Your “Financial Pitch” Getting your financing organized Making your “Killer Pitch-deck” PPT for Investors Some tips, advice and secrets to think about…

What we will talk about today What to think about before you think about raising money High Concept Pitch – which comes from your Killer Pitch-deck! What types of Investors are there? What the Investors are thinking about you Making your ‘Killer Pitch-deck’ (12 - 15 slides to sell your story effectively!)

What to think about first There is no magic formula for getting financing Know where your “hub” or ‘cluster’ is Pick a great co-founder Important values - Intelligence, Energy, Integrity Pick a big market AND KNOW IT IN NUMBERS! Have a “Minimum Viable Product” (MVP) - be passionate about it Iterate to Product / Market fit Raise money from people you trust; keep control Scale

Start building your ‘traction’ Test your market! Markets are relatively efficient - so you are likely wrong at first pass Buy ads against non-existent product to sell “Coming soon” Talk to the customers directly Ship immediately and often Go for the low-end of the market as you get started! Find it, use it, own it!!

Learn about Investors! Trust people they have backed Know within 5 -10 minutes (usually) Market is hit-driven Resist outside CEOs Valuation is irrational

Are you sure about getting involved with Investors? Investors demand certain types of legal structures Exits are much harder Usually don’t look at cash-based businesses Committee-based strategy Hiring pressure Valuation is temporary : Control is forever

Traction talk gets the conversation started! Traction – WHAT IS IT? You need to tell a story with numbers You Social Proof (who is involved with your business, where your product is selling etc.) Product Market (What you are already doing!) High Concept Pitch (Financial Pitch) Elevator Pitch Presentation (“Killer Pitch-deck”)

Types of Investors Bootstrapping! (F, F, F’s) Banks Crowd-funding Angel Investors Super Angels Venture Capitalists (VC’s)

Bootstrapping You should already know this! Friends Family Fools

Banks See Ibu Suryani in Incubator for more details! There are banks that support Entrepreneurs and specialize in startups!

Crowd-funding Definition – Wikipedia Google ‘crowdfunding’ YouTube videos (there are a lot!) - http://www.youtube.com/watch?v=OI-bTpbkH4Y&feature=related Example of business that used crowdfunding successfully - http://www.entrepreneur.com/video/222633/smart Websites that do crowdsourcing for funding (there a many): http://www.kickstarter.com/ http://www.microventures.com/ http://www.lendingclub.com/ Crowd funding is now emerging from Hong Kong…

Angels Individuals who invest their own money into Startups Generally invest a limited amount every time Usually invest alongside other investors High risk tolerance; often invest before proven market traction Make quick decisions (usually within 1-3 meetings) Often are former entrepreneurs or startup executives Usually make between 2 - 10 investments per year Unlikely to care about controlling rights Find the list of Angel investors for your market

Super Angels (or Micro Venture Capitalists) Individuals or Small fund who invests other people's money into Startups Fund size is usually in many MillionsUSA$$$ Similar investment amount as Angels (but it comes from a Fund, not personal money) Usually invest alongside other investors High risk tolerance; often invest before proven market traction Make quick decisions (usually within 1-3 meetings) Can make between 5-20 investments per year (some will do even more) May not care for controlling rights in companies they invest in Find the Super Angels in your market

Venture Capitalists (VC’s) Members of a fund (can be between 1 and 20+ partners at one fund) who invest other people's money into Startups Fund size varies between $300M to $4B Generally invest more than $1M at a time Often want to have a major portion of the round Lower risk tolerance; rarely invest before proven market traction or in unproven entrepreneurs Have pre-determined process for decision-making (between 3-6 weeks) Will take board seat or retain some controlling rights in companies they invest in 1-2 investments per partner per year

What type of Investor should you target? Kitchen Table – BOOTSTRAP – Family, Friends and Fools… Research what local BANKS can do for you - new policies (women, green, social) but know what the ‘terms and conditions’ are See if Crowd-funding will work for you First time startup getting traction – ANGELS First round of non-family financing – ANGELS Once you need more than $1MillionUSA - VC’s - but make sure you have your mentor/investor relationships in place first! This takes time to build…. VC’s usually don’t meet with Entrepreneurs - and they won’t consider Entrepreneurs unless you already have used Angel investing - but they will talk with your BoD! The VC’s advise you on how to do your fundraising! In Indonesia - Tech Investor - Raja Capital - http://www.rajacapital.com/ More Tech Investors - http://en.dailysocial.net/post/a-simple-list-of-indonesian-tech-investors Plenty of information with Google…… :-)

