handout are you investor pitch ready

7/8/2015

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Investor Ready?Pitch Perfect?

Naeem ZafarProfessor of the Practice, Brown University, UC

Berkeley@naeem

[email protected]

Agenda

• Being “investor-ready”

• Pitching to investors

• Negotiating with investors/VCs

Entrepreneurship All rights reserved © Naeem Zafar 2

mailto:[email protected]

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Personal Background

• Faculty member at Univ of California Berkeley, Center of Entrepreneurship & Technology & Brown University

• C0-founder & CEO of BitzerMobile.com Acquired by Oracle • Founder Startup-Advisor.com – advisory to entrepreneurs• Experience at one large multinational & 6 startups• One IPO (Initial Public Offering)• Current founder/CEO of TeleSense.net • Raised over $70M in multiple ways (VC, asset sale, debt, angel)• Traveled to 76 countries, lived in 3• Brown University Electrical engineering, Univ of Minnesota• Lectured in Brazil, China, Japan, Algeria, France, UK, India,

Pakistan, Turkey, Colombia, Singapore, Netherland …• Advised or mentored over 1,000 entrepreneurs

All rights reserved © Naeem Zafar3Startup Workshop

www.startup-advisor.com All rights reserved © Naeem Zafar

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www.FiveMountainPress.com

http://www.fivemountainpress.com/

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Personal History

6/3/2012 © Naeem Zafar 5

First Internship

• Honey Research facility in Minneapolis MN

• Learning professional environment

• Created system to test chips


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Starting First Company

• XCAT founded in 1985 by 4 engineers

• VP of engineering

• Designed a simulation accelerator in total stealth mode

• No market/customer discovery no success!

• Sold company for a song after 3 years


Hardware Emulation

• New industry created

• 400 people, $150M sales


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Fingerprint Sensor Company


Investor Ready

• Have idea

• Initial team

• Market research with users & customers

• Financial model

• A pitch!


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Building a Financial Model

• Helps you estimate how much to raise

• Allows to react to new data with what-if analysis

• No VC will fund you without it

• You can create one in ½ a day!


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Why Do Financial Modeling?

• To answer the most important & fundamental question:

Does this make sense?

• You need to know more than anyone

• Tweak basic assumptions until it does!

ENGN 101 S03 All rights reserved © Naeem Zafar

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Building a Financial Model

• Financial model is clarity about your business

• It is built from common sense

– Sources of revenue

– Sources of expenses

– Net income

ENGN 101 S03 All rights reserved © Naeem Zafar 13

The Art of Presentation

14Entrepreneurship All rights reserved © Naeem Zafar

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Listen to a TED Talk

• Ted talk: http://www.ted.com/talks/david_s_rose_on_pitching_to_vcs?language=en#t-3838


You Are The Message!

• It is not about PowerPoint

• You are the message

• Use aids as needed

• Have your message ready & crisp


http://www.ted.com/talks/david_s_rose_on_pitching_to_vcs?language=en#t-3838

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Pitching

• Explain yourself in first minute (slide zero™)– Explain the relevance of what you do

– Tell a story

– What should I listen to you

– Why are you here?

• Answering questions

• Jumping around slides – don’t!


Pitching

• People listen to 7% of words that you say

• They listen to 52% of your body language

• Connect with your audience

– Make it relevant to them

– Be clear (first in your own head)

–Pause & let the message sink in!

All rights reserved © Naeem Zafar 18Entrepreneurship

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You & Your Passion

• Be attentive, energetic, in front!

• Know your message!

– Do not read your own slides

• Engage with your audience

• Your most magical tool: “the pause”


Say It With Conviction!


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10/20/30 Rule

• Ten slides

• Twenty minutes

• Thirty size font

• You want to communicate “enough”, not everything!

• Purpose of the pitch to stimulate interest, not to close the deal


What do VC hear?

• What you pitch– Unmet need

– Market size

– Solution

– …….

– Team

– …….

– Financial assumptions

– Financial projections

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• What they hear– Is there money to be

made?

– Are these the people who will make me money?

– How much money can we make?

Entrepreneurship All rights reserved © Naeem Zafar

7/8/2015

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Company Name

Name Title & Contact info

Tag Line

Investor Pitch

Audience can read the info but this is where you explain what you guys do: This is what I call Slide Zero

1: Team

• Who are you?

– Make yourself relevant

– Include advisors, consultants if they make you look larger & impressive

• OK to show up with a less than perfect team

– All teams have holes

– Important issue is that you know that there are holes that you are willing to fill


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2: Unmet Need

• What pain are you alleviating– Get everyone nodding their head in agreement

• Describe a problem people connect with

– Tell us how you validated your assumptions

• Customer examples, use actual names from market research

• Use-case is good way to explain problem


3: Target Market & Segmentation

• What is your target market

• Which sliver will you own first & why

• Market size

• Market dynamics

– Regulation, new technology, new players


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4: Solution

• How you alleviate this pain

• Make sure that audience clearly understand

– What you sell

– What is the value proposition

– Not a place for in-depth technical description – just a gist of “how”

• Avoid text but use diagrams, schematics, mockup, demo here


5: Market Dynamics & Competition

• Complete view of competitive landscape– What alternatives people have today

• Never dismiss your competition– Investors, customers, employees all want to know why

you are better, not why competition is bad

• Never say that you have no competition


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6: Unfair Advantage

• Why now? why us?

• Technology, secret sauce or magic behind product

• Special alliances, relationship that makes it possible to for you to do this, now


Positioning

• How are you different from incumbants

• Using familiar players to help position yourself


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7: Business Model

• How you make money

–who pays you

–what channels

–what gross margins

• What do you sell?– Subscription

– Widgets

– Affiliate fees?


8: Go-to-Market & Sales Strategy

• How will you reach your first 10 customers

• Marketing leverage points

• What alliances needed or in place

• Convince audience that you have an effective go-to-market strategy


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9: Financial Projection & Key Metrics

• What are key metrics & assumptions

– customers, installations, licenses etc.

• 5-year financial projection take into account extended sales cycle

– Show the spreadsheet please

• Your “ask”


10: Status & Timeline

• Current status

– Accomplishments to date (last ~6 months)

– Timeline (major milestones over next ~18 months)

– how the money will be used

• Can be used to show key metrics

– Employee growth

– Customer or geographies growth

– Profit point etc.


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Q2-’16Q4-’15 Q1-’16 2H-’171H-’17 1H’18

Z-Timeline

betas

e.g. 10 referenceable

accountsOr

Reach profitability etc.

Alpha customer

acquisition

Series B $7M

Start company

e.g. 1st

Prototype

Milestone #5

2H’18

Series A $4M

Milestone #3

Milestone #2

Milestone #4

e.g. 1st

alliance signed

Seed $100K

Q3-’16 Q4-’16

Product development

Prod Launch

Employee count 4 6 11 18 22 29 39 54Entrepreneurship All rights reserved © Naeem Zafar 38

handout are you investor pitch ready

Documents

naeem zafar professor

investorsvcs entrepreneurship

investorready pitching

investor ready

financial modeling

message ready crisp

ted talk ted talk

company xcat