sales
/
Support
Briefly
explain
the
expected
selling
cycle
Common
Ques2ons…
• What
channels
of
distribu2on
will
Describe
how
you
propose
to
reach
your
targeted
you
use
to
deliver
your
products
to
customers
–
focusing
on
the
ini2al
segments
your
customers?
• Marke2ng
–
To
raise
customers’
awareness
of
• How
will
these
channels
be
your
product
and
s2mulate
their
interest
in
established?
By
whom?
When?
buying
• What
exper2se
does
your
company
• Sales
–
To
give
buyers
(buying
decision-‐makers)
a
have
to
execute
the
marke2ng
/
convenient
way
to
find
out
the
details
and
place
sales
program?
an
order
• How
are
you
going
to
stand
out
• Support
–
To
help
customers
understand
your
among
all
the
established
product
before
buying,
during
installa2on
and
in
compe2tors?
use
• How
can
you
boil
down
the
advantages
of
your
sophis2cated
If
you
rely
on
indirect
channels,
explain:
technology
so
prospects
will
understand
it,
quickly
and
easily?
• Your
approach
to
reaching
them
• Whose
responsibility
it
is
to
raise
awareness
and
generate
demand
among
end-‐customers
• Who
provides
pre-‐
and
post-‐sales
support
Describe
special
sales
incen2ve
programs
(if
any)
10. 6
–
Business
Strategy…
Growth
Past
Launch
Common
Ques2ons…
Describe
the
3-‐5
year
goal
of
the
business
Iden2fy
the
several
most
important
steps
you
• What
is
the
business
model?
(i.e.
what
will
produce
the
company’s
reaching
that
goal
revenue?
• Specifically
say
what
you
need
to
do
to
achieve
posi2ve
cash
flow
and
how
long
it
will
take
to
get
• Do
you
have
(or
plan)
any
corporate
partnerships
in
place?
there
• Iden2fy
specific
steps
to
IPO
or
acquisi2on
• What
are
the
significant
risks
your
business
faces?
readiness
• Place
the
key
steps
and
milestones
on
a
Gand
• What
needs
to
be
done
to
finish
your
first
product(s)?
What’s
your
chart
next
act?
• Do
you
rely
on
outside
contractors?
Explain
the
development
status…
how
much
work
How
much
do
you
license
from
remains
before
it
achieves
full
func2onality?
others?
• Show
your
intended
schedule
for
major
product
• What
exper2se
do
you
have
at
development
on
a
2me-‐line
(Gand
chart)
covering
developing
this
kind
of
product?
the
next
18
–
24
months
• What
development
challenges
are
• Iden2fy
major
development
risks
or
challenges
most
important
or
difficult
to
• Provide
es2mated
levels
of
effort
&/or
costs
for
overcome?
How
do
you
intend
to
each
product
do
so?
• Summarize
future
products’
fit
with
market
need
11. 7
–
Financial
Projec8ons
Common
Ques2ons…
Provide
a
P&L
similar
to
this:
Financial Projections ($000s)
• What
kind
of
revenues
can
the
business
produce,
on
an
annual
basis,
over
the
next
New Customers Last 12 Mo. This Year Mo. 13-24 Mo. 25-36 Mo. 37-48
five
years?
Units Shipped • Profits?
Revenues
Gross Profit
• What
investment
is
required
to
carry
the
Gross Margin % company
to
the
next
major
level
of
SG&A
EBITDA valua2on?
Cashflow
Cum. Cashflow • When
do
you
expect
the
next
rounds
to
take
place?
Be
prepared
to
explain
“drama2c”
numbers,
such
• What
specific
tasks
need
to
be
as:
accomplished
to
do
that?
• “Instant”
market
penetra2on
&
dispersion
• How
long
will
it
take?
(Try
to
iden2fy
a
• “Hockey
s2ck”
growth
“next
level”
that
can
be
achieved
in
less
than
18
months.)
• Unprecedented
margins
• What
investment
will
be
required
beyond
• Long
periods
of
nega2ve
cashflow
that?
(“goodness”
is
posi2ve
cashflow
in
6
–
12
• To
the
extent
possible,
explain
key
months)
assump2ons
behind
your
forecast.
And
make
sure
the
forecast
relates
in
a
logical
way
to
the
market
forecasts
you
described
previously.