CHALLENGE 1 Post a Google URL of an Investor for class Facebook page by the end of this day 23:59 No duplicates in information Identify what sector the Investor works in Identify two startups they have already invested in – EXTRA POINTS FOR SPECIAL ASSESSMENT

How much money$$$ should you ask for? Raise as much money as you need to get to your next milestone! Make it so you can stay ‘alive’ for the next 12 - 18 months During this time, when you are running out of cash, it is called ‘the runway’ - like a plane, getting ready to take off!

This is what your Investor will want to know about you If you are efficient with $$$Capital If you can fulfill orders to market (Capacity) If you already have products in market If you have clear insight on what works If your team is “battle-tested” If you have concrete ideas on how much $$$ you need

The Investor is still thinking… Is this a big market opportunity? What is the problem you aim to solve? Does your solution evince credibility? Could I imagine wanting to use this? How will you get distribution? What’s the deal with the team? How is this different from competition? How will this make money / get mass adoption? Are you serious on execution?

In your tool-kit you must have… Great Tag Line Elevator Pitch High-Concept Pitch…(15-20 minutes) max “Killer Pitch-deck” (10-12 slide Presentation)  1-Page Executive Summary (captures all of your important information on your business – summary of your Killer Pitch-deck) Intro E-mail (you send this to an Investor to start the relationship…)

Great Tag Line Make it memorable!

CHALLENGE 2 RIGHT NOW + next 10 minutes! Twitter - @ZenParry Write a summary of your business idea in less than 20 words and post to Facebook PER TEAM – I entry! (Hint: this is your business tag line!) Twitter - @ZenParry EXTRA POINTS FOR SPECIAL ASSESSMENT

The Elevator Pitch “WHAT HOW WHY” Focus on the problem Forms first impression of your venture Like a good TV or radio commercial! “WHAT HOW WHY” A lot of great examples on YouTube: http://www.youtube.com/watch?v=Tq0tan49rmc&feature=related http://www.youtube.com/watch?v=jEd0fjXsk8w http://www.youtube.com/watch?v=-6ggSQCM1ug&feature=related http://www.youtube.com/watch?v=dqIEE-g_-Uc&feature=related Focus on the problem Tell a story! - Use simple language Have a great closing - PRACTICE A LOT!

CHALLENGE 3 DURING NEXT TWO WEEKS UNTIL Wednesday 17 Oct - Pitch Faculty, Facilitators and/or Ibu Zen in UC! Make it a team effort (so that everyone is involved – not just an individual!) Document the ambush then upload to your class FB page! Video, pic, email evidence!! EXTRA POINTS FOR SPECIAL ASSESSMENT

High Concept Pitch (Financial Pitch) RAISING $$$ – say how much you have already raised and how much more you are asking for PRODUCT/SERVICE – describe what this is, very clearly, short sentences, and mention your website, Facebook page etc. TRACTION - Tells what you are currently focused on, what growth you have had (Sales, Customers, etc.) USE NUMBERS! SOCIAL PROOF - Tell who is already committed to the project for financing, and if they are important people, tell where they have invested in the past. Also tell about your Advisory Board TEAM - Talk about your management team MARKET - Describe your market – major players, minor players What are your differentiators (features, unique selling point etc.) Competitors Market feedback Who you are targeting and why this is different to your competitors

Make your “Killer Pitch-deck” An example of a 12 slide deck #1 - Introduction #2 - Problem #3 - Solution (with a Demo!!) #4 - Market size and value #5 - Business Model – how you will make money! #6 - Distribution (& Marketing) #7 - How special are you? #8 - Competition #9 - Team #10 - Funding status (Money and Milestones) #11 - Last slide (final memory) #12 - Appendix of possible questions

You know how to do this slide! #1 – Introduction slide You know how to do this slide!

Example Slide – Introduction slide “academy of you”

#2 – State your problem This slide should be simple and easy to understand! Every time you do this slide, investors should nod their head that this is a problem. Secret tip – Identify what is the problem? Who has this problem? How many have the problem? How do you know?

