How to Write a Business Plan - PowerPoint PPT Presentation

Loading...

PPT – How to Write a Business Plan PowerPoint presentation | free to download - id: 6956f0-YmJjN



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

How to Write a Business Plan

Description:

How to Write a Business Plan Seth Yakatan Katan Associates March 2, 2011 Calit2 Auditorium – PowerPoint PPT presentation

Number of Views:64
Avg rating:3.0/5.0
Slides: 62
Provided by: SethYa3
Learn more at: http://merage.uci.edu
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: How to Write a Business Plan


1

How to Write a Business Plan Seth
Yakatan Katan Associates March 2, 2011 Calit2
Auditorium
2
Disclaimer
  • My opinion

3
Our Business
  • Strategic Consulting
  • Mergers and Acquisitions
  • Business Development and Partnering and Other
  • Government and Industry Advisory

4
Our Team Associates and Partners
North America Marvin Collin John Tucker, PhD
5
Representative Clients
6
Seth Yakatan
  • In excess of 20 years experience as a corporate
    finance professional
  • In excess of 4 years on a direct investment basis
    as a venture capitalist
  • In excess of 6 years as a merchant banker part
    of a group with over 5 billion under management
    at Union Bank of California, N.A.
  • Founded Katan eight years ago, completed
  • Sale of assets of 9 biotechnology companies
    transaction value gt 150.0 million
  • Advised on 4 successfully completed, early-stage,
    partnering assignments, with value generated for
    clients in excess of 410.0 million
  • For the past seven years, Mr. Yakatan has served
    as a faculty member for the BIO Annual Meeting
    Executive Workshop Series
  • Mr. Yakatan holds a BS in History and Public
    Affairs from the University of Denver and a MBA
    from the University of California, Irvine,
    Graduate School of Management.

7
Seth Yakatan Track Record page 1
8
Seth Yakatan Track Record page 2
9
Agenda
  • Risk Milestones
  • How I Do It
  • Business Plan 101
  • Specific Criteria
  • A Few More Tips
  • QA

10

Risks Milestones Seth Yakatan Katan
Associates March 2, 2010 Calit2 Auditorium
11
Milestones ???
12
Risk
Commercialization
Most new technologies go through a long
maturity-this can take up to 20 years
development cycle before they reach
commercialization
Debugging
Early Hype
Value
Risk
Dissapointments and disillusion
Time
13
Milestones of Development
14
An Example
15
An Example
16
An Example
17
An Example
18
Why are Milestones Important?
  • Achievement of them de-risks projects
  • Lower risk, higher value

19
Are you ready to start today ?
  • What do you have?
  • Why is it novel?
  • What is the market?
  • At what stage of development is it?
  • Can one technology support the formation of an
    entire company?
  • Who can help ?
  • Where do I get ?

20
DPs Issues
  • Inability to tell the story properly
  • Failure to meet or respect the time frame
  • Failure to explain the value proposition
  • Failure to disclose issues up-front
  • Lack of knowledge of the competitive landscape

21
It IS a Tough Road
  • There is a high failure rate in new ventures
  • Approximately 20 are successful in obtaining
    more than 1 round of capital
  • VCs strive for failure rates of 80 on
    investments
  • 5 in 10 investments fail
  • 3 in 10 investments breakeven
  • 2 in 10 investments succeed
  • A 2009 report by PriceWaterhouseCoopers indicates
    that only 10 to 30 of venture capital funds
    produce profit-generating firms

22

Would You Have Invested?
23

How I Do It Seth Yakatan Katan
Associates March 2, 2010 Calit2 Auditorium
24
Our Criteria K. I. S. S.
  • Do we believe that the people involved can get
    the job done?
  • Does the product/technology/company have a
    sustainable competitive advantage?
  • Do we share similar expectations of value and
    outcomes?
  • Can we add value to the company/process given our
    involvement?

