You have a great idea for a new business. Offtoa helps you validate it for financing and show you how to get it investor ready.

1. Validating Your Great
Business Idea

2. You’re Here Because
You Have a Great Idea for a
New Business

3. We’re Here Because
We Can Help You Validate
Your Great Idea

4. And Show You
How to Get it Investor-Ready!

5. What do you have to do to
validate your idea?
• Is the market right?
• Is the industry right?
• Will you make money?
• Do you need money?
To answer this, let’s explore answers to these 4
supporting questions

6. Is the Market Right?
 Answer these questions about your target market:
 How large is the target market? (#customers, $ spent, units
purchased)
 How easily can you find potential customers?
 How big is the pain felt by the customer?
 Is there a clear and compelling message?

7. Is the Industry Right?
 Answer these questions about your industry:
 Who is the competition?
◦ Direct
◦ Substitute (e.g., pen and paper for electronic note taker)
 How do you compare?
◦ Unique product?
◦ New market for existing product?
◦ New delivery mechanism for existing product?
◦ See next page for one example of how to show this

8. Is the Industry Right?
Prod
Quality
Mfg. Channels Mgmt. Tech Di-
versi-
fica-
tion
Mkt
Share
Culture
You 10 10 2 3 9 2 1 9
Competitor
#1
5 8 9 8 2 8 7 3
Competitor
#2
10 1 1 6 9 1 4 1
Competitor
#3
unkn unkn unkn unkn 8 unkn unkn unkn
Competitor
#4
2 unkn 4 unkn unkn 7 7 unkn

9. Will You Make Money?
 Two basic types of companies
 Requires modeling of finances
◦ Based on myriad assumptions
 Only three ways to grow revenue
 Life style
◦ #1 Goal: Income
 High growth
◦ #1 Goal: Growth

10. Will You Make Money?
 Two basic types of companies
 Requires modeling of finances
◦ Based on myriad assumptions
 Only three ways to grow revenue
Predict
Financial
Outcome
“Modeling”
You make a
bunch of
assumptions
Pro forma
financial
statements

11. Will You Make Money?
 Two basic types of companies
 Requires modeling of finances
◦ Based on myriad assumptions
 Only three ways to grow revenue
 What products
 Prices
 How many sold & when
 Cost of goods sold
 Employees
 Expenses

12. Will You Make Money?
 Two basic types of companies
 Requires modeling of finances
◦ Based on myriad assumptions
 Only three ways to grow revenue
 “Pay” for new customers
 Referrals (“viral”)
 Get existing customers to
buy more by increasing
AOS, periodicity, and
retention (“sticky”)

13. Will You Make Money?
 Two basic types of companies
 Requires modeling of finances
◦ Based on myriad assumptions
 Only three ways to grow revenue
 Life style
◦ #1 Goal: Income
 High growth
◦ #1 Goal: Growth
 What products
 Prices
 How many sold & when
 Cost of goods sold
 Employees
 Expenses
 “Pay” for new customers
 Referrals (“viral”)
 Get existing customers to
buy more by increasing
AOS, periodicity, and
retention (“sticky”)
Let’s see if your company will make money.
First let’s look at a life style using Offtoa.

14. Life Style Company
 Along left side are all the business assumptions

15. Life Style Company
 Let’s examine some of the business assumptions
Let’s press Products to see what
products this company sells

16. Life Style Company
 Let’s examine some of the business assumptions
This company sells sandwiches

17. Life Style Company
 Let’s examine some of the business assumptions
Let’s press Pricing

18. Life Style Company
 Let’s examine some of the business assumptions
And here are the prices

19. Life Style Company
 Let’s examine some of the business assumptions
Finally, let’s look at how many
we expect to sell

20. Life Style Company
 Let’s examine some of the business assumptions
And here are the expected unit sales

21. Life Style Company
 Now let’s look at the financial reports produced by Offtoa

22. Life Style Company
 Now let’s look at the financial reports produced by Offtoa
Let’s start with by pressing Income
Statement

23. Life Style Company
 Now let’s look at the financial reports produced by Offtoa
Here’s the Income Statement,
plus you can press the Analysis
Findings button at the bottom
and get a detailed “investor
hat” analysis of the income
statement.

24. Outline for the Workshop
 How to validate your idea?
◦ Is the market right?
◦ Is the industry right?
◦ Will you make money?
◦ Do you need money?
 How to convince others?
◦ Who are these investors?
◦ What do they expect?
◦ How to get ready for them?
Now let’s look at a high growth company using Offtoa.

25. High Growth Company
 This is a SaaS company.
Let’s go right to the Cash Flow
Statement to see if it needs
cash.
We can clearly see that we
will need over $500K to stay
alive through the first two
years.

26. High Growth Company
 This is a SaaS company.
Let’s press Investments to plan
for a $600K investment round
and see what happens

27. High Growth Company
 This is a SaaS company.
Currently we have no
investments (others than the
founders’ round), so let’s create
one.
Press to create
a new
investment
round

28. High Growth Company
 This is a SaaS company.
We created an investment
round of $600K at $1/share.
Now let’s look again at the cash
flow statement.

29. High Growth Company
 This is a SaaS company.
As you can see, the cash
problem has been fixed.
But are we happy with equity
distribution? Let’s press the
Cap Table button and see.

30. High Growth Company
 This is a SaaS company. As you can see, the $600K
investment sold 35.3% of the
company. Only you can decide
if that is acceptable.

31. Summary
 That gives you an idea of
◦ Some of the features of Offtoa
◦ How you can use Offtoa to validate your business idea
◦ How Offtoa can generate your financials for you from your business
assumptions