Jim Poage
President and CEO
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Pop Quiz
I want to start a new venture because:
a)My invention/discovery will help
mankind.
b)I want to build a company dominant in
the market.
c)I want to get rich.
d)All of the above
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The Elevator Pitch
• Origins in “.com” period
around 2000
• Short pitch which tells
potential investor about the
deal
• Objective is to get an invite
to present the deal
• Could be investors ‘first cut’
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Key Elements
• Early ‘hook’
• Brief description of the product or
service
• Revenue model
• Management team
• Competition
• Competitive advantage
• Call to action
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Coaching Tips
•
•
•
•
•
This is “one-on-one”
Show passion
Show confidence
Minimize hyperbole
It’s a business deal not
an invention
• Google “elevator pitch”
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The Elevator Pitch
• Turn to someone you
don’t know
• Right now:
Most important
person in the world
• 60 second pitch
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Recommended
Documents
(In order of importance)
1. Investor Presentation
2. Elevator Speech
3. Business Plan
4. Executive Summary
5. One Page Summary
6. Customer Brochure
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Recommended
Documents
(Probable Chronology)
1. Elevator Speech
2. Business Plan
3. Investor Presentation
4. Executive Summary
5. One Page Summary
6. Customer Brochure
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Venture Investment 101
What they want to
know
1. What is the technology?
2. How big is the market?
3. Who is on the Management
Team?
4. Is this a good deal?
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Investor Presentation
• Single most important
aspect of fund raising
• Play to your audience
• Be respectful of time
• Business attire
• Objectives:
– Not to close the deal
– Invitation to ‘talk’
– Build investor confidence
in you
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Typical Pitch Timing
• Presentation: 20 minutes
• Q&A: 20 minutes
• Investor discussion: 20 minutes
– You’re not in the room
• BTW: This is a ‘somewhat’ universal
format for angel groups
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Content Elements
•
•
•
•
•
•
The problem?
Product/Service
Value proposition
Market
Competition
Competitive
advantage
• Management team
• Revenue model
– Revenue received
•
•
•
•
Funding request
Uses of funding
Funding milestones
Pre-money cap table
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Content Timing
• Every deal is different
• It’s your message and your deal
• However,
– Management
– Technology
– Market
– Financials
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Coaching Tips
•
•
•
•
Show passion
Show confidence
Demonstrate knowledge
Minimize hyperbole
– Name dropping
• It’s a business deal not an
invention
• Presentation Team members
• Consistent team attire
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More Coaching Tips
• Graphics, color, & photo’s
• No hard to read slides
– 10-20-30 rule
• Do not read the slides
– Watch the audience
•
•
•
•
•
Well choreographed
Numbers all ‘foot’
Copies for audience
“show & tell”
Practice timing
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Q&A Coaching Tips
• Short direct answers
• No ‘piling on’
• Backup slides
– Cheat sheet
• Curve balls
– May be asked for a term sheet
– Avoid technical discussions
– Don’t get defensive or angry
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Après-Presentation
• Do a post mortem on each
presentation given
• Build an inventory of slides
• Be prepared to give many
presentations
• Remember you are only
looking for a few investors
• Expect ‘stay in touch’
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Why a Business Plan?
Business Strategies
Product Development
Sales & Marketing
Financial
Others
Management in sync
(Equity Funding World)
Sell the venture
Due Diligence
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Preliminary Remarks
No proprietary warnings
About 20 pages without exhibits
About 6500 -7500 words
10 or 12 pt Times New Roman
Spellchecker
Flesch-Kincaid Readability <30
Table of Contents and page numbers
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Technology
Detailed description of the
problem
Set up the Value Proposition
What is the solution
5th grader rule
Product Description
FeatureFunctionBenefit
Intellectual Property
State of Development
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Market
Market Need
Market Size
Competition
Direct & Indirect
Differentiators
Pricing Strategy
Sales Strategy and process
Revenue sources
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Management Team
Who is on the team
Domain Expertise
Entrepreneurial Experience
Board of Advisors
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Attractive Investment
Pro Forma P&L – To Exit (5-7 years)
Assumptions driving the numbers
20X N5
Pro Forma Balance Sheet
Cap table
Funding Request
Pro Forma Cash Flow
The ‘Deal’ and Liquidity Events
Use of Funds
Integrated timeline
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Integrated Timeline ($K)
Development
Alpha
Sales & Mkting
Cash
$20
Investment
$150
$110
Beta
Production
Hire Sales
Sign 1st Distr
$15
$205
1st Sale
Continued Sales
$120
$90
$135
$350
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Cosmetics & Presentation
Lots of graphics and color
Puppies & Kittens
Professional binding with heavy paper
Double sided printing
May want to consider a Marketing
Communications advisor
The objective is make it easy to read
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I Know you can’t Read this but…
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I Know you can’t Read this but…
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Title Options
1. Title is the
TOPIC
2. Title is the answer to the question:
So What?
Sums up the slide
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What really happens
1. Read the first
paragraph
2. Look at the
financials
Is there a ‘hook’?
How much &
20X N5?
$ Revenue line
3. Look at the
Management Team
Can they pull this off?
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Biggest Mistakes by
Entrepreneurs
1. Too much on the technology
2. Too little on the Management Team
3. Failure to abide by the ‘5th grader rule’.
4. Failure to articulate the Value Proposition
5. “There is no competition.”
6. “This assumes only a 1% market penetration.”
7. Too much or too little detail on the Pro Forma
8. Does not state ‘The Deal’
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The Elevator Pitch
• Lets go back
• Turn to the person
that you pitched to
• Tell them one word
(no hints)
• Your name is ______
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Jim Poage
President and
CEO
Startech
210.458.2523
jbp@startech1.org
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