Building Your Venture Capital Pitch

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This is a presentation that I have given to over 750 Canadian and European companies over the years on how to build their Venture Capital Pitch before they actually meet with potential investors.

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Building Your Venture Capital Pitch

  1. 1. Building YourVenture Capital Pitch Stephen N. Davis “Partnering With Clients to Drive Sustainable Profitable Growth”
  2. 2. Guidelines  Goal of the first meeting is to get the second meeting • Increase receptivity and find your champion  Focus • Value proposition – not technology • No more than 12 – 15 slides  Personalize the story • To fit the potential VC partner’s investment criteria and focus  Efficient use of time – You have 15 minutes  YOU are the real story • Don’t hide behind slides – don’t just read them • Don’t overload slides with text • Recommend black text on white background  Order of slides will depend on your situation • Order for most compelling story  CEO or Founder gives the presentation2000 - 2011 © CXO Advisory Group
  3. 3. The Slide Titles  Title Slide  Overview  The Problem – What’s the Pain?  The Solution – Your Value Proposition  Technology – Your Secret Sauce  Opportunity and Market  Competitive Landscape  Go to Market Strategy  Financial Overview  Funding Needs and Uses  The Management Team  Current Status  Summary2000 - 2011 © CXO Advisory Group
  4. 4. Title Slide - Content  Name of your firm  Date  Appropriate graphics (logo, etc.)2000 - 2011 © CXO Advisory Group
  5. 5. During the title slide…  Begin by introducing yourself and the team • Names and titles only • Save team detail for later  Recommended: • Hook ‘em - Start with a 1 to 2 compelling minute story • Make it compelling and memorable • Tie the story to your overall message  PRACTICE, PRACTICE, PRACTICE!!!2000 - 2011 © CXO Advisory Group
  6. 6. Overview  This is where you use your elevator pitch. • Elevator pitch is one of your most important elements • This is the essence of your business • You have 10 to 20 seconds to grab their attention • Then 20 to 40 seconds to expand the Business Value Proposition • Most entrepreneurs don’t spend enough time developing their pitch • Two to five high level bullets • Go into more detail later • Refer to key points to keep attention for the rest of the presentation  You’ve got to get their attention here or your lost2000 - 2011 © CXO Advisory Group
  7. 7. The Elevator Pitch  Forces you to focus  Cover these Points • What market are you in? • The customer pain you are solving? • What is the size of the opportunity? • Why you’ll win? • Market validation  Show passion and enthusiasm • You’re NOT Speedy Gonzales  30 to 60 seconds  Don’t use jargon  Use powerful analogies to help them “get it”  Make sure your mother can understand it in less than 15 seconds2000 - 2011 © CXO Advisory Group
  8. 8. It Takes a Long Time to Write Something Short  24 hours minimum – 4 months maximum • 8 hours to develop prioritized list • Problems you’re solving • What you’re offering • What makes you different from competition • Why you’ll win • 4 hours to write first draft • 4 hours testing your first draft with key individuals, advisors, etc. and incorporating feedback • 6 hours testing revised draft on larger group • 2 hours to revise and incorporate feedback  But this isn’t the end  You’ll eventually have multiple elevator pitches for various audiences • Investors, different customer types, strategic partners, etc.2000 - 2011 © CXO Advisory Group
  9. 9. Example We provide a flexible, interactive and personalized system for delivery of medical test results from a dedicated, comprehensive content library. We streamline the reporting of clinical lab test results from the physician to the patient in language that patient’s can easily understand.2000 - 2011 © CXO Advisory Group
  10. 10. The Problem: What’s the Pain?  Compelling problem(s) you address • What’s the pain and who is suffering? • revenues, costs, time, market reach • Emphasize the inability of existing methods, procedures, competitors to satisfy need  Include validating quotes from • Customers or Analysts to validate pain  Problem must suggest a large market • Suggest market opportunity size • ie: specific cost of problem to the market2000 - 2011 © CXO Advisory Group
  11. 11. The Solution – Your Value Proposition  Describe your business, product or service in terms of compelling benefits • “Must-haves” not “nice-to-haves” • Cost saving, time savings, personnel savings, process improvements, etc. • Illustrate your solution graphically if possible – Make it simple  Include quotes from customers using product • Validate business value proposition  Add a slide or two, if necessary to show solution and where it fits • Focus on the value proposition • Explain the technology • Don’t go overboard on technology2000 - 2011 © CXO Advisory Group
  12. 12. Technology – Your Secret Sauce  Concentrate on essential value proposition!!  Best to use graphics • Before and after diagrams often work well  Translate key points from business to technical domain • Show how it fits into customer operation  Patent Status2000 - 2011 © CXO Advisory Group
  13. 13. Opportunity and Market  Market details • Define ideal target customer • Who decides? Who pays? • Use specific example if possible • Size and growth rate for five years • Validated sources • Focus on your segment(s) of the target market • Market challenges  Does it justify a $50M to $100M+ run rate opportunity in five years?  Demonstrate defensible % of market share • How will you get there? Can you get there? • Typical sales cycle that will justify ramp up2000 - 2011 © CXO Advisory Group
  14. 14. Competitive Landscape  Discuss current and potential competitors • Focus on top 3 competitors and why you will win • Demonstrate knowledge of market and operational landscape • “no competition” an unacceptable answer • SWOT table works well here  Differentiate yourself • Use customer-centric attributes and dimensions • Reinforce your unique competitive advantages • Differentiators that would compel customers to buy from you • Relationships, intellectual property, new insights, domain expertise  Customer Quotes • What do they say about your competitors? • Why would they rather buy from you? • What do they say about your competitive advantage?2000 - 2011 © CXO Advisory Group
