get funded - structuring your start up documents

GetFunded

StructuringYourStartUpDocuments

emaginegroup  Foundedin2003  Globalventuredevelopmentfirmwithinvestmentsin15countries

acrossmultipleindustries  Groupmadeupof:

  emagineconsulting–ConsultingandResearch  iMedia–GraphicDesignandWebDevelopment  teslacommunications–TechnologyPlanningandManagement  WickedCode–SoftwareDevelopment  4SquarePeg–HumanResources

  Weareventurecatalysts  Weworkwithentrepreneursineverystageofbusiness

developmentfrombrainstormtoprivateequityinvestment

OurHistoryInVentureCapital  Inthepast5years

  Wehaveheardover600elevatorpitches  Wehavereceivedover400executivesummaries  Wehavereadandassessed100businessplans  WehaveinvestedoverUSD400millioninindustriesranging

fromtechnologytofashionandpublications  OurcurrentinvestmentportfoliostandsatUSD700million

  Asaresult,wehaveaspecialunderstandingofentrepreneurshipandhowtogetbusinessesfunded

OurFundingProcessBrainstorm

InternalBusinessPlan ~50–150pages

Teaser 1–2pageintroduction

ElevatorPitch ~5minutequickpitch

PitchDeck ~15–20slides

BusinessPlan 20–30pageplan

ExecutiveSummary ~2pageintroductiontoBusinessPlan

WhyDoEntrepreneursNeedBusinessPlans  Writtensummaryofaproposedbusinessventure  Helpsusunderstandanopportunityandhowtobestexploitit

  Givesablueprintfortheoperationalandfinancialviabilityofabusinessventure

  Explainsmarketingopportunities,go‐to‐marketstrategyandpostlaunchpromotionalplans

  Identifieskeypersonnel’sskillsetsandexperience

  Increasesthechancesofbusinesssuccessoreliminationofabusinessideabasedonfeasibility

  Specifiesthepotentialriskstotheventure’ssuccess  Providesabaselinetocompareprojectedvs.actualresults

WhyDoVentureCapitalistsNeedBusinessPlans  Helpsustoseethattheentrepreneurhasthoughtoutthebusiness

idea

  Showsusthattheentrepreneurhasdonetheirhomeworkonhowtobringtheconcepttomarket

  Providesuswiththefinancialrequirementsforstart‐up,productionandoperations

  DefinesthereturnoninvestmenttotheVC

  Setsatimelineforlaunch,growthandexpansion

6C’sofBusinessPlans  Complete  Clear

  Credible  Compelling

  CustomerFocused  ConcernfortheInvestor

DoYouKnowWhatYou’reGettingInto?

BenefitsandChallenges

WhatYouMayNotKnow

ElementsofABusinessPlan

WellStructuredBusinessPlan  ExecutiveSummary  MissionStatement

  BusinessDescription  IndustryAnalysis

  BusinessStrategy  CustomerAnalysis  Product/ServiceOffering

  MarketingStrategy  PromotionalStrategy

  CompetitorAnalysis  TeamComposition

  OperationalPlan  TechnologyPlan

  Research&Development  FinancialForecasts  InvestmentStrategy

  SupportingAppendices

ExecutiveSummary  “TheElevatorPitch”thatsummarizesthebusinessplaninto2

pages

  ThisshouldbewrittenlasttoassurethatallkeyelementsareexplainedfirstinthebusinessplanandthenrelatedintoastrongExecutiveSummary

  IftheExecutiveSummaryisn’tstrong,thebusinessplanwillneverberead

MissionStatement  Entrepreneur’sVision  Whatisthebusiness?

  Whatwillitbecome?  Whatwillitstandfor?

BusinessDescription  Introduceyourbusinessandexplainit

  LegalStructure  Locations  MarketNeed(Pain)‐>Solution  BusinessGoalsandObjectives  OverviewofUniqueAdvantages  WhatBenefitWillItProvideTheCustomer  ProfessionalServices

  Attorney  Accountant  Consultants  Insurance

IndustryAnalysis  Currentindustrypositionandtrends  Potentialtrendsthatcanbeleveragedforbusinesssuccess

  Totalsizeofthemarket‐>Howmuchcanyouserve?  Whatneeddoyourproducts/servicessolve?

  Entrybarriers  SWOTanalysis

MarketingandStrategyPrinciples

BusinessStrategy  Howwillyougaincompetitiveadvantage?  Whatmakesyouunique?

  Howwillyoumeetyourgoalsandobjectives?  Whatisthecompanybrand?

  Whatwillitcosttoenterthemarket,establishpositionandmaintainit?

CustomerAnalysis  Whoisthetargetcustomer?  Whatistheprofileofthecustomer?

  Demographicandpsychographicbreakdown  CustomerNeedAnalysis  Buyingcriteria  Valueproposition

Product/ServiceOffering  Tellusaboutyourproduct/service

  KeyFeatures  UniqueAdvantages

  Whatdoesitdo/Whatneeddoesitsatisfy?

