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Communication Tools for Entrepreneurs: How to make your idea credible and understandable

This lecture presents tips, examples, techniques, tools and a process for building the five essential communication documents for entrepreneurs including:

* The Elevator Pitch
* Executive Summary
* Company Presentation
* Technical White Paper
* Business Plan

Learn how to create these communication tools and how to use them effectively to grow your business from an idea to a funded business plan.

Part of the CIBC Presents Entrepreneurship 101 lecture series:

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Communication Tools for Entrepreneurs: How to make your idea credible and understandable

  1. 1.  Follow or Tweet: #ent101
  2. 2. Why do we need the tools? Solicit Communicate investment to partners Communicate Communicate to employees B-plan to customers Exec Summary PPT Deck White paper Slide 2
  3. 3. Communication tools: how to make your idea credible and understandable   Investors must understand what you do and who cares Focused Company Clear Investment & Strong Management Message Opportunity Slide 3
  4. 4. Guest Speaker 1 1:32-2.28
  5. 5. How do the tools work?   The tools EXPLAIN and ILLUSTRATE:   What is unique about your business?   Who cares?   How will you execute? DIFFERENTIATED SUSTAINABLE VALUE PROPOSITION Slide 3
  6. 6. Selling vs. Planning VS. Slide 6
  7. 7. Principles for Business Planning and Communication No hype. Let investors become enthusiastic on his/her own FACTUAL Business planning is an iterative and adaptive process DYNAMIC VISUALLY A clear, precise structure is a courtesy to those investing COMPELLING their time in reading the proposal CONSISTENT, The storyline and all the facts presented must fit together CONCISE, CLEAR and generate a well rounded impression Acknowledge style, recognize knowledge gaps and biases AUDIENCE-CENTRIC Those who allocate investment resources rarely are EASE OF technical experts for the technology used in the proposal UNDERSTANDING Slide 7
  8. 8. YOU are the most important communication tool   Guest Speaker 2: David S. Rose, an Inc. 500 CEO and serial entrepreneur himself, who has been described by Crain’s New York Business as “the father of angel investing in New York”, and by Red Herring Magazine as the “patriarch of Silicon Alley”. v=lzDBrMisLm0&feature=related (from 1:36-5:02)
  9. 9. Make your message memorable   ENGAGE your audience   Make information meaningful to them   Case studies   Address knowledge gaps   Visuals, charts, graphs   Let them arrive at their own conclusions   Pace your delivery Slide 8
  10. 10. % of Advertising Online Example Total US Advertising $295 B Local $95 B National $200 B Privacy technology 2008 to close the $5B 11% 5% Local National $15B Gap 2014 $15B 25% Expanded Market for Ad Networks 12% New Revenue for ISPs Local National Source: eMarketer 2008
  11. 11. Know your audience   Speak to your audience in language that they understand:   Institutional investor – do not speak ‘techie’, tie everything back to money   Strategic investor – may be more technical; will be interested in your ideas as they impact their business   Strategic Partner – mix of technical and business; understand how a relationship will be mutually profitable to both parties   Angel Investors - access their background; understand their interests   Customer – understand their industry and pain points Slide 11
  12. 12. Social media tools   Create an engaging conversation with bloggers and customers   Let peers, partners, journalists and investors “discover” your story through the social web   Show what you do through images, video, links; make it easy to find through SEO;   Many access points: LinkedIn Group, Twitter stream, YouTube, Flickr Gallery, Wikipedia
  13. 13. Example v=nkuOuxRD1Bc 2:47 – 4:22
  14. 14. Example: Total Addressable Market $15B Local Gap Online Represents 2014 $7.5B expanded market for Ad Networks $6B new revenue for ISPs Local Ads $100B $1.5 Billion for our enabling technology Total US market for our enabling technology $1,600 $1,200 Millions $800 $400 $0 2009 2010 2011 2012 2013 2014 Source: Based on eMarketer 2008 data
  15. 15. Example: Accessible Message Opportunity XYZ Inc. medical device startup, is based on the premise that image guidance will be a key element in the successful deployment of emerging minimally invasive therapies over the next decade. Product and Benefits By providing 3D imaging at low cost, we aim to make the procedures of the 21st century safer, faster and cheaper with better success rates, fewer complications and shorter hospital stays. Slide 15
  16. 16. Communication tools help you build relationships   Be strategic about what you provide and when you provide it   Not everyone should see your white paper or business plan   Leave some details for later, don’t give away everything in the first meeting   Your documentation should radiate professionalism   Ensure accurate grammar, spelling, diction, illustration, layout, etc. Slide 16
  17. 17. Myths and Truths Choose what You only have MYTHS… TRUTHS… tools to use and 30 seconds to with whom get an investor’s Should entice attention the investor into You should start asking for more by building your Building your business plan communication Have all your toolkit is an tools ready to iterative process deploy Slide 17
  18. 18. The Tools You Need to Raise Money articles/Investor-engagement-The-tools-you-need- to-raise-money The Tools Slide 18
  19. 19. The Elevator Pitch Slide 19
  20. 20. The Elevator Pitch   What:   A 30 second overview of your business concept   Why:   To get a follow–on meeting   When:   In a cold call to an investor, customer, potential partner, etc.   Good for networking at trade shows, business functions, etc.   Dos and Don’ts:   Do not spend forever practicing and refining this – should come naturally;   Figure out a few key messages you would like to get across to use as a loose script   Distribute key messages to outward facing employees – standardize message Slide 20
  21. 21. The Elevator Pitch ABC Inc. is a location-based advertising PAIN POINT company focused on bringing A need for… hyper local targeting to any website. Through a unique privacy architecture, Inc's technology allows media companies and advertising agencies to accurately VALUE reach the most relevant and responsive PROPOSITION Allow one to… demographics online. Slide 21