Udemy lets anyone create an online course. For free. Example Slide – Stating the problem Problem: Online Education is Hard and Expensive Custom Integration Udemy lets anyone create an online course. For free.

#3 – State your solution Solution Demo or prototype Your Product solves big pain for specific customers…. Describe. Simple bullet list More detailed than Problem, but still simple Simple diagram also works Secret tip – describe why your solution: Makes customers very happy, does it better and different from anyone else

Example Slide - Giving the Solution content

#3b – Demo or Prototype Your passion for your demo should be obvious Have a good one, accept no substitutes Rehearse it until you do the presentation in your sleep Have at least 2 backup routes available Backup PC, iPhone or whatever Video YouTube demo If no demo, then at a minimum get a mockup or have a decent sample available! Your passion for your demo should be obvious

Example Slide – Showing demo of product udemy live

#4 – Market Opportunity Top Down – someone else reported it Analyst reports Comparables in the market Thought leaders Bottom up – calculate users/usage/revenue$ Average spend amount + $X Y customers in our market Average customer buys Z times per year Market size = $X * Y * Z annually = BIG MONEY Market growing at XX% per year Compare your ambitions with those of your future peers…

Example Slide – Showing the Market Opportunity Corporate Education $134B Education and Training $40B Online Education $52B 20% CAGR Platform for Many Markets Informal Education $9B Initial Focus Informal Online Education Total Education Market: $2 Trillion Source: Market Size from IBISWorld and MarketResearch.com

#5 – Business Model (How do you plan to make money?) # Describe Top 1 – 3 Revenue sources for your business - Prioritize by Size, Growth and/or Potential - Current market activity/customer behavior as proof # Show how you get to Break-even (or Profitable) # Describe your Revenue model: Direct:- Sales, Subscriptions, Digital goods, eCommerce Indirect:- Advertising, lead generations, affiliates Secret tip - “Three ways we make money”: Transactional (we charge for WXYZ services or from orders) Advertising (charge for click thru, or premium sponsored listings) Supplies (licensing, or charging other fees)

Example Slide – Business Model (how they make money) Business Model 20% of Sales Students Pay for Courses or Live Instruction Educators decide what to charge for and how much

#6 – Distribution (+Marketing) Code for “Marketing Plan” Show lots of channels, lots of decisions then choose a few key channels Make sure you can explain how your product will get to market and be ‘distributed’ Secret tip – 3 things that matter and must be measured: Volume Cost Conversion

Suggested Content: Distribution Information Online: Partner with fashion bloggers (for your fashion company) Google AdWords campaign (to specific regions) Generate SEO traffic via fashion listing pages Offline: Distribution partnership with ….. Where are they located? Contest? PR event (like a fashion shoe)?

Example Slide – Showing how their business is distributed Udemy’s Sustainable Growth Model Educators Create Courses Example: Ross Jeffries Educators Earn $ on Udemy Educators Promote their Course Online $ $ 2,000 Page Views to Ross’s First Course Most requested Feature. Students Learn on Udemy, and Share Udemy with Friends Udemy Rocks! Constant Twitter/Facebook Chatter since Launch

#7 – What is your UNIQUE advantage? Describe what is your advantage…. Do you have a great market share that nobody else has? Is your team exceptionally experienced? Are you making an amazing breakthrough product? You have IP or Patents or Proprietary Technology? An exclusive partnership? Great sales and marketing team? What is your ‘secret sauce’ that nobody else has? E.g. – you deliver on time or faster than anyone else because… WHAT IS IT THAT MAKES YOUR BUSINESS SO UNIQUE WITH A KILLER ADVANTAGE OVER EVERYONE ELSE IN THE FIELD?

Example Slide – TRACTION – what makes you unique! Traction Instructors 900 instructors have 1,600 courses Extremely active and passionate teacher community Half of our teachers ask for payment options Over 10,000 assets have been uploaded to Udemy Users 12,000 unique visitors per month 9,000 signups 600 daily unique visitors

Example Slide – TRACTION with numbers Example Slide – TRACTION with numbers! Traffic/Usage Assumptions (monthly) Traffic (in thousands) Monetization Assumptions Q4 2011 Unique Vistors 3,000,000 1/50 Create a Course 60,000 50% of courses paid 30,000 Average Cost per Course $20 Average Buyers per Course 30 Total Monthly Sales $18,000,000 TOTAL Monthly Revenues $3,600,000 Growth Assumptions Current Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Unique Vistors 20,000 60,000 100,000 300,000 750,000 1,500,000 3,000,000 Ratio of For-Profit Courses 0% 5% 10% 20% 40% 45% 50% Number of Buyers per Course 10 15 20 30

