1 s. kaplan e. rudnick new venture challenge phase ii kickoff: presentations and business plans...

1S. KaplanE. Rudnick

New Venture Challenge Phase II Kickoff:Presentations and Business Plans

Steven Kaplan and Ellen Rudnick

Graduate School of BusinessUniversity of Chicago


Agenda

Preparation for classroom presentations. Guidelines for developing business plans.


Preparation for classroom presentations.

Each team will present twice.

– First time in March / April.

– Second time in End of April / May when business plans are more complete.

We will contact each team in our respective sections to set presentation dates.

Teams will have 45 to 50 minute time slots.

– Should aim for 25 minutes to present. Do not go over.

– Leave 20 to 25 minutes for discussion.

– Be concise.

Goal is to make plans better.

– Welcome criticism, don’t fight it. Have thick skin.

– Presentations and critiques are very helpful.


Strategy for presentations

Between now and presentation:

– Talk to customers / potential customers.» Will they buy product / service? Why? » What do you have to do to get them?» What will they pay?

– Get beta customers?– Identify and approach resources that can help.

» Advisors?» Employees / management?» Alliances / partners?» Suppliers?» Other strategic relationships?


Strategy for presentations - 2

At presentation:– Do not waste much time at 5000 feet.

» “This is a big market.”– Get into details quickly.– The more details / granularity, the better.– Make sure that you:

» Describe typical customer.» Describe what typical customer does today.» Describe how typical customer benefits from your product / service.» Describe why customer will buy from you.» If you do not do this, we will ask you to do it.» Earlier you do this the better.



Once audience understands business and value proposition, then (not necessarily in this order):– Describe market size.

» Segment as well as you can.– Describe how much of that market you will get to and how you will

get to it.– Describe and analyze competitors.– Describe your competitive advantage / what is special.– Describe management team.



How can we help? Ask for help / suggestions:– Describe what you are unsure of that you need to investigate.– Describe the resources you would like to obtain:

» Advisors?» Employees / management?» Alliances / partners?» Suppliers?» Other strategic relationships?

First presentation should be designed with goal to elicit feedback and get information.– Idea is to be as open as possible, not defensive.– May be painful anyway.


Developing a Business Plan


Functions of the Business Plan

Planning tool– Evaluate strategies, define needs, set objectives.

Sales Document for Raising Capital– Introduction to the business.– Tool for basing investment decision.

Measure and Monitor Performance– How much progress is made against original objectives.– Identify emerging problems.


Business Plan is a Process

Plan will be edited, reworked, revised over time. Almost impossible to predict the road map for success this early. Ability to adapt to new and unforeseen developments key to

success. Even the most successful business plans adjust.

– Microsoft.– Amazon.


Elements of the Business Plan

Executive Summary Company Description Management Product Marketing and Sales Operations Financial Statements and Projections Appendices


Executive Summary

Most important part of plan; investors will not read further if story not compelling

2-4 pages. Should be done after preparing the rest of the plan and it

should distill each section of the plan.


Executive Summary - 2

Should include:– The company’s background.– The product / service and its technology (any proprietary advantages)– Description of value proposition.

» How do customers benefit? Before and after.» Why will they buy from you?» How will you get them?

– Market potential for the product.– Management team and its track records– Key advisors and/or strategic relationships– Key financial data: five year forecasts– Amount of capital required– Key milestones


Company Description

Purpose: Communicate origins of company and its goals Brief and Direct. Explain organizational, research, development and other activities

that have occurred to date. Summarize both short and long term objectives of the company.


Management

Management capability single most important factor to investors. Should describe relevant experience and accomplishments of

team members. Include resumes in appendix. Do not overstate abilities of team. Recognize gaps and how you intend to fill them.


Product or Service What need is the product / service filling?

– What is value proposition?– Make sure that you:

» Describe typical customer.» Describe what typical customer does today.» Describe how typical customer benefits from your product / service.» Describe why customer will buy from you.

Product attributes: competitive or proprietary advantages. If in development stage what needs to be done to complete development?

How long will it take? If technology intensive discuss nature of technology, ownership issues, prior

applications, competing technologies.


Marketing and Sales

Market understanding critical to establishing credibility with investors General market issues: size, projected growth, driving forces, segments,

characteristics Who are the customers and what motivates them? Where do the customers fit in the distribution chain? What are the distribution and sales channels to reach these customers?


Competition

Identify competing products and technologies Assess competitive strengths and weaknesses Consider using a comparative table to rank competitors on

features/characteristics What might be defensive reaction of competitors to this product?


Revenue model

Estimate market penetration over time Product pricing strategy Sales and Distribution strategy


Operations Issues

In-house or contracted resources Cost related issues


Financial Statements and Projections

Income statements, Balance Sheets and Cash Flow Statements for five years– Monthly for year 1 and quarterly thereafter

Should be bottom-up with top-down reality check. Key assumptions in the projections Sensitivity Analysis: Impact on projections from changes in the

assumptions Realistic, logical and attainable!!!


Items for Appendices

Detail of Financial Forecasts Management resumes/bios Patent Information Pictures or drawings of product Relevant articles in press or trade journals Market research information Summary of key contracts or business relationships


Our availability: Generally available. Call or e-mail first to make

appointment. Steve

– Call: 702-4513. – Fax: 702-0458.– E-mail: [email protected]

Ellen– Call: 834-3781. – Fax: 702-0458.– E-mail: [email protected]


“Make no small plans!”

Aim as high as you can imagine. If you think you have a real, valuable plan, go after the best:

– Go after the best employees.– Go after the best advisors.– Go after the best strategic relationships.– Do not think that MBA students cannot go after them.

Speed, Speed, Speed!


Team Introductions and Elevator Pitches

Professor Kaplan (34104-01, Wed./Fri.) Advanced Chromatography Systems

The Auto Shop, Inc. Changing World Foods CUBIS Group Inc. DriveBase Edu Fin Feations Harvey Washbanger’s & Co. InfoUnity Maroon Biotech P.A.R.I.S. PowerDict, Inc. Supertilities Toul AB WITco

Professor Rudnick (34104-81, Mon.) Brides Noir CorrelSoft, Inc. Custodial Engineers DS2 GMB Plastics LLC Kid’sFirst Loren Brown Hair Studios Marketing Decision Partners Milega Occuity Omnichip Proxy•Mate PureChem Raicore Networks Symphony Design

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