121005 -8-InvestorPrezTemplate

7/28/2019 121005 -8-InvestorPrezTemplate

1/17

Investor Presentation [Date]

ABC Inc.

A Vision for the Future

Investor Presentation

[Date]

This is a sample template of an

Investor Presentation (IP). If

youre looking for funding, you

should have one, because sooner

or later youll have to make a

presentation.


2/17


The Business and Product

The Market and Competition

Strategy Business Drivers and Risks

Management

Financials Funding Requirements

Overview

Its fairly typical to have a

table of contents page. This

can be done with lots of bellsand whistles to make it look

better, but the basic structure of

the presentation will usually be

something like what is shown

here.


3/17


ABC Inc. provides [service or product] to [customers, marketsegment] helping them to [value proposition which must be betteror cheaper by at least 25%] compared to solutions available today.

Business Proposition

ABC Inc: [What were all about.]

General Rule: Four bullet points

to a page, no more than fourwords to a bullet point. Youll

note we break this rule on every

slide of this presentation.

It is sometimes good to include

summary boxes at the bottom of the

page to summarize the major message

you want to convey on the slide. The

subtext has been put in [ ]s, to give

you a sense of the general message

each page wants to convey.


4/17


Buck Young and three friends decided to form ABC Inc.in 2001 after Buck had a chance to closely assess thewidgets market

Company has gone through an initial angel round of

finance

Company has partly developed patented technology andhad made strides in designing proprietary CRM system

History and Status

Our History and Status: [Weve been working hard andare making progress.]

This is an establishing slide,

just let the audience know a

little bit about the company and

where it stands today.


5/17


Patented widget process

Increases effectiveness by 60%

Decreases cost by 40%

Backward compatible with legacy systems Strong expansion opportunities into additional markets

[X, Y and Z] in the future

The Product

Our Product: [Breakthrough advances with large barriersto entry for competitors.]

VCs want to see that you will

be able to protect your market

advantage in some way to

prevent entry by competitors.

A single product idea may not be the

basis of a sustainable company in the

long-run. If you have other markets that

you can expand into in the future, say so.

Faster, better and / or cheaperby at

least25% to have reasonable a chance

against established competitors.

Emphasize whatthe benefits are here,

and save the 90-slide technical

discussion on how it is accomplished

for later due diligence.


6/17


Forrester says that billions and billions of widgets in our industrywill be sold, and growth will be infiniteforever.

Weve surveyed 20 companies in-depth, which are in our targetmarket. Summary results:

Approx. 120 such companies in our market Company sales revenues from $10-70 million, co.s mostly profitable

Annual widget purchases/co.: $1-12 million, median $3 million

Growth of widget purchases: about 17%/year for last three years

Market in volatile phase currently, due to technology change

Total Market potential: $350 million (based on bottom up analysis)

The Market

Our Market: [Its big enough for youand growing fast.]

Most presentations start with a top down estimate

of the market, generally provided by a respected

source. You want to emphasize basic market

dimensions and growth prospects. Many tech start-

ups stop here, but top down is not enough.

You also have to do a

bottom up marketanalysis, actually doing a

survey of potential clients,

or a thorough

segmentation breakdown.

The bottom up market

will tell you how many

potential clients are

actually relevant to you.


7/17Investor Presentation [Date]

Typical Customer

Sales of $30 million per year

Spends $3 million/year on widgets

Profit margins low, under pressure to cut costsand widgets are a

major cost item. Purchasing conducted by Purchasing Dept, but only with approval of

Dir. Of Manufacturing. Topic is high priority for CEO.

Supplier relationships reviewed only once a year, in September

New product distributions systems (NokEric) are causing market

volatility Cost will be key factor in determining supplier choice.

Customer Characteristics

Our Target Customer: [Open for a changeto us.]

Many VCs really like to see specific

customer knowledge, not only about

whatthe customer will buy, but who

specifically is the client (CEO, Mfg.

Dir. may not be the same!), and how

the decision is made. Thinking about a

prototypical client can help you

understand the business.


8/17


Ukr-Maf Inc.: Have developed personalized incentiveplan that supports aggressive sales force strategy, butproduct quality is poor.

NokEric Inc.: Have developed 3G-based widget sales

concept, with very high quality, but can only bedelivered through MMS

Competition

Our Competition: [Theyre tough. And nasty.]

You should have a pretty good idea

of your competitors business

models. If they have strengths, it is

OK to say so, because it will also

give insights into their structuralweaknesses. Be dont expect VCs

to believe that your competitors are

total fools, or that they wont react

ever, no matter what you do.


9/17


ABC Inc Strategy:

Focus on Middle Market Customer segment

Avoid dark alleys late at night, but

Provide personalized service

ABC market share: 12%

Projected steady state revenues: $40 million/year

Strategy

Our Strategy: [We deliver something better or cheaper for aspecific market segment.]

Your strategy is your approach

to the market based upon

opportunities, on the one hand,

and the capabilities of your

competitors, on the other. If

youve done your math right,

you should be in a position toestimate your market share, and

thus your revenues.


10/17


Sustaining Competitive Advantage Ukr-Maf will self-destruct due to legal enforcement

NokEric will ignore this market, because $40 million is tablecrumbs for NokEric, but

NokEric will continue to develop MMS-based widget sales, and

will move aggressively on our market with remote sales in2004

Critical Success Factors

Unique, sophisticated CRM system to insure bid at appropriatemoment

R&D Dept. will reduce mfg. costs by 50% to insurecompetitiveness using patented Shrink-O-Widget technology.

Business Model Drivers

Our Model: [No matter what they do, we win.]