25
4 Easy Steps
  • Elevator Pitch
  • Presentation
  • Executive Summary
  • Plan
  • Executive Summary
  • Products or Services
  • Market Need (Marketing ??)
  • Market Potential
  • Competitive Advantage
  • Management
  • Financial Overview

26
The Elevator Pitch
  • Do we know what this is ???
  • An elevator pitch (or elevator speech) is a brief
    overview of an idea for a product, service, or
    project.
  • The pitch is so called because it can be
    delivered in the time span of an elevator ride
    (say, thirty seconds or 100-150 words).
  • Part Mission Statement
  • Part Positioning Statement

27
Presentation
  • Use as a high level outline for the business plan
  • Executive Summary
  • Products or Services
  • Market Need
  • Market Potential
  • Competitive Advantage
  • Management
  • Financial Overview

28
Executive Summary
  • Most important piece of the Plan
  • Begin with the Elevator Pitch
  • Talk about product / service
  • Highlight Market
  • Promote Management
  • Use of Proceeds
  • Ask for the
  • What is the value ?

29
Business Plan
  • Executive Summary
  • Products or Services
  • Market Need
  • Market Potential
  • Competitive Advantage
  • Management
  • Financial Overview

30

Business Plan 101 Seth Yakatan Katan
Associates March 2, 2010 Calit2 Auditorium
31
What is a Business Plan ??
  • A business plan is any plan that works for a
    business to look ahead, allocate resources, focus
    on key points, and prepare for problems and
    opportunities
  • Plans don't sell new business ideas to investors.
    People do. Investors invest in people, not ideas.
    The plan, though necessary, is only a way to
    present information

32
Purpose
  • Business planning is about results
  • You need to make the contents of your plan match
    your purpose
  • Don't accept a standard outline just because it's
    there

33
Key Factors
  • Simplicity
  • Believability
  • Focus
  • Management
  • Milestones

34
Key Mistakes
  • Management
  • Competition
  • Idea / Technology inflation
  • Belief in the market
  • Valuation or Lack of Valuation
  • Answering questions
  • Lack of milestones

35
ABRAHAM LINCOLN
  • 1831 Failed in Business
  • 1832 Lost bid for Illinois State Legislature
  • 1834 Failed in Business
  • 1835 Fiancé died
  • 1836 Suffered a nervous breakdown
  • 1843 Ran for Congress and Lost
  • 1848 Tried again for Congress and Lost
  • 1855 Ran for US Senate and Lost
  • 1856 Tried for Vice President and Lost
  • 1859 Lost bid for Senate again
  • 1860 Became 16th President of the US

36

Specific Criteria Seth Yakatan Katan
Associates March 2, 2010 Calit2 Auditorium
37
Business Plan
  • Katans Concepts
  • Executive Summary
  • Products or Services
  • Market Need
  • Market Potential
  • Competitive Advantage
  • Management
  • Financial Overview
  • Development pathway
  • IP
  • Technology overview
  • BOD
  • AB
  • Competition Requirements
  • Executive Summary
  • Products or Services
  • Market Need
  • Market Potential
  • Competitive Advantage
  • Management
  • Financials

38
Some things to consider
  • Does the plan explore an opportunity that is
    realistic?
  • Is the business model well thought out and have
    the potential to be effective?
  • Are there past benchmarks set that the plan can
    be measured against?
  • Is a significant initial investment required?
  • What is the length of the implementation
    process?
  • Does the business have the necessary tools to
    become a market leader?
  • Has a clear target customer been established?
  • Does the management team have the skills to
    succeed?
  • What are the projections for the venture to
    achieve profitability?
  • Is the plan concise and well written?
  • What will allow this business plan to have
    sustained success?

39
Executive Summary
  • What problem are you solving?
  • What is your business proposition for solving the
    problem?
  • Who are your customers?
  • Who are your competitors?
  • How viable is your business?
  • How do you make money?
  • Executive Summary is clear effective as a
    stand-alone document

40
Products or Services What ?
  • What is the product or service?
  • What are its attributes?
  • Advantages and potential drawbacks?
  • Why/how is your product/service more compelling
    than existing ones or the competition? What is
    the stage of development?
  • Do you have a proprietary position or
    intellectual property protection planned or in
    place?)

41
Market Need Why ?
  • What specific conditions in the market have
    created the problem you are solving?
  • How will your product/service take advantage of
    the opportunity?
  • Who are your customers and what are their
    attributes?
  • Clearly define your potential customers and why
    they will pay for your product or service

42
Market Potential Why ??
  • What are the characteristics of the market for
    your product or service?
  • How will you reach the market?
  • How big is the market opportunity number of
    potential customers annual sales?
  • Can you narrow the market to a manageable
    segment?
  • How will you dominate the market? e.g. through
    pricing, quality, geography, etc?
  • Is there a market niche where you will have
    competitive advantage?