Example Slide – more TRACTION – Publicity!y “one of the most compelling features is Udemy Live” “online learners are certain to benefit… from Udemy” “A new kind of online classroom experience” “Udemy offers an experience that rivals the real classroom” “Enables anyone to teach online”

#8 - Competition Secret tip – Useful comparisons/differentiation List all top competitors (it makes you look like you know your business sector!) Say how you are better or at least different If not better, then what is your ‘niche to win’ What is your positioning – it matters! Make a graph – 2 axis – and show where the players are Secret tip – Useful comparisons/differentiation Simple v.s. complex Value v.s. cheap Cheap v.s. expensive Consumer v.s. enterprise Open v.s. Proprietary

#9 - Team Who are you & what have you done? Briefly, i.e. 90 seconds / founder or less If you have a technology based product, have the GEEKS onboard! Do you have Special skills on your team? What is your Entrepreneurial experience? Have you already created other companies? Sold them?? Sales/Marketing – who is doing this and what are they results/track record? Also identify – Key hires you will be making in the next year…. What roles you have candidates for (you will hire them when the funding comes through…..) Do you have job descriptions written for these positions? Estimated salaries?

Example Slide – Team photo and titles JUST JOKING!! Gangnum Style Team Top Management

#10 – Funding Status (Money and Milestones) Show 3 budgets – Small, Medium and Large Small – this is you now! You already have this…… What will you do with the capital? Key hires (how many extra people and what for) Marketing and Sales (how much money do you need to run campaigns to get extra customers and build revenues) Infrastructure (Scale-up) Achievable Milestones (Roadmap!) How will you get to next financial milestone Show break-even or profit with this funding Show relationship customers/revenues

Suggested Content: What you will do with the funding Asking for $250K in October 2012 Valuation of business $500K Angel Investors – Pak Denny, Pak Yo, Pak Ivan Build initial product line; functional use with 120 customers Use of money $100K: hire 3 x social media marketing experts, 1x customer support specialist, 1 x office manager, 1 x admin assistant $150K: market research, marketing campaigns and customer acquisition (buy lists) Goals and Milestones Get 10,000 customers, $250K revenue by April 2013 Estimated break-even in August 2013, with sales at $80K per month

Example Slide – showing what you will do with the money Fundraising Raising $1M for 1.5 years of runway Operational Capital 3 full-time team members Hire part-time System Administrator and full-time Front-end Developer (UI, UX) Goals Reach 1,000,000 unique visitors Reach $100,000 in monthly teacher sales Prove business model and sustainable user growth model

Suggested Content - Roadmap MAKE A GRAPH IN EXCEL or CHART What is happening over the next 6 quarters? How much headcount will that take? Will that really move the needle in terms of traction? What is happening over the next 6 quarters

Example Slide – Type of road map showing Break-Even Profit projections Six Quarter Outlook Dollars in Thousands Year Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Revenue $0 $8,000 $72,000 $480,00 $1,620,000 $3,600,000 Cost -$88,671 -$95,619 -$137,857 -$216,019 -$447,537 -$738,074 EBITDA -$87,619 -$65,857 $263,981 $1,172,463 $2,861,926

#11 – Last slide Leave them with something to remember you by! And as Steve Jobs always said: “Oh, and one more thing…” {Steve Jobs never had to ask for financing…..} http://www.youtube.com/watch?v=2-ntLGOyHw4 Make sure you put your contact information for the investor!

#12 - Appendix Have answers to potential questions already figured out

Killer Deck-Final reminders! MAKE SURE YOU HAVE ANSWERED ALL OF THESE QUESTIONS: How much are you raising? How long does this financing last? What markets do you think are most promising? What holes exist in your team (what talent do you need to hire)? Why won’t your competitors Business YYY or Company ZZZ be better than you? What makes you the right team to do this? 12 - 15 slides or less – 20 minutes at most – less is better! Keep it simple and sweet!