Business model

drivers really refer to

features and abilities

that you have thatyour competitors

either cant get or

wont develop because

it doesnt meet their

business model. Ukr-

Maf cant get

respectability;

NokEric wont rework

their systems to servethis market niche.

CSFs are what

you really have to

do well to win inyour target

market. These

are endogenous

factorsthose

under your

control.


11/17


ABC Inc. widgets are ready to ship

Reference customers are thrilled with the beta version

Best widget Ive ever owned CEO, Reference Co., Inc.

Strategic partners ready to promote our widget

We see a huge demand for ABC widgets VP Sales, Big Corp.

Value Added Resellers have been recruited

Advertising & PR plan is in place

Analyst meetings went great Major launch event scheduled at WidgetWorld Expo

Rollout

Rollout: [We can make it from here to there.]

VCs know that products

dont sell themselves, and

want to see that you have a

specific plan for getting yourproduct out to market

effectively and efficiently.


12/17


Slow market uptake

Key man risk: Ukr-Maf retaliation

Failure of key internal initiatives (Shrink-O-Widget)

Nuclear war

Key Risks

Our Key Risks: [Not so bad. Take em or leave em.]

As a rule of thumb, you should never

have more than three key risks, and you

will not usually have less than two.

Thus, if you have 4 or more key risks,

you dont have a dealgo back to

rethink your concept. Incidentally,

there are thousands of minor riskslike

nuclear war. You dont really need toput those in the presentation.

Key risks are residual or

exogenous risksrisks that

you cant eliminate, no matter

what. Therefore, these are the

risks that you are asking toinvestor to take. If he doesnt

like these risks, then the

discussion is over, because there

is nothing you can do about them.


13/17


CEO: Buck Young, 28 Buck has had a middle management job at NokEric, where they think pretty

well of him and hes had a chance to take a close look at the future of thewidgets market. He thinks hes smarter than everyone else, and thereforeexpects a VC to finance his scheme.

CTO: Ben Had, 54

Ben has worked all over the place, most recently at Cistel. Hes a real adultwith kids, salary, mortgage, the works. He worked with Buck a few yearsago, and Buck sure is a sharp kidespecially if he can convince a VC tofinance this project. The ideas great, well, as far as a CTO can tell. Bencarries an ABC business card, but he hasnt quit his job at Cistel yet.

CFO: Guy Big, 48

Guy is a Senior Vice President at Goldman Sachs. Buck met him at a cocktailparty and asked if he could use Guys name as a referencewhich he has.Buck reckons hed be pleased to let Guy know about his proposed positioneven offer him a jobif the VC finances the deal.

Management Team

Our Team: [Experienced. Successful. Up to the job.]

The c

Goldm

VP leavi

outfit is

and thesuspects

other

probably

Big,

somethin

looki

Benw

held a

induscounte

Buck, wh

might

jud

The management team is crucial, and you want to show

a balanced, experienced team with good credentials.

Unfortunately, this is often hard for a start-up to do.

One approach is to assemble a virtual team where

some people are expected to join if offered the job upon

fundingsometimes listed as to be hired.


14/17


Year 1 Year 2 Year 3 Year 4 Year 5

Revenues

Annual Growth -- 14% % % %

Pre-Tax Profits

Pct of Revenues (55)% (8%) 2% 12% 11%

Cash Investment (2.1) (0.9) -- -- --

Financial Highlights

Fin. Performance: [Balanced. Achievable. Pretty appealing.]

You dont need a whole lot of detail

here. The VC is just trying to answer

the following questions: 1) How big

does it get? 2) Does the growth look

manageable? 3) Is the profitability

within norms? 4) How much cash

does it need?

Show as few decimal places as possible. So,

dont show revenues as $12,435 million: 12.4

or even 12 is fine. Same for percents. Growth

of 14.27%--how good a manager are you?

Showing growth as a simple 14% is fine. This

is not an accounting exercise, it is a decision-

making one. Approximations are fine.


15/17


Series A Funding: $3.0M Milestones to be achieved (24 months)

Establish sales for initial product

Sales run-rate of $3.5M by end of 18 months

Profitability by the end of 24 months

Use of funds

Key management hires $400K

Other technical & support staff $500K

Product packaging & COGS $400K

Sales & marketing expense $950K

General operating expense $750K

Funding Needs

Our Funding: [Reasonable to accomplish specific goals.]

Dont forget to

include what the

investment is to be

used for. Be

reasonably specific.

Dont just say to

run the business,

but show that some

thought was put into

determining the

amount being asked

for.

You need to say how

long the money will

last, and what is

expected to be

accomplished during

that period.


16/17


Pre-Money Valuation: $1.5 million

Cash Investment: $3 million

Exit Valuation (Yr 5): $30 million

Proposed Investor Share: 66.7%

Return to Investor (irr): 46%

Cash-on-Cash Return Investor 6.7x

Deal Summary

Investor Performance: [Fair Valuation. Good Returns.]

Not everyone likes to include a deal summary,

because it can contain transaction details which

might properly be the subject of negotiation.

However, some VCs like deal summaries

because it tells them clearly 1) how much cash is

needed and 2) what their expected returns are.

Be careful with the

pre-money valuation.

If its too high, the VC

may think youre

simply unrealistic and

not professional, and

may dismiss you out

of hand. On the otherhand, it is your

opening negotiating

position, so you want

some latitude for later

discussions.


17/17


Questions

ABC Inc.: [Invest in us.]

By Steven Kopits, +1 508 685 1200, [email protected]&

Daryl Scott, Scott Technology Group, Inc.

[email protected], www.ScottTechGroup.com

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121005 -8-InvestorPrezTemplate