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VC Pitch Prep
Naeem Zafar
IEOR191
Class 10
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Agenda
Last class: Financial Model
Class speaker: Jeremy Jones
Pitching to VCs & investors
Gate II
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Last Big Push
Are you working as a team?
Using mentors effectively
Interactions with your instructor
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Common Mistakes
Over-explaining the obvious
And not explain what really needs to be explained
Rushing through Slide Zero ™
Skipping proper transitions
Not having a team slide with photos & relevance
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Structure of Exec Summ
What problem exists (unmet need) & who has it
Current alternatives & shortcomings
Your solution
Your unfair advantage (magic sauce)
Positioning vis-à-vis other competitors
Market segment targeted & market size
Business model
G2M strategy
Team
Timeline of progress & milestones
Financial projections
The ask
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Pitching to Investors
Tell a story (not literally!)
Saw a problem  unique insights led to a thesis  market research validated thesis  assembled a team  know our customers & their problem & our competition
We know our G2M plans, we have our assumptions & financial projections
We need XX to get to YY
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Investor Pitch
Company Name
Name Title & Contact info
Tag Line
Audience can read the info but this is where you explain what you guys do: This is what I call Slide Zero
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1: Team
Who are you?
Make yourself relevant
Include advisors, consultants if they make you look larger & impressive
OK to show up with a less than perfect team
All teams have holes
Important issue is that you know that there are holes that you are willing to fill
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2: Unmet Need
What pain are you alleviating
Get everyone nodding their head in agreement
Describe a problem people connect with
Tell us how you validated your assumptions
Customer examples, use actual names from market research
Use-case is good way to explain problem
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10. 3: Target Market & Segmentation
What is your target market
Which sliver will you own first & why
Market size
Market dynamics
Regulation, new technology, new players
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11. 4: Market Dynamics & Competition
Complete view of competitive landscape
What alternatives people have today
Never dismiss your competition
Investors, customers, employees all want to know why you are better, not why competition is bad
Never say that you have no competition
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5: Solution
How you alleviate this pain
Make sure that audience clearly understand
What you sell
What is the value proposition
Not a place for in-depth technical description – just a gist of “how”
Avoid text but use diagrams, schematics, mockup, demo here
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6: Unfair Advantage
Why now? why us?
Technology, secret sauce or magic behind product
Special alliances, relationship that makes it possible to for you to do this, now
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Positioning
How are you different from incumbants
Using familiar players to help position yourself
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7: Business Model
How you make money
who pays you
what channels
what gross margins
What do you sell?
Subscription
Widgets
Affiliate fees?
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16. 8: Go-to-Market & Sales Strategy
How will you reach your first 10 customers
Marketing leverage points
What alliances needed or in place
Convince audience that you have an effective go-to-market strategy
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17. 9: Financial Projection & Key Metrics
What are key metrics & assumptions
customers, installations, licenses etc.
5-year financial projection take into account extended sales cycle
Show the spreadsheet please
Your “ask”
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10: Status & Timeline
Current status
Accomplishments to date (last ~6 months)
Timeline (major milestones over next ~18 months)
how the money will be used
Can be used to show key metrics
Employee growth
Customer or geographies growth
Profit point etc.
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19. Z-Timeline Q4-’15 Q1-’16 Q2-’16 Q3-’16 Q4-’16 1H-’17 2H-’17 1H’18
Seed $100K
Series A $4M
Series B $7M
Q4-’15
Q1-’16
Q2-’16
Q3-’16
Q4-’16
1H-’17
2H-’17
1H’18
2H’18
Start company
Milestone #4
e.g. 1st Prototype
e.g. 1st alliance signed
e.g. 10 referenceable accounts Or
Reach profitability etc.
Milestone #2
Milestone #3
Milestone #5
betas
Alpha customer acquisition
Product development
Prod Launch
Employee count
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Pitching
Slide zero ™
With conviction
Play as a “team”
Anticipate questions, pre-empt them
Simple slides with data (but you are not Jobs!)
Do not read slides
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21. The Process of Starting Up
Anatomy of a startup
Team dynamics
Opportunity identification
Create compelling value proposition
Market research to validate need, price, position
Understand funding scenarios
Business model & market sizing
Go-to-market strategy
Partnerships & alliances
Financial plans & projections
IP &legal issues
Fund raising process (VCs, angels & Term sheets)
Pulling it all together in investor’s material
Practice & pitch to investors
Tech Strategy IEOR 191
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Other Topics
Next week is slow class
What topics you wanted to talk about but felt were short changed?
Nov 4th: Legal and IP + Term Sheets
Nov 11th – no class!
Nov 18th – First 5 Min of your investor pitch
Nov 25th Thanksgiving
Dec 2nd Last Class – Summing it all up!
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Cheat Sheet
Make sure that Year 5 revenue is between $50m to $100m (unless you are after Angels only)
State assumptions
Net income typically does not exceed 30%
Don’t under estimate Y5 expenses
Ask for enough money to get to the next stage of de-risk (tell us what it is)
IEOR 191
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Gate 2 Plans
Room 3108
Led by Gopi
Teams:
TeleDoc
Mochi
SpendWallet
Smart Sense
Room 3106
Led by Howard
Teams:
PSCO
Pepper IoT
College Shift
Boxey
Room 3109
Led by Hulya
Teams:
EasyLife
Infinity
Green Apron
Room 3111
Led by Bulent
Teams:
Medherence
Rubber Journey
TeleSense
7 minute pitch + 7 min feedback; Resist the temptation to answer questions, take notes
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