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How to Create A Killer Business Plan and Financing Pitch

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How to Create A Killer Business Plan and Financing Pitch – PowerPoint PPT presentation

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Title: How to Create A Killer Business Plan and Financing Pitch


1
How to Create A Killer Business Plan and
Financing Pitch
Christine Comaford Managing Director
2
Bio
  • Engineer, entrepreneur, venture catalyst
  • 5x entrepreneur, 2 IPOs, 3 MA, 100 million
    raised in last 5 years
  • Venture Catalyst specializing in Enterprise
    software Internet enabling technologies
  • 1 other partner Kimball Atwood

3
Did You Know?
  • Most business plans are never read by a VC
    partner?

4
(No Transcript)
5
Did You Know?
  • VC investments in Internet firms by 1H99 were
    over 6 billion -- nearly 2x of 1998 TOTAL!
  • Source IDC

6
Did You Know?
  • The 1 reason a startups valuation is cut is an
    incomplete executive team

7
7 Steps to A Compelling Business Plan Financing
Pitch
8
Know the Risks to Address
  • Financial
  • Market
  • Technology
  • Team

9
6 Things You Must Have
  • Stable, working business models
  • Good business plan
  • Competent management
  • Great vision
  • Big markets
  • Good team

10
Business Model Components
  • Markets Customers
  • Profile and Segmentation
  • Key Pain Points
  • Size of the Problem in Dollars
  • Location of those Dollars
  • Competition
  • Products Services
  • Product Definition
  • Value Proposition
  • Total Cost Analysis
  • Add-on Product Strategy

11
Business Model Components (contd)
  • Marketing Distribution
  • Marketing Strategy
  • Sales Process
  • Implementation Process
  • Strategic Alliances
  • Financial Engine
  • Pricing Model
  • Revenue Model
  • Cost Structure

12
1 - State Credibility
  • Exec team
  • Pedigree (education, past startups)
  • Publicity (published pieces, notoriety, awards)
  • Connections (technology advisor to White House,
    etc)
  • Well-known board members, advisors (who are
    betting on this company)

13
Who You Need On Your Team
  • Visionaries (assorted positions)
  • Leaders (CEO, Managers)
  • Implementers (Sales, Marketing, Technology)
  • Infrastructure Builders/Supporters (Operations)

14
2 - Be Clear
  • Have 3 key points to deliver
  • Show and tell your story (use words AND
    pictures)
  • Repeat the 3 key points at least 3 times
  • Only tell stories that enhance your points

15
3 - Be Concise and Complete
  • Why is this a great idea?
  • How will it be executed?
  • How will risk be minimized, return maximized?
  • What are the sustainable barriers to entry?
  • 20 page plan (3-5 page exec sum with 1 page
    financials)

16
Complete Means
  • Pain/Solution
  • Opportunity/Market Size/Market Analysis
  • Competitors today and tomorrow
  • Product/Service Definition Futures
  • Marketing Plan/Sales Strategy/Strategic
    Alliances
  • The Team staff and extended
  • Financials (create a dynamic model)

17
4 - Be Compelling
  • This is a HUGE opportunity, were the best to
    seize it, here are 3-5 specific reasons why
  • You think this opportunity is HUGE today? Check
    it out in 2-4 years!
  • There is major PAIN, we remove it -- no doubt
  • We have the team, technology, right market,
    just add water

18
5 - Give Them a Reason to Believe
  • Create the excitement (greed), then
  • Convey the long term vision (wow! Look at all
    the additional markets we can get into!), then...
  • Spell out the short term practicalities (hey --
    these guys look like they could actually make
    this happen!)

19
6 - Give Them the Right Info
  • What is your elevator pitch? In other words if
    you had to tell someone about your company on a
    short elevator ride, what would you say?
  • What product or service is sold?
  • Who is it sold to?
  • How much does it cost (average sales price)?

20
Right Info Contd
  • How big is the target market?
  • What percentage of that market do you need to
    penetrate to reach 30 million in sales?
  • What is your key competition?
  • What is your KEY differentiation from the
    competition?

21
Right Info Contd
  • How long would this differentiation last?
  • Do you have customers? How many?
  • Revenue? How much?
  • Strategic Alliances? With whom?
  • Is your technology complete? If not, when?

22
7 - Present Properly
  • Practice and know it cold
  • Have backup slides for key areas (such as market
    segmentation, financials)
  • Be ready with a reference list (for all key
    execs, both personal and customer references)

23
How Long Should a Pitch Be?
  • A VC pitch should be 20 minutes long (goal book
    next meeting)
  • A customer pitch should be 30 minutes long
    (goal convince them to bring the decision maker
    in)
  • A recruiting pitch should be 30 minutes (goal
    check them out,sell the vision, decide next step)

24
Rx for Not Naturally Born Speakers
  • Best speech coaches
  • Silicon Valley Steve Mandel 408 475 8202
  • Boston Cheever Communications 781 639 1516

25
Great Entrepreneurial Resources
  • Read Burn Rate - Michael Wolff
  • Read High Tech Startup - John Nesheim
  • Check out www.vfinance.com, www.startupweb.com
  • www.artemisventures.com resources section has
    growing library of goodies

26
Entrepreneurial Resources
27
Do You Have These?
  • Right market
  • Right product/service
  • Right timing
  • Right info
  • Right priority
  • Right connections
  • Right team

28
Thank You
Q A/Lab Time
Christine Comaford General Partner and Managing
Director
29
Good Idea? Bad Idea?
  • Your startup is HOT! You do 3 VC pitches and
    also get some fabulous press. 10 more VCs call
    you, and you book meetings with them.

30
Good Idea? Bad Idea?
  • You get 2 term sheets for a 3mil investment both
    from 2 high value VC syndicates. One is for a
    6mil pre money valuation and 1 board seat. The
    other is for an 8mil pre and 3 board seats.
    There are a total of 5 board seats. You choose
    the 6mil pre.

31
Good Idea? Bad Idea?
  • Your startups product/service is nearly ready
    for beta. You can take 1mil to get through the
    beta, sign on a few customers, and make a few key
    hires, OR you can take 3mil to do even more.
    With the 1mil youll need to start fundraising
    again in 3 months, with the 3mil youll start
    fundraising in 12 months. You take the 1mil.

32
Good Idea? Bad Idea?
  • You have a skeletal exec team -- operations and
    technology only. Youll hire a CEO, sales,
    marketing and business development once youre
    funded. You set aside 15 of your pre-financing
    stock for the option pool.
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