43
Competitive Advantage How ?
  • Competitive Matrix Who are your competitors?
  • Their strengths weaknesses?
  • Your strengths weaknesses?
  • How will you close the gap?
  • How easily can competition close gap?

44
Management Who ?
  • Who are key team members and their respective
    roles?
  • What are their relevant experiences and
    accomplishments?
  • What other areas of expertise are you lacking?
  • When will you need additional team members?

45
Financials
  • Income Statement
  • Balance Sheet
  • Funds Required Uses
  • Key Assumptions
  • Financial Model

46

A Few More Tips Seth Yakatan Katan
Associates March 2, 2010 Calit2 Auditorium
47
Im NOT That Smart
48
REALLY Im NOT
49
Even Better Let Them Do the Work
50
Clayton Christensen Disruptive Technologies
  • The term disruptive technology was coined by
    Clayton M. Christensen and described in his 1997
    book The Innovator's Dilemma.

Disruptive Technologies Displaced
steam engines and internal-combustion engines horses and humans (for powering machines)
Hydraulic excavators Cable-operated excavators
mini steel mills vertically integrated Steel mills
minicomputers mainframes
Container ships and containerization "Break cargo" ships and stevedores
desktop publishing traditional publishing
digital photography originally, instant photography, now increasingly all chemical photography
personal computers minicomputers, workstations
51
Clayton Christensen Disruptive Technologies
  • Main Principals
  • 1. Companies listen to their customers, and
    strive to bring to the market the products their
    customers ask for.
  • 2. Small Markets Dont Solve the Growth Needs of
    Large Companies.
  • 3. Markets that dont exist cant be analyzed
    Get close to your customers, learn their needs.
  • 4. Technology Supply May Not Equal Market demand.

52
Valuation
Trying to assess basic research by its
practicality is like trying to judge Mozart by
how much money the Salzburg Festival brings in
each year. Konrad Lorenz
53
Valuation
Of the 300-odd public companies in the
biotechnology business, 8 have meaningful
earnings from selling products. The rest trade
on the strength (or weakness) of their ideas.
M. Gianturco in Forbes
54
Definitions
5 million pre-money
10 million post money 50 ownership
5 million
Taken from Understanding Valuation a venture
Investors perspective Callow, etal, Boston
Millenia Partners White Paper
55
Series A Valuations  - Revealed
  • Series A valuations are usually based on
    percentages - as in, how much of the company does
    the venture capital fund want to own
  • Most established venture funds have an
    established strategy of owning a particular
    percentage of a company after a Series A
    investment
  • A typical, good fund will look to own 20 to 33
    of a company after the initial investment
  • During a normal two-VC, syndicated Series A
    investment the startup sells around half the
    company to the VC
  • Raising 4 million? Pre-money of 4 million
  • Raising 6 million? Pre-money of 6 million

56
Summary
57
Valuation football field example
Valuation overview
This leads to a core valuation range
58
Data
Financing Company Stage Data Risk / Uncertainty Value in Millions
Seed Incorporation / early Development Soft / Value Proposition Extremely High 1
Series A (First Inst Round) Development Validation / Time to Market Very High 3
Series B Shipping product Prelim Revenue High 7.5
Series C Shipping product Predict Revenue Moderate 10
Mezz /Later Shipping product / Profitable Hard Data, EBITDA, Net Income Low 20 to 50
Taken from Understanding Valuation a venture
Investors perspective Callow, etal, Boston
Millenia Partners White Paper
59
The Exit
  • It there one ?
  • How realistic is it ?
  • What happens if there is none ?
  • Is that okay ?

60
Key Lessons for Success
  • Products must have large and near-term markets
  • Compatible corporate team
  • Level of funding sufficient to meet goals
  • Observant follow market dont discard
    anything
  • Confidence in common sense
  • Be prepared for competition new product
    pipeline
  • Need luck and smart friends

61

Q A Seth Yakatan Katan Associates March 2,
2010 Calit2 Auditorium
About PowerShow.com