Presentation on theme: "ABOUT ME The life of many start-up InnovaHub The four S of Innovation 4 types of innovators Individuals that inspire through their wishes innovation."— Presentation transcript:
The life of many start-up
InnovaHub The four S of Innovation 4 types of innovators Individuals that inspire through their wishes innovation Professionals that utilize their skills and knowledge to propose innovative solutions for a prize. Inventors or innovators that seek to to sell, license, or fund their inventions. Entrepreneurs, organizations, and investors that are looking for new ideas, solutions, or inventions. Seeders Solvers Seekers Sellers
InnovaHub The 4 Personality Styles Amiable Analytical Extroverted Pragmatics
What You Need To Know About Raising Venture Capital
8 What Makes A Company Successful? How you finance your company matters! Team Idea Finance
9 Is VC Right For Your Startup? Scalability of Business Capital Required to Achieve Breakeven Cash Flow High Low High Low Venture Capital Build a Giant Co Bootstrap Own 80% of a Small Co Not Viable Weak Barriers: Venture Capital Strong Barriers: Bootstrap
10 Why VC Is Helpful? Friends & Family Angels Venture Capitalists Capital Advice Connections LowHigh
11 Are You Ready For VC? Great Team Huge Market Product in Market Seed ($50K - $1M) X Series A (>$1M – 5M)
12 How Do You Get The Meeting? Mutual Contact LinkedIn Cold Spam Most Effective Least Effective Direct Introduction
13 What Is The Objective Of The First Meeting? To get the second meeting. What is the objective of the first meeting?
14 How Can You Guide The Meeting? Product? Market? Competition? Team? Typical Non-Linear MeetingSet The Tone Up Front Product: Technology that solves… Addressable Market: $2.5B Competitive: Significant technology barrier Team: 35 years relevant experience
15 How Can You Maintain Momentum? Industry News Milestones Internal Materials
your idea… question can you do an elevator pitch?
and an audience…
to be inspired…
3 keywords and your name describe your idea to
introduce yourself and...
start with something catchy a rhetorical question, a picture, a story, an example or any exciting information.
picture your idea an effective elevator pitch is illustrative and tangible.
introduction 15sec problem 30sec vision 30sec requirements 15sec
MAKE YOUR IDEA UNDERSTANDABLE
be concise An effective elevator pitch contains as few words as possible and does not go into too much unnecessary detail.
be confident have fun show passion show integrity YOUR ATTITUDE
your pitch should be clear rather than being filled with …
APPEARANCE dress as usual and feel yourself comfortable
keep your eyes shut while someone reads your text out loud
10 Erogenous VC Zones 1. Elevator Pitch 2. The Problem 3. Your Solution 4. Market Size 5. Business Model 6. Proprietary Tech 7. Competition 8. Marketing Plan 9. Team / Hires 10. Money / Milestones Money Shot Goes Here Teaser Image Goes Here
Business Model (How Do You Plan to Make Money?) Describe Top 1-3 Revenue Sources –Prioritize by Size, Growth, and/or Potential –Cite current market activity / customer behavior as proof Show How You Get to Break-even (or Profitable) –Ideally, on the current round of funding youre raising Common Revenue Models –Direct: ecommerce, subscription, digital goods, brands –Indirect: advertising, lead gen, affiliate / CPA
Proprietary Tech / Expertise (What is your Unfair Advantage?) VCs *really* like unfair advantage –big market lead –experienced team –ex-Google PhDs –core / breakthrough tech –defensible IP / patents –exclusive partnership –great sales/marketing
Competition (+ why they all suck, why youre different, yellow, better) List all top competitors –(especially top ones; well find them anyway) Say how youre better, or at least different –If not better or different -> NICHE TO WIN –position(-ing) matters 2-axis graph is trite, but still useful –see next page for example useful comparisons / differentiation: –simple vs complex –value vs cheap (tougher to prove tho) –cheap vs expensive (but careful you dont race to bottom) –consumer vs enterprise –open vs proprietary (in this case, open usually better… but not always)
Economics of VC Firm Management Fees (typically 2-2.5% of AUM) – Charge a management fee to cover the costs of managing the committed capital. Carried Interest (typically 20-25%) – "Carried interest" is the term used to denote the profit split of proceeds to the general partner. Example $100m fund – 4x return and 2 and 20% – $2m per year in management fee – (($100m x 4) - $100m) * 20% = $60m in carried interest
What do VCs want This depends on stage – let s focus on early stage since that is what we do. – Team Domain expertise with core technical strength and knowledge of given market opportunity History of collaboration and success A willingness to allow VC s to help build the team – Market Emerging and fast growing market Bad markets make for bad companies – Business model How will you make money, how will you sell – Technology Defensible technology/IP that can be protected to form competitive barriers over time
What Should Founders Expect: Reduce Prob. of Failure Codified best practices – FP&A/budgeting, KPI, templates, back office infra Acceleration – Shorten cycle time for hiring, partnering, selling, PR, capital raising Objectivity and Insight – Sanity check, check and balance
Suggested Playbook Be committed…. Hire a great Valley lawyer Figure out what stage and sector you are Identify 4-5 firms that focus on this stage Identify which partner you think is most relevant Get an introduction to that partner Prepare a 1-2 page overview to send him/her Prepare a slide presentation to give in a minute timeframe if they ask you to present Only goal of the first meeting is to get a second meeting.
