View
912
Download
3
Tags:
Embed Size (px)
DESCRIPTION
The Investor Pitch
Citation preview
KYODO Consulting Group
The Investor Pitch
Presented by: Young Kwon
Date: 4/30/2014
2
Investment Paradox
Entrepreneurs
Getting to
Yes
Investor
Getting to
NO
3
Want different
Capacity Has funds
to invest
Successful Track record
Compatible Match of size/stage Geography
Friendly No directly competitive investment
Strategic Relevant
portfolio
The Right
Investor
Team Skills &
Track record
Platform Significant
Technological advantage
Market Sizable and
Addressable
Traction Early
customer
IP& Biz Model
Entry Barriers
The Right
Investment
Entrepreneurs want…. Investors want….
3 Levels of Engagement
Emotional Rational Financial
7 Signs the investor
Signs
the investor
is just not
that into you :-(
7 Signs the investor
1 “I still don’t know
what you do”
7 Signs the investor
2 “Isn’t your product a
nice to have vs.
A real market need?”
7 Signs the investor
3 “Is your market really
big enough?”
7 Signs the investor
4 “I still don’t understand
how you make money”
7 Signs the investor
5 “Are you underestimating
your go-to-market costs?”
7 Signs the investor
6 “Couldn’t your
competitors copy you?”
7 Signs the investor
7 “Do you have the right
players on your team?”
Pitch principles
Connecting on an emotional, rational financial level
Storify
Create a well paced, logical narrative.. think storyboard
Disnify
Use visuals – frameworks, graphics and image.. But only
where they make sense… you are not keynoting a TED talk
Personify
Relate to the team’s personal experiences… investors are
in the people business
Simplify
Avoid too much detail, overused buzzwords and jargon
getting a term sheet after first meeting is not the goal
Quantify
Show how you make money for the investor. Show key metrics
Verify
Can you finish this sentence? As evidenced by … Back up
your claims wherever you can with visible proof
Components of the Investor Pitch
#1 Real
Problem
#3 Attractive
Market
#2 Unique
Advantage
#4 Compelling
Investment
Pacing your investor pitch
#1 #2 #3 #4
Start End
Real
Problem
Attractive
Market
Unique
Advantage
Compelling
Investment
3 min 4-5 min 4-5 min 3 min
*Note : Elapsed times are guidelines only
Answering the “So what?”
Focusing a Problem that Matters
No. 1
Real
Problem
Creating Impact
The Company & It’s Solution - Elevator Style
Core Value Proposition : Use a single sentence
Unique Benefit : Focus on one single aspect of
what you do(aka…. “The Big Idea”)
Metaphors : Try to create a cognitive connecting to
something people understand i.e. metaphor
“Cover = Uber for restaurants or Rent Frock
Repeat = Zipcar for Designer Fashion”
Emotion: Create a visceral response
(why are things still done this way?) Be provocative…
Nice to have’s aren’t investable
Start Min 3
Introduction
Key Message : We’re fixing the insanity of the status quo
Defining the Problem
Paint a picture of who has this pain
Current State : Show the insanity of how customers
address the issue today
Historical Evolution : What’s changed in the
customer’s mindset
Personas : Describe the main players in your
markets you address
Pictures : Every pictures tells a story
Start Min 3
Introduction
Key Message : We’re solving real pain… not “nice to haves”
Problem
Your solution to the Rescue
Describe WHAT you do and HOW you do it
Product : What is it
(screen shots, product photos)
Functionality : The Who + Do
Benefit : High level value
Category : Where do you paly? Start Min 3
Introduction
Key Message : Our solution is novel and easy to understand
Traction
Solution
Problem
Stage : What is the readiness of the solution?
What’s been Achieved to Data?
Show your ability to succeed : On lots of sweat… little $
Founded (year)
Employees offices
Advisors
Product Release(s)
Beta Users/Unique views/Registrations
Paying Customers
Partners (Technology/Channel)
Certification/Industry awards
Media Coverage
Patents
Start Min 3
Introduction
Key Message : Our team is committed and can execute
Traction
Solution
Problem
Creating Impact
The Company & It’s Solution - Elevator Style
Core Value Proposition : Use a single sentence
Unique Benefit : Focus on one single aspect of
what you do(aka…. “The Big Idea”)
Metaphors : Try to create a cognitive connecting to
something people understand i.e. metaphor
“Cover = Uber for restaurants or Rent Frock
Repeat = Zipcar for Designer Fashion”
Emotion: Create a visceral response
(why are things still done this way?) Be provocative…
Nice to have’s aren’t investable
Start Min 3
Introduction
Key Message : We’re fixing the insanity of the status quo
Pacing your investor pitch
#1 #2 #3 #4
Start End
Real
Problem
Attractive
Market
Unique
Advantage
Compelling
Investment
3 min 4-5 min 4-5 min 3 min
*Note : Elapsed times are guidelines only
Opportunity Awaits
Lots of Room in the markets to scale a Business
No. 2
Attractive
Market
Sizeable Market Opportunity
It’s very Big…. And you can get To IT
Size : What’s being spent today on problem? Build
from ground up. Can the market support multiple players?