List of slides for “Killer Pitch-deck” – again! Your slides should be (in this order) - 1.  Intro – Quick short liner of what you do (elevator pitch). 2.  Problem you are trying to solve – how a problem exists, and how people find it painful 3.  The solution with Demo -  how cool is your product/solution is! 4.  Market size and value – how big is the market in users and in spending value 5.  Business / Revenue Model – how will you make money 6.  Marketing and Distribution plan – how will you grow your user base 7.  How are you special? – Technology or something else that makes you special 8.  Competition – how you stack up against them 9.  Your Team – how awesome you all are 10. Funding status – how much money you need and how will you spend it 11. Last Slide – leave them with something to remember you by positively 12. Appendix – Have answers to any potential questions and more details here

Example: Video of “Facebook” Pitch to Investors Video 33 minutes – An adaptation of the “Financial Pitch” before their Initial Public Offering (IPO) http://www.geekmarketer.com/videos/watch-zuckerberg-pitch-why-you-should-invest-in-facebook/ The video covers all of the key points: Market Opportunity Problem – Solution - Distribution (& Marketing) – Team – Competition – Execution – Demo - Business Model Some memorable lines……….Facebook helps you share what is important to you Timeline and Newsfeed You live through the communication of those things to the people you care about Each person has a story!

Examples of other High Concept Pitches (from TechStars USA) Go to YouTube and search on “TechStars Demo days” – you will see videos where teams have crashed and burned in front of the investors! From TechStars sessions Demo Day (< 10 minutes): http://www.youtube.com/watch?v=h56G31e0fD0 TechStars on Bloomberg.com television (This is a series and episodes are 45 minutes long): http://www.bloomberg.com/video/78212132-techstars-episode-6.html One TechStars pitch (<10 minutes): http://www.youtube.com/watch?v=w6tW0P0SFAg

Indonesian Incubators and Accelerators Kevin Mintaraga who founded Project Eden http://www.youtube.com/watch?v=TMDBRTzpzSk Project Eden http://eden.co.id/ On YouTube http://www.youtube.com/watch?v=TcU3fsHmlLk Startuplokal - http://startuplokal.org/# On YouTube http://www.youtube.com/watch?v=s0VF8UivFt8 On Facebook http://www.facebook.com/StartupLokal?fref=ts Merah Putih http://merahputih.co.id/ Idea Source http://ideosource.com/index.html (Auditions in Surabaya!) Singapore Government has program for Indonesia http://www.ida.gov.sg/Programmes/20120419161029.aspx?getPagetype=33 Global Entrepreneurship Program Indonesia (GEPI) http://www.gepindonesia.org/programs/

Other Incubators and Accelerators in the USA Y Combinator http://www.ycombinator.com/ 500 Startups - http://500.co/ More are listed here: http://www.forbes.com/sites/tomiogeron/2012/04/30/top-tech-incubators-as-ranked-by-forbes-y-combinator-tops-with-7-billion-in-value/ The focus for these Incubators is usually high-tech or “fast growth startups” There are many Incubators and Accelerators in the USA – search on Google

WORK ON YOUR PROFESSIONAL PRESENTATION SKILLS! Extra Resources Google for examples online of ‘Killer Pitch-deck” http://www.adamwaaramaa.com/fundraising/writing-your-pitch-deck/ Two creative PPT’s for a High Concept Pitch - http://investors.evr.st/ and http://investors.dressrush.com/ Interesting YouTube example: http://www.youtube.com/watch?v=wyrFWbGiGOc These guys are big time famous: http://www.businessinsider.com/airbnb-a-13-billion-dollar-startups-first-ever-pitch-deck-2011-9#-1 Guy Kawasaki’s Books & Blog on pitching Online article with good information: http://www.entrepreneur.com/article/220141 WORK ON YOUR PROFESSIONAL PRESENTATION SKILLS!

Challenge 4 Make your Killer Pitch-deck and submit to your Faculty Deadline – Friday 19 October 23:59pm EXTRA POINTS FOR SPECIAL ASSESSMENT

Terima Kasih…. You can ask me questions while I am at Universitas Ciputra until October 20. Send an email to set up a short meeting….. zenparry@gmail.com Facebook – zenparry@gmail.com Linkedin.com – zen parry Thanks to sources of content on Facebook, YouTube, Udemy.com (for their great slides) and other links on the internet Good luck developing your Financial Pitch and Killer Pitch-deck