10 mistakes to avoid in seeking funding...• startups depend increasingly on personal savings and...
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Marketing to Investors
A Calyx Group ThinkTool
10 Mistakes to Avoid in Seeking Funding
10 FUNDING STATISTICS
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1. 77% of small businesses rely on personal savings for their initial funds.
2. A third of small businesses start with less than $5,000.
3. The average small business requires about $10,000 of startup capital.
4. Only 0.91 percent of startups are funded by angel investors
5. Only 0.05% of startups raise venture capital.
6. 38 percent receive funding from family and friends.
• The average seed round is $40 million.
1. The median company running a seed funding round is 3 years old.
2. Of startups that raised seed rounds, 1% reached unicorn status of $1B+
valuation.
3. Startups with two co-founders rather than one raise 30% more capital.
https://www.fundera.com/resources/startup-funding-statistics
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Mistake #1:
Assuming This is About You
THE INVESTOR HAS A VERY DIFFERENT
PERSPECTIVE!
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THE INVESTOR’S PERSPECTIVE
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Mistake #2:
Talking to the Wrong People
NO TWO INVESTORS ARE THE SAME
IS YOUR BUSINESS A FIT FOR THE ONES
YOU’RE TALKING TO?
FOR WHOM ARE YOU A FIT?
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Portfolio CompaniesEconomic Sector
Investment Stages Investment Thesis
MISTAKE #3:
PITCHING THE
PRODUCT TO GET
INVESTMENT
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WHAT
INVESTORS
FUND IS THE
WHOLE EGG –
THE BUSINESS,
NOT THE
PRODUCT
PER SE
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MISTAKE #4:
LAYING OUT
FACTS
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DATA DUMPS DON’T APPEAL TO EMOTIONS OR INSPIRE.
BUYING DECISIONS ARE BASED ON EMOTION..
TO WIN INVESTORS
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Investors Want to Hear a Story
About Your Business
Stories are narratives that engage
emotion.
They change how the brain
processes information.
Your story is about a quest - how
to solve a customer problem in a
way that creates ROI for
investors.
Make it enjoyable, entertaining..
MISTAKE #5:
HAVING GAPS IN PLANNING
12 “The plan is useless, but planning is essential.”
MISTAKE #6:
MISUNDERSTANDING
THE MARKET NEED
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PEOPLE DON’T WANT TO BUY A
QUARTER-INCH DRILL. THEY WANT A
QUARTER-INCH HOLE!”
PEOPLE DON’T WANT TO BUY
A QUARTER-INCH DRILL.
THEY WANT A QUARTER-INCH
HOLE!
(TED LEAVITT)
IT’S ALL ABOUT HOW CUSTOMERS
DEFINE WHAT THEY NEED
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JOB TO BE
DONECUSTOMER
SOLUTION
A JTBD is not a product, service, or a specific
solution; it’s whatever the customer needs to
achieve a desired state of being or outcome.
The Market is About
What the Customer Needs
Regardless of Who the Customer Is
COMPANY JTBD NOT BASED ON
eBay Sell personal
items
An auction
psychographic
Google Find
information
A search
demographic
Swiffer Clean floors A profile of people
who mop
MedTech
Device
Heal wounds
cost-
effectively
Demographics or
psychographics of
patients or their
physicians
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MISTAKE #7:
DOWNPLAYING OR OMITTING MARKETING
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PRODUCT
MARKETING
REVENUE
A MARKET CONSISTS OF
BUYERS AND SELLERS OF A
PARTICULAR PRODUCT WITH
THE POTENTIAL FOR A
TRANSACTION.
THE MARKETING PROCESS
CONNECTS YOUR PRODUCT
TO THE MARKET SO SALES
CAN CONNECT IT TO
REVENUE.
HOW FAMILIAR ARE YOU WITH ALL
THE ASPECTS OF MARKETING?
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MARKETING SALES
• Gives strategic direction to the company & product development by understanding what products the customer wants to hire and the job to be done that is the reason why from Day 1 of the concept.
• Gets people interested in the product,
• Establishes the context for sales.
• Focused on customers and the market.
• Generates revenue
by getting people to
buy the product.
• Transfers ownership
of the product to a
customer in exchange
for revenue.
• Focused on the
product and company
after the product
exists.
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Mistake #7:
Failing to Protect IP Assets
• The right to use your
own invention
• Exclusivity
• Opportunities for
financial gain
• Opportunities for
monetization
• An investor priority
INTANGIBLE ASSETS NOW REPRESENT 87% OF S&P 500 MARKET VALUE
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BUSINESS
VALUE
Align IP & Business Strategy
Map Implementation
Initiate IP Protection Cost-Effectively
MISTAKE #9:
HOCKEY STICK FINANCIALS
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NO ONE BELIEVES IT
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SET REALISTIC TARGETS
MAKE REALISTIC
PROJECTIONS
MISTAKE #10:
DISREGARDING
THE BOTTOM LINE
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• Startups depend increasingly on personal savings and personal
loans to bootstrap into early revenue.
• VCs are investing more in fewer startups – taking fewer risks.
• The bottom line for startups: monetize.
• To appeal to investors.
• To qualify for small business loans.
• To self-fund - do it yourself - build your own momentum.
FUNDING A STARTUP IS A STEP-BY-STEP JOURNEY
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NOW JUST DO IT!
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THE CALYX GROUP LLCMAKING INNOVATION FUNDABLE
212.421.5257
www.thecalyxgroup.com
Eleanor Haas, Managing Director
eleanor@thecalyxgroup.com
Continuous Learning
• Job to be Done - Bob Moesta pioneered the concept http://jobstobedone.org/
• The Forum for Growth and Innovation is a community for practitioners familiar with the predictive theories taught by Professor Christensen at Harvard Business School in his signature course Building and Sustaining a Successful Enterprise (BSSE.). www.thefgi.net
• www.thefgi.net › uploads › 2010/09 › What-is-a-Business-Model
• Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld (Author), Jason Mendelson (Author)
• How To Tell A Startup Is A Smart Investment, According To An Investor https://medium.com/@minutesmag/how-to-tell-a-startup-is-a-smart-investment-according-to-an-investor-cf86934c3e73
• Structure Your Presentation Like A Story https://hbr.org/2012/10/structure-your-presentation-li
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