  15. 15. Go to Market Strategy  Who are the key players? • Profile the customer • Discuss critical sales and strategic partner relationships • In place or in process  Revenue Model • How and what do customers buy? • Discuss high level pricing • Describe what the customer will get –Typical sale  Marketing and sales plan • Explain sales cycle and how you acquire customers • Compare and contrast to other firms • Sales channel strategy – who will sell? • Cost to acquire customer and sales channel partners  Current customers and sales pipeline • Customer quotes can provide external validation2000 - 2011 © CXO Advisory Group
  16. 16. Financial Overview (in thousands) 2005 2006 2007 2008 2009 Revenues ($K) $500 $2,325 $7,000 $24,000 $60,000 Expenses ($K) $2,250 $5,000 $10,000 $22,000 $49,000 EBITDA ($K) ($1,750) ($2,675) ($3,000) $2,000 $11,000 Breakeven Q3 2008 Customers 1 5 35 150 275  Be prepared to discuss and key financial assumptions • Should be forecast based on receiving funding • Revenue analysis – market ramp up, pipeline • Bottom up better than top down • Expenses  Have detailed proforma backup2000 - 2011 © CXO Advisory Group
  17. 17. Funding Needs and Uses  This is where you tell them • How much you need • What you will use the funds for  Example: Series A: $5,000,000 • Hire CEO, VP Sales & Marketing, CFO – Fill gaps in management team • Launch product into the market • Bring on additional sales, marketing & engineering resources • Develop initial key referral accounts • Expand number of field test sites • Develop initial OEM channels • Continued Engineering • Build support organization • Additional patent protection  Example: Series B: $5 Million in 12 to 18 months • Expand marketing & sales nationwide • Promote company & its products for maximum visibility • Start development of international markets • Introduce follow on products2000 - 2011 © CXO Advisory Group
  18. 18. The Management Team  Purpose to build confidence • On one slide only • That team can build and manage the business • Previous relevant accomplishments that can grow the business • Expose skill experience gap • Discuss your hiring plan to fill key slots  Provide list of key advisors or members on BOD • Only if they add substantial weight or credibility • Can be on separate slide  If you’re not qualified to be CEO • Be honest with yourself • Turn it into positive • State that you want to bring someone in with when funding is completed2000 - 2011 © CXO Advisory Group
  19. 19. Current Status  How much money have you previously raised • Sources of funding  What have you already accomplished with other investors’ money? • Key milestones • Product completion, first sales, patent pending • Key customers, Strategic relationships • Logos and testimonials  Timeline format can be useful  Show you are in position for some key future milestones • What are they?2000 - 2011 © CXO Advisory Group
  20. 20. Your Summary  Your call to action  Summarize your strongest points • Why you’re different & why you’ll win • Memorable sound bites  Anticipate exit strategy question  Ask for feedback • Will highlight there concerns • Show where you need to improve Pitch or rebuild story  Ask about the process  Ask about next step(s) • Determine conditions for second meeting • If possible, set up follow-up meeting  If no interest then • Ask for referral to other funding sources who’s profile you fit2000 - 2011 © CXO Advisory Group
  21. 21. Questions2000 - 2011 © CXO Advisory Group
  22. 22. Contact Information: Stephen Davis Interim COO/VP Sales & Marketing | Business Consultant | Sales Channel and Business Development Expert | Author & Speaker “Partnering With Clients to Drive Sustainable Profitable Growth”Phone: (508) 528-7571Email: sdavis@cxoadvisorygroup.comWebsite: www.cxoadvisorygroup.comLinkedin: www.linkedin.com/in/stephendavisTwitter: twitter.com/stephendaviscxo
  23. 23. Driving Profitable Growth We help companies optimize business development and marketing; accelerate sales; and seize the most attractive growth opportunities.2000 - 2011 © CXO Advisory Group
  24. 24. The CXO Advisory Group  CXO Advisory Group is a strategic operations advisory and management firm comprised of proven C-level executives with both breadth and depth of experience.  CXO Advisory Group Team members have achieved success in positions ranging from: President/CEO to COO, and VPs of Sales, Marketing, Corporate Development and Human Resources.  Has proven success in business development and in building US sales and distribution channels2000 - 2011 © CXO Advisory Group
  25. 25. How Can CXO Help You? Business Strategy Services • Audit business practices and organization • Evaluate product and pricing strategies • Evaluate effectiveness of sales channel • Assess effectiveness of existing sales and marketing programs Market Entry Program • Analyze competitive landscape • Market launch strategy and plan • Channel strategy and programs • Establish sales channels • Generate sales and manage relationships • Identify and develop strategic partnerships2000 - 2011 © CXO Advisory Group
  26. 26. How Can CXO Help You? Sales Channel Management • Review and revise sales channel strategies • Channel partner identification, prospecting and recruitment • Eliminate channel conflict • Channel contract development and negotiation Interim Management Resources • Interim CEO, COO, CMO, CSO • Interim VP of Sales and Marketing • Consultant on staff • Launch team coaches2000 - 2011 © CXO Advisory Group
  27. 27. How Can CXO Help You? Venture Advisory Services • Fine tune operations, business strategy and market entry • Assist with due diligence • Strategic business assessment of portfolio companies2000 - 2011 © CXO Advisory Group
  28. 28. Driving Profitable Growth2000 - 2011 © CXO Advisory Group
  29. 29. Contact Information: Stephen Davis Interim COO/VP Sales & Marketing | Business Consultant | Sales Channel and Business Development Expert | Author & Speaker “Partnering With Clients to Drive Sustainable Profitable Growth”Phone: (508) 528-7571Email: sdavis@cxoadvisorygroup.comWebsite: www.cxoadvisorygroup.comLinkedin: www.linkedin.com/in/stephendavisTwitter: twitter.com/stephendaviscxo

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