Negotiating the Deal

New Venture Story Short narrative of factual or imagined events Emphasizes goals and merits of venture through the story Often personal in nature (when I was 18, I.. Stages Set the stage Introduce the conflict Reach a resolution

New Venture Story My father and I were very close. Even though he is alive, because of Alzheimer’s, he does not know me. I have invented a new test for early detection and treatment, but the FDA has been slow to respond. Early tests have shown good results for a low-cost medication that can slow the process but I need your help to complete the FDA certification. We need you on our team with your insights and money. Together we can save your father or mother a great deal of suffering.

Elevator Pitch 2-minute opportunity to tell a story Quickly demonstrates that the entrepreneurs know their business and can communicate it effectively Goal: get approval to proceed to the next step

Presentation Ten slides – 15 minutes Four Steps Establish credibility with investor Frame the goals of the new venture to be consistent with investor goals Offer solid, compelling evidence to support the plan Build a good relationship with investor

Presentation (9 questions) What is the product, what problem is it solving ? What are the unique benefits of the product ? Who is the customer ? How will it be distributed and sold ? How many people will buy it in year 1 ? Year 2? How much will it cost to design and build ? What is the sales price ? When will you break even ? Who are the key team members and how are they qualified ?

Presentation (10 Slides) Company name, presenter name, contact info Description of problem: need and market Solution: the product & its key benefits Business model & profitability Competition and strategy Technology & related processes Marketing & sales plan Leadership team Financial projections summary Current status & funds required

Negotiating the Deal Focus on describing the problem (take people out) Focus on the interests of the parties Generate a variety of options that advance interests of all parties Create a final decision based on fair and objective standards

Negotiating the Deal Entrepreneurs tend to value growth and success Investors tend to value ROI and time to harvest Investor Risks to reduce Market risk Technological risk Management risk