Addressability: What’s the reasonable market you
can serve?
Segments : Going Niche or broad? Global : identify other markets Proof : Use 3rd party analyst reports
Thought Leadership : Are you using primary research to gain insight? Charts : Keep it visual and engaging
Min 3 Min 10
Market Size
Key Message : We have unique insight into the market
Early Customers/Prospects
Nothing really matters till somebody buys something
Status : Closed vs. Prospects and paid vs. Free Trail
Categorize : Key segments etc
Contextualize : Why they bought
Evangelists : Customers quotes to validate market
pain and size
Min 3 Min 10
Market Size
Key Message : We have buyers who must have our solution
Customers
Personas : Describe customers characteristics
Logos : Categorize… Avoid “logo soup”
Making Money
Where does the growth and profit come from?
Key Metrics: Pricing, Avg. Deal Size
Registrations/Subs., Churn
Note : Costs to Acquire is perhaps the most
overlooked and important metric
Competitive Scenarios: Is your model sustainable
if competitors start stealing share?
Have you factored in potential of downward price
pressure over time?
Min 3 Min 10
Market Size
Key Message : We have validated our revenue model and can
demonstrate how it will allow us to scale the business
Customers
Revenue
model
Channels : What are the downstream costs to sell
and service the customers(is this built in?)
Registrations/Subs., Churn
Acquiring Customers
What’s your go-to-market strategy?
Visibility : Critical to success.. What’s your story?
Lead Generation Programs : What marketing
approaches will you use(stay high level – categorize)
Min 3 Min 10
Market Size
Key Message : We have validated our revenue model and can
demonstrate how it will allow us to scale the business
Customers
Revenue
model Sales Model : Direct vs. Channel (Do you have
partners? Have you built a wave for channels to ride?)
Marketing
& Sales
Systems : Do you have an infrastructure to scale
(CRM/Inbound Mktg. Platforms etc.)
Testing : Do you have cap
ability to test value prop./offers?
Stages : Do you have the ability to pivot from launch
to growth to maturity
Pacing your investor pitch
#1 #2 #3 #4
Start End
Real
Problem
Attractive
Market
Unique
Advantage
Compelling
Investment
3 min 4-5 min 4-5 min 3 min
*Note : Elapsed times are guidelines only
Opportunity Awaits
Many of the essential pieces are in place
No. 3
Unique
Advantage
Partners
Show how you can punch above your weight
Role : What value with they add to your solution
Research/Development/Sales/Support etc.
Reputation: Do you have the right players
in the market you are serving?
Category Fit : Do they have sufficient market power? Executive Sponsorship : Do you have buy in from Key people inside the channel? Incentives : Is the partner aligned financially to support you?
Longer Term : Is there competitive threat or potential M&A?
Min 6 Min 10
Partners
Key Message : Important market players buy into our vision and
want to work with us
Competition: Technolgy/Leadership
Creating barriers to entry
Technology : Validate how you are different?
How much market lead do you have? What degree
of leverage and scale do they create?
Process : Are there unique process elements of
how your technology works?
Patents : What is the focus of the patent and what
stage are you at? (provisional filling, patent granted)
Not a bad idea to mention any name brand attorneys
you work with)
Min 6 Min 10
Partners
Key Message : We’ve nailed a problem that is hard to solve.
It will be hard for competitors to catch up
Competition
Technology/Leadership
Licenses : Are there 3rd party components of your
Solution that are licensed? Do you have an exclusive
right to the technology?
Team & Advisory
The capabilities to execute on the plan?
Company Background: List experience in terms of
key companies each team member worked for
list “pedigrees” (notable exits)
Achievement : Focus on a key aspect of their
experience that uniquely qualifies them for the venture Min 6 Min 10
Partners
Key Message : We have assembled the right mix of people who
understand our target customers and the dynamics of the
marketplace. We have “know how” and “know who”
Technology
/Leadership
Team &
Advisors Planned Hires : Speak briefly to what primary role they
will play in the venture
New Hires : Where applicable, speak to any key people
you may be hiring to build out the team
Acquiring Customers
What’s your go-to-market strategy?
Visibility : Critical to success.. What’s your story?
Lead Generation Programs : What marketing
approaches will you use(stay high level – categorize)
Min 3 Min 10
Market Size
Key Message : We have validated our revenue model and can
demonstrate how it will allow us to scale the business
Customers
Revenue
model Sales Model : Direct vs. Channel (Do you have
partners? Have you built a wave for channels to ride?)