What to Expect week process – First meeting to close – 1 st mtg diligence partner meeting TS negotiation close Prepare Investor Package – Presentation – Financial Plan – Personal references – Customer references – Market references – Cap Table – Market research – Product documentation – Competitive Analysis Investors will seek: – 20-50% of the company – Valuation function of targeted raise, ownership, and stage, – Preferred Equity securities, with key terms: BoD seat Liquidation Preference Anti-dilution Protection Participation Pro Rata rights Protective Provisions Vesting terms for founders and employees
What to Consider Is the idea sufficiently baked? – Optimal time is 6 months of iteration Pick your co-founders very carefully Test fit with VC – Personality, values, knowledge of market Optimize for best deal not best price Consider the downstream effects of the financing – High-post moneys can by Pyrrhic victories if company misfires – Angel financing can be a mixed blessing – be careful
Approaching VCs Investing is a people business, and getting a meeting is all about who you know Best way to approach a VC is some form of introduction – If you don t know a VC, find someone who knows you who does and get them to introduce you – Entrepreneur, professor, attorney… – Sending a plan to is a waste of
Tips Don t take rejection personally, the odds are against you. Every VC is interested – force them to do work to test their level of interest. Don t waste time trying to change the mind of someone who says no. Don t shop to multiple partners in a firm if the first rejects you. Don t ignore the junior partners – they can really help. There are lots of VC firms, focus on a firm that has some connection to you.
71 Better-For-You Mints Decisions That Drive Product Success What is the right attitude? What is the right emphasis? Tagline Custom pack - or will a standard form do? Which package type best fits the positioning? Packaging The team has generated dozens of names which have been narrowed to 18 Name What is the right sentiment? Driven by convenience or throughout the day dosing? Consumer Insight What product line offerings combine to maximize appeal and support the concept? Functional Variety What product form best supports the concept? Traditional or new? Simple or special? Product Form What is best articulation and focus of the benefit? Convenience? Better than mints?, Boost when needed? Umbrella Benefit
73 The Content Matrix Tagline2 2 A fresh perspective on wellnessv1 better breath | better bodyv2 breath protection | body fortificationv3 Fortified confidencev4 Fresh breath and beyondv5 Fresh breath never felt so goodv6 Live tastefully wellv7 Mints that make a differencev8 The better-for-you mintv9 The mint with morev10 Consumer Insight3Umbrella Benefits4Functional Variety (show 3)5Product Form6Packaging7
74 The Content Matrix Consumer Insight3 3 I am happy to see that grocery products and restaurants are paying more attention to healthier ingredients. It gives me more options to lead a healthier lifestyle. v1 I have a busy life. I wish there was a more convenient way to supplement my diet with a nutritional boost - when I need it, wherever I am. v2 I like to think that I lead a healthy life. I'm sure I could benefit from getting more key nutrients in my diet, but who has the time to figure out a regimen, let alone follow one? v3 I'm too busy to be a health nut. But, given easy options like drinking diet cola instead of regular, I'm likely to choose the healthier option. v4 Little by little I am making small choices to lead a healthier life, like taking the stairs at the mall instead of the escalator. I believe these small choices can add up. v5 They say small meals and healthy snacking throughout the day is better for your body. Then why do I take supplements only once a day? v6 Umbrella Benefits4Functional Variety (show 3)5Product Form6Packaging7
75 The Content Matrix Umbrella Benefits4 4 [name] are the most convenient way to get the fortified nutrients you want for specific wellness benefits. v1 [name] deliver targeted nutrients to your body for specific wellness benefits throughout the day. v2 [name] freshen your breath while delivering nutrients to help strengthen your body's systems when you need the support. v3 [name] help support your body's critical systems while naturally freshening your breath. v4 Unlike typical candy mints, [name] is fortified with targeted nutrients. Its another smart choice you can make that leads to a healthier lifestyle. v5 Why eat regular mints when you can get fresh breath PLUS wellness benefits from the fortified ingredients of [name]? v6 Functional Variety (show 3)5Product Form6Packaging7
76 The Content Matrix Functional Variety (show 3)5 5 Antiox - a balanced blend of 7 key antioxidantsv1 Bones - Calcium, Vitamin D, and Soyv2 Calm - B Vitamins, Omega-3, St. John's Wortv3 Cardio - Vitamin E, Omega-3, Cranberry Extractv4 Dental - Green Tea, Calcium, and Xylitolv5 Digestion - Peppermint Oil, Ginger, and Chicory Rootv6 Digestion - Probiotics and Prebiotic Fiberv7 Energy - Vitamin B and Taurinev8 Immunity - Vitamin C, Zinc, and Ginsengv9 Skinny - Green Tea and Chromiumv10 Smarts - Gingko Biloba, Ginseng, Omega-3v11 Vitality - Vitamins A, B, C, D, and Ev12 Product Form6Packaging7
79 The Content Matrix (7.8 million concept alternatives)
80 The Content Matrix (7.8 million concept alternatives)
81 The Content Matrix (7.8 million concept alternatives)
82 Top Concepts Top Concept 1 Why Not? Place TC1 Image Here 2.32 x 3.25 Top Concept 2 Nutrition Place TC2 Image Here 2.32 x 3.25 Top Concept 3 Easy Help Place TC3 Image Here 2.32 x 3.25 Top Concept 4 Smart Choice Place TC4 Image Here 2.32 x 3.25