12. 8
–
Funding…
Amount
,
Valua8ons,
Use
Common
Ques2ons…
Provide
a
capitaliza2on
table
similar
to
this:
• How
much
hard-‐money
Pre-Money Post-Money Round 1 Round 2 Round 3
(cash)
have
the
founders
put
Valuation Raise Valuation Total Founders Investors Investors Investors IPO
in?
Round 1 $ 1,191,892 $ 700,000 $ 1,891,892 100% 63% 37%
$ 1,191,892 $ 700,000
• How
much
cash
have
Round 2 $ 4,000,000 $ 2,500,000 $ 6,500,000 100% 39% 23% 38%
$ 2,520,000 $ 1,480,000 $ 2,500,000 Directors
and
Advisory
Board
Round 3 $ 12,000,000 $ 7,000,000 $ 19,000,000 100% 24% 14% 24% 37%
members
invested?
$ 4,652,308 $ 2,732,308 $ 4,615,385 $ 7,000,000
IPO $ 45,000,000 $ 15,000,000 $ 60,000,000 100% 18% 11% 18% 28% 25%
• What
equity
is
available
to
recruit
key
execu2ves?
$ 11,018,623 $ 6,471,255 $ 10,931,174 $ 16,578,947 $ 15,000,000
Iden2fy
the
major
uses
of
funds
for
each
round
• How
did
you
arrive
at
your
pre-‐money
valua2on
for
this
prior
to
IPO
or
acquisi2on…
this
round,
prior
rounds
round?
and
next
round(s)
• What
comparables
are
you
Describe
the
size
and
composi2on
of
your
current
using
for
your
proposed
IPO/
“burn-‐rate”
exit
round?
The
“sweet
spot”
for
inves2ng?
E.g.
a
pre-‐money
valua2on
of
$1.5M
-‐
$3.0M.
Expect
tough
ques2oning
in
propor2on
to
any
valua2on
higher
than
this
range
13. 9
–
Management
Qualifica8ons…
Common
Ques2ons…
Focus
on
the
management
team,
in
par2cular:
• CEO
–
Prior
entrepreneurial
experience
in
• What
is
your
background
and
previous
experience?
similar
businesses
•
Where
did
the
idea
for
the
company
come
• CTO
–
Proven
know-‐how
in
your
core
from?
technologies
• Who
is
presently
involved
in
managing
the
• CMO
–
Proven
knowledge
of
the
target
company?
markets;
strong
rela2onships
with
channel
• What
are
their
creden2als?
partners
&/or
key
industrial
customers
• CFO
–
Prior
IPO
or
acquisi2on
experience
• Why
will
they
be
able
to
build
a
successful
company?
• If
not
all
management
spots
are
filled,
what
Iden2fy
who
is
full-‐2me
and
who
is
part-‐2me
is
the
plan
for
filling
them?
or
on
the
sidelines
awai2ng
funding…
• What
kind
of
people
are
we
seeking?
To
fill
what
roles?
Iden2fy
BOD
and
BOA
members,
highligh2ng
• If
you
do
not
expect
to
be
the
CEO
that
any
strategic
members’
value-‐added
builds
the
business
to
$10
or
20
million,
what
kind
of
person
would
you
bring
in?
When?
• Who
is
on
your
board
of
directors?
• How
does
the
board
func2on?
14. 10
–
Milestones…
Business
And
Financial
Common
Ques2ons…
Speak
to
a
milestone
chart
similar
to
this:
• What
is
your
track
record
at
2002 2003 2004 2005
hisng
schedules
on
similar
1. Company
formed
efforts?
2. $250K
seed
round
• Are
you
fully-‐staffed
for
the
3. Product
prototype
work
indicated
in
the
schedule?
4. Field
tests
• How
are
you
going
to
get
your
partners
to
meet
your
schedule?
5. $2M
angel
round
6. 1st
produc2on
ship
• What
makes
you
think
you
can
achieve
this
schedule
when
“X”
7. Posi2ve
cashflow
failed?
8. $7M
VC
round
• What
con2ngencies
have
you
9. $75M
annualized
revenue
built
into
the
schedule?
The
budget?