  Howwillpeopleuseit?  Wheredoesdevelopmentstandcurrently?  Arethereanypatents,trademarksorcopyrightsthatwillaffect

productdevelopment?  Howwilltechnologicalchangesaffectproductdevelopment?

  Whataretheshortcomingsandhowdoyouplantoovercomethem?

MarketingStrategy  Provethataprofitablemarketexists  Demonstratecustomerinterest

  Howwillyoubuildawareness?  Howwillyoupositionyourproduct/serviceandbrand?

  Whatisyourpricingstrategy?  WhatistheGo‐To‐Marketstrategy?  Whatisthesalesanddistributionstrategy?

  Isthereaserviceplanand,ifso,howwillitbeimplemented/followed?

PromotionalStrategy  Advertising  PublicRelations

  PersonalSales  WebsitesandSocialMedia

  DirectMarketing  Telemarketing  ArticlesandPublications

  Budget?

CompetitiveAnalysis  Informationoncompetitors’marketshare,productsandstrategies  Whatareyouradvantagesoverthecompetition?

  Howelsecanyoursolutionbeachieved?  Competitorresponse

  Whatwillittakeforcustomerstoswitchtoyouroffering?  Howwillcompetitorsrespondtoyourmarketentry?

TeamComposition  Breakdownofkeypersonnel

  Education  SkillSets  ProfessionalExperience  Directrelevantindustryexperience  Accomplishmentsandtrackrecord(P&Lresponsibility)  Experienceoftheteamworkingtogether  StatusandNatureofCommitment

  Additionalrolestobefilled

  TalentAcquisitionStrategy  BoardofAdvisors  BoardofDirectors

OperationsPlan  Detailthedailyoperations  Structure,OwnershipandLegalForm

  OrganizationChartwithresponsibilities  Leasesandagreementsnecessarytooperations?

  Howwilltheofferingbeproduced?  Requiredresources  Capitalexpenditures  In‐houseand/ourOutsourcedproduction

  PostStartupProductionExpansionCosts

  SupplierAgreements  RequiredLicensesandPermits

TechnologyPlan  Howwillyourventureuse/utilizetechnology?

  Cutcosts?  Increaserevenues?  Streamlineproduction/productdelivery?  Obtainmoreclients/customers?  BusinessInformationSystems?

  Howwillithelptoachievebusinessgoalsandobjectives?

  Whatwillbethecoststoimplement,maintainandupgrade?  Whatarethetrainingcosts?

Research&DevelopmentPlan  Doesyourofferingrequireon‐goingresearchanddevelopment?  Howwillitbefundedandcarriedout?

  Whatindicatorswillbeusedtodeterminewheretheresearchanddevelopmentshouldbedirected?

  Howwillitbeimplementedintoproduct/servicedevelopmentandmanagement?

  Howwilltheresearchownershipbecontrolled?

FinancialForecasts  CapitalExpenditures  SalesForecast

  Willyouselloncredit?  Whatwillyourpolicybe?  Whatwillitcostyou?

  BreakevenAnalysis  3SetsofForecasts

  Optimistic  MostLikely  Pessimistic

  MonthlyProformaforYear1  QuarterlyforYears2–5

InvestmentStrategy  Amountofrequiredcapital  Personalinvestment

  Useoffunds  ReturnonInvestment

  Exitstrategy

Appendices  Resumes

  Owners  Shareholders  KeyPersonnel

  Financials  StartUpExpenditures  IncomeStatement(1year)  CashFlowStatement(12

months)  BalanceSheet(1year)  PersonalFinancial

Statements  CompetitorWeaknesses

  RiskAssessment  RequiredBusinessEquipment

withQuotations  MarketResearchStudies

  IndustryStudies  Research&Development  KeyAgreements

  TechnologyWhitePapers  AdvertisingMaterials(if

available)

HowDoWeDecideWhoToFund?

ThreeTests  RealityTest

  Doesthemarketreallyexistfortheoffering?  Canyoubuilditwithinthecostsdefinedintheplan?

  CompetitorTest  Companypositionrelativetokeycompetitors  Management’sabilitytocreateacompanythatcangivea

competitiveadvantageoverrivals

  ValueTest  Willitmakemoney?  Willitcoveroperatingexpenses?  Doesitgiveinvestorsanattractiverateofreturnorahigh

probabilityofrepayment?

ThingsThatKeepUsFromFunding  Lackoflogicinthedevelopment

offinancials  Unrealisticfinancialsorlackof

detail  Lackofplanningforvariablesfor

business  Underestimatingupfront

marketing&advertisingcosts  Location!Location!Location!  Noresearchonupfrontcosts,

purchasesandexpenses  NoallowancesforA/RandA/P  Forgettingtoincludeareasonable

salary  PieInTheSkyProjections

  Noquotesforrequiredproducts,servicesandequipment

  Failingtorelatetoarealneed/requirement

  Tryingtobeallthingstoallpeople

  NoGo‐To‐Marketstrategy

  “Wehavenocompetition”

  Businessplantoolongortootechnical

  Noriskanalysis

  Poorlyorganizedbusinessplan

  Badlydesignedorun‐proofreadbusinessplan