Marketing
& Sales
Systems : Do you have an infrastructure to scale
(CRM/Inbound Mktg. Platforms etc.)
Testing : Do you have cap
ability to test value prop./offers?
Stages : Do you have the ability to pivot from launch
to growth to maturity
Competition Example
We have everything that the market leaders are not:
Simple, Fast, Easy, Secure, Addictive, FREE.
Personal and Biz
Drag and Drop
Bank Feeds
Easy Set-up
Free
Multiple Business
Invoicing
Cloud Based
Collaborative
Intuitive interface
YOU Comp 1 Comp 2 Comp 3 Comp 4
Team Example
A Team of experts
Chris Bryson, CEO
Aeroplan, Warrillow &Co.
Marc Faucher, COO
Blackberry partners fund
Amr Hiram, VP IT
SAP, Red Iron
Diego Maniloff, Lead Data
Scientist MIT
Pacing your investor pitch
#1 #2 #3 #4
Start End
Real
Problem
Attractive
Market
Unique
Advantage
Compelling
Investment
3 min 4-5 min 4-5 min 3 min
*Note : Elapsed times are guidelines only
Opportunity Awaits
Many of the essential pieces are in place
No. 4
Compelling
Investment
How you will Make Money
Key Metrics that Explain the Bottom Line for Investors
Key Numbers : Revenues, Expense, EBITA
Customers, Headcount
Burn Rate: What is the net cash out month
Assumptions : Be prepared to defend them Scenarios : Be able to speak to impact of various scenarios (i.e Cost of acquisition is x % higher than forecast or lack of conversion from free to premium)
Min 10 End
Financials
Key Message : Our venture clearly offers a superior return for
our investors.
The Ask
Value & Deal Structure/Term & Use of Funds
Investment Structure/Terms: Type of instrument
(Convertible Debt, Equity) and what are the terms
of the deal
Amount : What’s been raised and what is left in the
round? Use of Proceeds : What milestones will you
achieves(with the investors money)
Min 10 End
Financials
Key Message : Our structure and terms should meet you
investment criteria
Offer Details
Runway : What amount of time does the current
money buy (can you hit breakeven or is new round
required?)
Pipeline : Be prepared to speak to who is committed
so far and who are you approaching.
You must show momentum – ‘herd dynamics.”
Valuation : Be careful about “premature” discussions
discussions regarding pre-money value-don’t price
from the podium!
The Ask
Value & Deal Structure/Term & Use of Funds
Investment Structure/Terms: Type of instrument
(Convertible Debt, Equity) and what are the terms
of the deal
Amount : What’s been raised and what is left in the
round? Use of Proceeds : What milestones will you
achieves(with the investors money)
Min 10 End
Financials
Key Message : Our structure and terms should meet you
investment criteria
Offer Details
Runway : What amount of time does the current
money buy (can you hit breakeven or is new round
required?)
Pipeline : Be prepared to speak to who is committed
so far and who are you approaching.
You must show momentum – ‘herd dynamics.”
Valuation : Be careful about “premature” discussions
discussions regarding pre-money value-don’t price
from the podium!
A Recap : The 4 Components of the Pitch
#1 Real
Problem
#3 Attractive
Market
#2 Unique
Advantage
#4 Compelling
Investment
In the End…. The Investment is in You
A dozen attributes smart investors' look for in startup teams
1. Honesty
2. Vision
3. Resourcefulness
4. Logic
5. Drive
6. Humility
7. Leadership
8. Critical Thinking
9. Commitment
10. Patience
11. Credibility
12. Agility
Gives straight answers to investor questions
Demonstrates customers insight/though leadership
Can make an investor’s dollar go far
Makes wise, pragmatic decisions quickly
Genuine passion for early stage & ability to excite
Coachable an seeks help to address weak spots
Has the ability to attract and lead a winning team
Challenges assumptions and spots the false ‘+s
Not just involved – sweat & or capital invested
Tolerance to the ambiguity of innovation
Well research. Uses data to back assumptions
Decisive. Cuts losses & pivots at the right time
7 Signs the investor
1. 쉽고 명확한 설명 최대한 간결, 명확하게
2. 구성원의 역량을 어필 조직, 구성원의 경험, 활동들
3. 회사의 비전
단계별 운영방안
4. 경쟁사와의 차이점 부각
차이점, 당사의 비즈니스가 특별한 점
5. 하나의 틈새 시장 공략
모든 분야가 아닌 틈새 시장 집중 초기 포지셔닝
6. 재무제표에 대한 이해
돈, 시간, 조직운영에 대한 방향
7. 명확한 이점 and 한계점 여러분의 비즈니스가 왜 중요하기 그것이 시장에 어떤 이점을 주는지 현재 부족한 점 향후 어떻게 극복해 나갈 것인지 설명