  22. 22. The Executive Summary articles/Investor-engagement-The-executive- summary.html The Executive Summary Template articles/Investor-engagement-Executive-summary- template The Executive Summary Slide 22
  23. 23. The Executive Summary   What:   3-5 page summary of your technology, product, sales plan, revenue path and financial requirements   Why:   A ‘teaser’ document meant to generate a request for more information or a meeting   Readers will want to get their head around the concepts quickly   When:   When you have a ‘warm’ intro or an invitation to contact someone   Integral first interaction with an investor   Rides the line between confidential and non-confidential – some degree of trust   Dos and Don’ts:   Has to have the right emphasis given the maturity of the business concept   Keep it current Slide 23
  24. 24. The Whitepaper Slide 24
  25. 25. The Whitepaper   What:   A fairly concise layman’s summary of your technology, product(s), the uniqueness of the technology and products and the value proposition   Why:   Helps investors to understand how a concept or technology works   When:   After investors are curious about details or have bought into the big picture business vision   Dos and Don’ts:   Put the whitepaper on your website   Don’t go so deep as to give away all of your trade secrets/IP – consult your IP professional   Keep it as short as possible and fully explain all acronyms Slide 25
  26. 26. Elements of a Pitch Deck engagement-Elements-of-a-pitch-deck Building a Strong Presentation engagement--Building-a-strong-presentation.html The PowerPoint Slide 26
  27. 27. The PowerPoint   What:   A ~15 slide outline of the key aspects of your business plan   Why:   Provides an overview of the business plan in point form   Allows people to absorb a lot of key information in a short period of time   When:   Usually the second piece of information an investor receives after the executive summary   Investors love these because they can flip through them very fast and get highlights   Dos and Don’ts:   Critical document in the fundraising process – present a sound story; make it look good   Practice speaking to it, preferably in front of friendly people who will ask lots of questions   Use graphics as much as possible Slide 27
  28. 28. The Business Plan articles/Investor-engagement-The-business- plan.html The Business Plan Template articles/Investor-Engagement-Business-Plan- Template Business Plans for SE and SPBs articles/Business-plans-for-SEs-and-SPBs The Business Plan Slide 28
  29. 29. The Business Plan   What:   A rigorously prepared and executable description of how you will build your business   Why:   This is your roadmap for how you are going to build your business   Describes roles and responsibilities for building various aspects of the business   When:   When you have assembled enough solid information to write it   Highly proprietary; later stages of diligence   Wait for the investor to to ask for it   Dos and Don’ts:   Often made a condition of financing or a board action item   Re-write with every major change in strategic direction   Avoid the temptation to turn this into a sales tool – preserve its integrity as an execution plan Slide 29
  30. 30. How to create your toolkit?   Do not start by building your business plan   You will not have the information you need   You will examine issues out of priority   You will expose lack of understanding   Use the PowerPoint Deck as receptacle for all ideas and information that comes to light – easy to manipulate, organize and adapt   Build your executive summary and eventually your business plan based on your PowerPoint deck   Give investors your exec summary and offer to walk them through the PowerPoint slides in person or on the phone   Develop visual assets (diagrams, videos) to use on-line and in your pitch deck Slide 30
  31. 31. Advice from the Trenches   Practice, Practice, Practice   Different versions for different people   Management vs. finance vs. technical   Version control   The main idea of all of this is to entice investors/ partners to take a deeper look Slide 31
  32. 32. Advice from the Trenches   Do not overload the documentation   Try to get across a few key messages instead of telling the whole story   Your audience will only absorb the key messages   Templates exist for all of these documents   Don’t re-invent the wheel   MaRS has developed templates based on extensive review of industry best practice materials Slide 32
  33. 33. Building Your Message Idea# 1: “Don’t Dive Straight into the Technology” (Value Proposition)   Don’t start with technology. Everyone has this. Instead create context.   Understand your customer’s pain points and show them how you offer a value proposition that is FASTER, CHEAPER, BETTER Idea #2: Maintain A Degree of Focus & Consistency in your Message (Brand)   Focus on just a few of the really good things you can do and lead with these points. Idea #3: “Personify your People” (Profiles)   Profile Managers Backgrounds - Creates context for potential clients and investors. Idea #4: “Provide Proof of Results” (Case Studies)   Tell a story. Focus on Results and the overall customer experience. Use testimonials.
  34. 34. Outline   Executive Summary   Company & Opportunity Summary   Product & Technology   Market Size and Growth   Sales and Marketing Plan   Competitive Overview   Operations Plan   Management Team   Financials & Investment Requirements Business Plan Slide 34
  35. 35. Outline   Company Description (1 paragraph)   Company Overview, Management & Vision (2-3 slides)   Need & Existing Solutions (1-2 slides)   Technology, Products and Product Rollout (2-3 slides)   Market Opportunity (1 Slide ,Graphical)   Competitive Overview (1 Slide , Largely Graphical)   Sales Strategy & Channels (2-3 slides)   Partnerships and/or Partnerships strategy ( 1 slide)   Financials & Path to Liquidity (2-3 Slides (Largely Graphical) PowerPoint/Investor Deck Slide 35
  36. 36. Outline   Company Description (1 paragraph)   Basic Need & Company Solution (1 paragraph)   Technology and Product(s) (1 paragraph; diagram)   Value Proposition (couple of bullets)   Market Size and Growth (diagram)   Sales Plan (1 paragraph)   Competitive Advantages (couple of bullets)   Management (detailed bullets)   Revenue Growth Projections (diagram)   Financing Requirements (1 paragraph) Executive Summary Slide 36
  37. 37. 4:58-6.24 Be Yourself and Have Fun
  38. 38. Veronika Litinski Advisor, MaRS Discovery District T 416-673-8113 E W