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Fundamentals of an Investor Pitch

Fundamentals of an Investor Pitch. Steve “Zam” Zamierowski Tech-Venture Center Director Deloitte Zam@Deloitte.com. The material in this presentation is that of the presenter and does not necessarily represent the opinions of Deloitte Services LP or the Cleantech Open. Sell the Story

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Fundamentals of an Investor Pitch

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  1. Fundamentals of an Investor Pitch Steve “Zam” Zamierowski Tech-Venture Center Director Deloitte Zam@Deloitte.com The material in this presentation is that of the presenter and does not necessarily represent the opinions of Deloitte Services LP or the Cleantech Open

  2. Sell the Story Get the Next Meeting The Pitch • Title Slide • Market Problem • Solution and Technology • Business Model • Sales & Marketing Strategy • Competition • Management Team • Financials • Current Status • Sustainability & Close

  3. Title Slide • Introduce yourself to establish credibility • Elevator Pitch • Macro Problem • Macro Solution The End • Power supplies are in all electronics • One tenth the size • Half the cost • Three times more reliable

  4. Initial Market Opportunity • Macro Trends • Lighting is 20% of global energy usage • $20B A19 bulb market • Regulations forcing shift from incandescent • CFLs not meeting consumer requirements • Problem/Opportunity • LEDs hold promise for replacement bulb market, BUT power supply is limiting factor • Brightness limited to 60 watts • Reliability • Price

  5. Customer Requirements and Validation • Bulb manufactures need LEDs • 60-100 watt output • longer life • Less than 1 year RIO from energy savings “LED lighting is the future; This technology is clearly a key enabler” “This could be very timely; power supply cost is becoming a major challenge, LED costs are declining but power supply components are already commoditized”

  6. Solution • 60 – 100 watt output • More space for heat sink • Reliability • Elimination of the most common point of failure and life-limiter results in 3X life • Cost • ½ the components and no hand assembly leads to 50% reduction in cost • And customer RIO from energy savings of less than 1 year

  7. Technology/Invention • What’s the underlying invention or breakthrough • Is it patented • What are the barriers to entry Exclusive option to license 2 dominant VHF patents Integration 0.1 1 10 100 Speed (MHz)

  8. Market Size • A19 Power Supply • Annual shipments of 450,000,000 A19 LED bulbs by 2013 (source) • ASP = $3 • Annual market = $1.35B • OnChip’s product will increase demand

  9. Business Model • What: power supplies to LED bulb manufactures • Outsourced manufacturing in existing semi fabs • Who: initially to emerging innovators and then to established leaders • How: Direct to manufacturers • Sales VP is key hire • Price: $3.00 with 50% gross margin • Maintain 50% margin with price and costs fluctuations

  10. Focused Sales & Marketing Strategy • Who will be your first customers • What market segment • How will you find them • How will you get there attention and time • Why will they buy from YOU • How will those first customers lead to more

  11. Competition, now and anticipated High US • OnChip has three • Size • Reliability • Price Them Most important customer benefit Them Them Second most important customer benefit High Low

  12. Management Team (next 1-2 fundable events) • Management Team • How each of them are qualified to accomplish specific tasks to reach your milestones • Wholes/Key Hires • Advisory Team • Only active advisors • Get industry leaders involved

  13. Financial Projections (3-5 Years) • Bottom Up, Not Top down • Revenue = Units x ASP • Include number of customers/partners • Costs include • Head Count: fully loaded • Productivity assumptions • COGS • Cost of sales and marketing (2-3x expected) • Capital equipment and G&A • Cash flow break even is not the main goal, being a market leader is. The specific numbers are less important than the assumptions!

  14. Status and Funding Requirement • Honest assessment of product/service readiness • Honest customer feedback or sales • Capital amount being sought • Needs to take you to the next fundable milestone • What that capital will fund • # months • Current and follow-on produce development • Key hires • Sales (# customers and revenue) • Follow-on Funding and milestones

  15. Product Development Roadmap and Funding DC-DC Product Dev’t Growth , Value Laptop PS Product Dev’t R&D Advanced Devices Prototype DC-DC LED Driver Engineering Samples LED Driver Scale-up (bulbs) LED Driver (fixtures) Q3 2010 2011 2012 2013 2014 2015 A Round: $5 M Seed: $1.5M First Revenue from LED Driver Sales First Laptop Power Supply Sales LED Driver Samples Available

  16. Close: Ask for the Sale! • Environmental Stewardship: How will your company contribute to a healthier Earth? • Product/service impact • OnChip: reduction 16% of energy usage and CO2 emissions by 470 million tons annually • Company’s environment impact and use of natural resources – include in written plan • Social Responsibility: include in written plan • Ask the judges to make you a finalist • How will winning the Cleantech Open help get your company to the next milestone

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