The Business Plan and Other ‘Riveting’ Documents September 2012

1. The Business Plan and Other ‘Riveting’ Documents September 2012 Jim Poage President and CEO

2. Pop Quiz • I want to start a new venture because: • My invention/discovery will help mankind. • I want to build a company dominant in the market. • I want to get rich. • All of the above

3. The Elevator Pitch • Origins in “.com” period around 2000 • Short pitch which tells potential investor about the deal • Objective is to get an invite to present the deal • Could be investors ‘first cut’

4. Key Elements • Early ‘hook’ • Brief description of the product or service • Revenue model • Management team • Competition • Competitive advantage • Call to action

5. Coaching Tips • This is “one-on-one” • Show passion • Show confidence • Minimize hyperbole • It’s a business deal not an invention • Google “elevator pitch” Practice, practice, practice

6. The Elevator Pitch • Turn to someone you don’t know • Right now: Most important person in the world • 60 second pitch

7. Recommended Documents Sales Exercise • (In order of importance) • Investor Presentation • Elevator Speech • Business Plan • Executive Summary • One Page Summary • Customer Brochure

8. Recommended Documents • (Probable Chronology) • Elevator Speech • Business Plan • Investor Presentation • Executive Summary • One Page Summary • Customer Brochure

9. AttractiveInvestment? Market Technology Management Venture Investment 101 • What they want to know • What is the technology? • How big is the market? • Who is on the Management Team? • Is this a good deal?

10. Investor Presentation • Single most important aspect of fund raising • Play to your audience • Be respectful of time • Business attire • Objectives: • Not to close the deal • Invitation to ‘talk’ • Build investor confidence in you

11. Typical Pitch Timing • Presentation: 20 minutes • Q&A: 20 minutes • Investor discussion: 20 minutes • You’re not in the room • BTW: This is a ‘somewhat’ universal format for angel groups

12. The problem? Product/Service Value proposition Market Competition Competitive advantage Management team Revenue model Revenue received Funding request Uses of funding Funding milestones Pre-money cap table Content Elements Not an outline

13. Technology Content Timing • Every deal is different • It’s your message and your deal • However, • Management • Technology • Market • Financials

14. Coaching Tips • Show passion • Show confidence • Demonstrate knowledge • Minimize hyperbole • Name dropping • It’s a business deal not an invention • Presentation Team members • Consistent team attire

15. More Coaching Tips • Graphics, color, & photo’s • No hard to read slides • 10-20-30 rule • Do not read the slides • Watch the audience • Well choreographed • Numbers all ‘foot’ • Copies for audience • “show & tell” • Practice timing

16. Q&A Coaching Tips • Short direct answers • No ‘piling on’ • Backup slides • Cheat sheet • Curve balls • May be asked for a term sheet • Avoid technical discussions • Don’t get defensive or angry

17. Après-Presentation • Do a post mortem on each presentation given • Build an inventory of slides • Be prepared to give many presentations • Remember you are only looking for a few investors • Expect ‘stay in touch’

18. Why a Business Plan? Business Strategies Product Development Sales & Marketing Financial Others Management in sync (Equity Funding World) Sell the venture Due Diligence

19. Preliminary Remarks No proprietary warnings About 20 pages without exhibits About 6500 -7500 words 10 or 12 pt Times New Roman Spellchecker Flesch-Kincaid Readability <30 Table of Contents and page numbers Sell the Deal!

20. Technology Detailed description of the problem Set up the Value Proposition What is the solution 5th grader rule Product Description FeatureFunctionBenefit Intellectual Property State of Development

21. Great Place for Graphics Market Market Need Market Size Competition Direct & Indirect Differentiators Pricing Strategy Sales Strategy and process Revenue sources

22. Many investors bet on the jockey not on the horse Management Team Who is on the team Domain Expertise Entrepreneurial Experience Board of Advisors

23. Attractive Investment Pro Forma P&L – To Exit (5-7 years) Assumptions driving the numbers 20X N5 Pro Forma Balance Sheet Cap table Funding Request Pro Forma Cash Flow The ‘Deal’ and Liquidity Events Use of Funds Integrated timeline

24. Alpha Beta Production Hire Sales 1st Sale Sign 1st Distr $20 $110 $15 $120 $90 $205 $135 $350 $150 Integrated Timeline ($K) Year 1 Year 2 Year 3 Development Sales & Mkting Continued Sales Cash Investment

25. Cosmetics & Presentation Lots of graphics and color Puppies & Kittens Professional binding with heavy paper Double sided printing May want to consider a Marketing Communications advisor The objective is make it easy to read

26. I Know you can’t Read this but…

27. I Know you can’t Read this but…

28. Title Options 1. Title is the TOPIC 2. Title is the answer to the question: So What? Sums up the slide

29. Read the first paragraph Look at the financials $ Revenue line Look at the Management Team Is there a ‘hook’? How much & 20X N5? Can they pull this off? What really happens

30. Biggest Mistakes by Entrepreneurs • Too much on the technology • Too little on the Management Team • Failure to abide by the ‘5th grader rule’. • Failure to articulate the Value Proposition • “There is no competition.” • “This assumes only a 1% market penetration.” • Too much or too little detail on the Pro Forma • Does not state ‘The Deal’

31. The Elevator Pitch • Lets go back • Turn to the person that you pitched to • Tell them one word (no hints) • Your name is ______

32. Jim PoagePresident and CEOStartech210.458.2523jbp@startech1.org