10. IPO/Acquisi2on
15. 11
–
Exit
Strategy…
Liquidity,
When
&
How
Common
Ques2ons…
If
shoo2ng
for
an
IPO…
• Cite
recent
examples
of
successful
• Why
won’t
one
of
your
established
compe2tors
step
in
and
leapfrog
you?
comparable
offerings,
their
offering
• How
long
do
you
think
you
can
maintain
valua2on
and
their
current
market
cap
your
lead,
thus
preserving
your
company’s
• Explain
why
you
believe
the
opportunity
value?
will
remain
when
your
company
is
“ready”
• Why
would
this
be
an
exci2ng
business
If
you
an2cipate
being
acquired…
opportunity
for
an
acquirer?
• Iden2fy
the
two
or
three
most
likely
buyers
• Why
would
it
an
exci2ng
IPO
opportunity?
• Explain
why
they
would
be
interested
• What
are
the
three
most
serious
risks
the
• If
possible,
describe
recent
acquisi2ons
of
company
faces?
comparable
companies
and
the
deal
value
Describe
any
rela2onships
you
already
have
with
poten2al
acquirers,
investment
banks
or
VCs
that
might
facilitate
your
liquidity
plans
• NOTE:
If
you
aren’t
sure
how
to
value
the
company
in
the
future,
use
1
x
annual
sales
in
Year-‐2
and
15
or
20
x
net
profits
in
Year-‐3
as
reasonable
es2mates.
16. Tools:
VISION
1. "What
do
we
do?"
.
Purpose
2. "For
whom
do
we
do
it?"
3. "How
do
we
excel?
Vision
Values
FOCUS!
21. Tools:
Team
Which
are
you?
Roles:
1. The
plant
Ac2on
oriented
2. Resource
inves2gator
Communica2on
oriented
3. Co-‐ordinator
Knowledge
oriented
4. Shaper
5. Monitor
6. Team
worker
7. Implementor
8. Completer
9. Specialist
22. Tools:
Op8miza8on
3
loops:
1. Draz
plan
2. Refine
plan
3. Op2mize
plan
In
each
loop:
1. Gather
ideas
2. Consolidate
into
a
concept
3. Implement
23. Tools:
More
thoughts
Culture
eats
strategy
for
breakfast
PASSION
eats
strategy
for
breakfast!
Speed
is
no
replacement
for
direc2on.
Do
what
you
know
and
care
about!
Do
not
compromise
on
people.
Acknowledge
and
appreciate
risk
takers.
Prima
donnas
are
OK.
Nega2ves
are
not.
25. Tools:
Compe88ve
Differen8a8on
Being
different
from
compe8tors
isn’t
enough.
Make
sure
that
your
key
differen2ators
actually
maEer
to
customers.
Pick
any
differen2a2on
you
want
–
pricing,
features,
target
market,
market
gap,
performance,
etc.
–
unless
customers
really,
really,
really
care
about
the
difference,
it
does
not
mader!
26. Tools:
Compe88ve
Differen8a8on
The
compe22on
i
any
alterna2ve
that
meets
the
same
need.
Percep2on
is
fact.
Know
the
“primary
value
proposi2on”
in
your
value
chain.
28. Tools:
Value
chain
analysis
1. Ac8vity
Analysis,
where
you
iden2fy
the
ac2vi2es
that
contribute
to
the
delivery
of
your
product
or
service.
2. Value
Analysis,
where
you
iden2fy
the
things
that
your
customers
value
in
the
way
you
conduct
each
ac2vity,
and
then
work
out
the
changes
that
are
needed.
3. Evalua8on
and
Planning,
where
you
decide
what
changes
to
make
and
plan
how
you
will
make
them.
29. Tools:
Core
Competence
Analysis
Relevance:
Firstly,
the
competence
must
give
your
customer
something
that
strongly
influences
him
or
her
to
choose
your
product
or
service.
If
it
does
not,
then
it
has
no
effect
on
your
compe22ve
posi2on
and
is
not
a
core
competence.
Difficulty
of
Imita8on:
Secondly,
the
core
competence
should
be
difficult
to
imitate.
This
allows
you
to
provide
products
that
are
beder
than
those
of
your
compe22on.
And
because
you're
con2nually
working
to
improve
these
skills,
means
that
you
can
sustain
its
compe22ve
posi2on.
Breadth
of
Applica8on:
Thirdly,
it
should
be
something
that
opens
up
a
good
number
of
poten2al
markets.
If
it
only
opens
up
a
few
small,
niche
markets,
then
success
in
these
markets
will
not
be
enough
to
sustain
significant
growth.
