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How to Create A Killer Business Plan and Financing Pitch

How to Create A Killer Business Plan and Financing Pitch. Christine Comaford Managing Director. Bio. Engineer, entrepreneur, venture catalyst 5x entrepreneur, 2 IPOs, 3 M&A, $100 million raised in last 5 years

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How to Create A Killer Business Plan and Financing Pitch

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  1. How to Create A Killer Business Plan and Financing Pitch Christine Comaford Managing Director Artemis Ventures, LLC 1998

  2. Bio • Engineer, entrepreneur, venture catalyst • 5x entrepreneur, 2 IPOs, 3 M&A, $100 million raised in last 5 years • Venture Catalyst specializing in Enterprise software & Internet enabling technologies • 1 other partner Kimball Atwood Artemis Ventures, LLC 1998

  3. Did You Know? Most business plans are never read by a VC partner? Artemis Ventures, LLC 1998

  4. Artemis Ventures, LLC 1998

  5. Did You Know? VC investments in Internet firms by 1H99 were over $6 billion -- nearly 2x of 1998 TOTAL! Source: IDC Artemis Ventures, LLC 1998

  6. Did You Know? The #1 reason a startup’s valuation is cut is an incomplete executive team Artemis Ventures, LLC 1998

  7. 7 Steps to A Compelling Business Plan & Financing Pitch Artemis Ventures, LLC 1998

  8. Know the Risks to Address • Financial • Market • Technology • Team Artemis Ventures, LLC 1998

  9. 6 Things You Must Have • Stable, working business models • Good business plan • Competent management • Great vision • Big markets • Good team Artemis Ventures, LLC 1998

  10. Business Model Components • Markets & Customers • Profile and Segmentation • Key Pain Points • Size of the Problem in Dollars • Location of those Dollars • Competition • Products & Services • Product Definition • Value Proposition • Total Cost Analysis • Add-on Product Strategy Artemis Ventures, LLC 1998

  11. Business Model Components (cont’d) • Marketing & Distribution • Marketing Strategy • Sales Process • Implementation Process • Strategic Alliances • Financial Engine • Pricing Model • Revenue Model • Cost Structure Artemis Ventures, LLC 1998

  12. 1 - State Credibility • Exec team • Pedigree (education, past startups) • Publicity (published pieces, notoriety, awards) • Connections (technology advisor to White House, etc) • Well-known board members, advisors (who are betting on this company) Artemis Ventures, LLC 1998

  13. Who You Need On Your Team • Visionaries (assorted positions) • Leaders (CEO, Managers) • Implementers (Sales, Marketing, Technology) • Infrastructure Builders/Supporters (Operations) Artemis Ventures, LLC 1998

  14. 2 - Be Clear • Have 3 key points to deliver • Show and tell your story (use words AND pictures) • Repeat the 3 key points at least 3 times • Only tell stories that enhance your points Artemis Ventures, LLC 1998

  15. 3 - Be Concise and Complete • Why is this a great idea? • How will it be executed? • How will risk be minimized, return maximized? • What are the sustainable barriers to entry? • 20 page plan (3-5 page exec sum with 1 page financials) Artemis Ventures, LLC 1998

  16. Complete Means… • Pain/Solution • Opportunity/Market Size/Market Analysis • Competitors: today and tomorrow • Product/Service Definition & Futures • Marketing Plan/Sales Strategy/Strategic Alliances • The Team: staff and extended • Financials (create a dynamic model) Artemis Ventures, LLC 1998

  17. 4 - Be Compelling • This is a HUGE opportunity, we’re the best to seize it, here are 3-5 specific reasons why • You think this opportunity is HUGE today? Check it out in 2-4 years! • There is major PAIN, we remove it -- no doubt • We have the team, technology, right market, “just add water” Artemis Ventures, LLC 1998

  18. 5 - Give Them a Reason to Believe • Create the excitement (greed), then… • Convey the long term vision (wow! Look at all the additional markets we can get into!), then... • Spell out the short term practicalities (hey -- these guys look like they could actually make this happen!) Artemis Ventures, LLC 1998

  19. 6 - Give Them the Right Info • What is your elevator pitch? In other words if you had to tell someone about your company on a short elevator ride, what would you say? • What product or service is sold? • Who is it sold to? • How much does it cost (average sales price)? Artemis Ventures, LLC 1998

  20. Right Info Cont’d • How big is the target market? • What percentage of that market do you need to penetrate to reach $30 million in sales? • What is your key competition? • What is your KEY differentiation from the competition? Artemis Ventures, LLC 1998

  21. Right Info Cont’d • How long would this differentiation last? • Do you have customers? How many? • Revenue? How much? • Strategic Alliances? With whom? • Is your technology complete? If not, when? Artemis Ventures, LLC 1998

  22. 7 - Present Properly • Practice and know it cold • Have backup slides for key areas (such as market segmentation, financials) • Be ready with a reference list (for all key execs, both personal and customer references) Artemis Ventures, LLC 1998

  23. How Long Should a Pitch Be? • A VC pitch should be 20 minutes long (goal: book next meeting) • A customer pitch should be 30 minutes long (goal: convince them to bring the decision maker in) • A recruiting pitch should be 30 minutes (goal: check them out,sell the vision, decide next step) Artemis Ventures, LLC 1998

  24. Rx for Not Naturally Born Speakers • Best speech coaches: Silicon Valley: Steve Mandel 408 475 8202 Boston: Cheever Communications 781 639 1516 Artemis Ventures, LLC 1998

  25. Great Entrepreneurial Resources • Read “Burn Rate” - Michael Wolff • Read “High Tech Startup” - John Nesheim • Check out www.vfinance.com, www.startupweb.com • www.artemisventures.com resources section has growing library of goodies Artemis Ventures, LLC 1998

  26. Entrepreneurial Resources Artemis Ventures, LLC 1998

  27. Do You Have These? • Right market • Right product/service • Right timing • Right info • Right priority • Right connections • Right team Artemis Ventures, LLC 1998

  28. Thank You Q & A/Lab Time Christine Comaford General Partner and Managing Director Artemis Ventures, LLC 1998

  29. Good Idea? Bad Idea? Your startup is HOT! You do 3 VC pitches and also get some fabulous press. 10 more VCs call you, and you book meetings with them. Artemis Ventures, LLC 1998

  30. Good Idea? Bad Idea? You get 2 term sheets for a $3mil investment both from 2 high value VC syndicates. One is for a $6mil pre money valuation and 1 board seat. The other is for an $8mil pre and 3 board seats. There are a total of 5 board seats. You choose the $6mil pre. Artemis Ventures, LLC 1998

  31. Good Idea? Bad Idea? Your startup’s product/service is nearly ready for beta. You can take $1mil to get through the beta, sign on a few customers, and make a few key hires, OR you can take $3mil to do even more. With the $1mil you’ll need to start fundraising again in 3 months, with the $3mil you’ll start fundraising in 12 months. You take the $1mil. Artemis Ventures, LLC 1998

  32. Good Idea? Bad Idea? You have a skeletal exec team -- operations and technology only. You’ll hire a CEO, sales, marketing and business development once you’re funded. You set aside 15% of your pre-financing stock for the option pool. Artemis Ventures, LLC 1998

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