1. Copyright 2013 Jack M. Kaplan & Anthony C. Warren Building & Exiting Patterns of Entrepreneurship Management Chapter 12 Communicating the Opportunity Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

2. Copyright 2013 Jack M. Kaplan & Anthony C. Warren Session Outline Locating Investors Grabbing Investors attention with a teaser From Elevator Pitch to Presentation After the Presentation Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

3. Copyright 2013 Jack M. Kaplan & Anthony C. Warren Why Attract Investors? No idea, however good it is, will attract resources to help a company grow unless the entrepreneur can communicate the opportunity clearly to potential stakeholders whether they be investors, bank loan officers, corporate partners or even key employees. Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

4. Copyright 2013 Jack M. Kaplan & Anthony C. Warren Attracting Investors Customize all communications to your target audience—i.e., are you going to pitch to a bank the same way you are going to pitch to a VC? Investor commitments do not come quickly—allow for an exploratory period First communiqué should be an executive summary or teaser that grabs attention Have the verbal equivalent of an executive summary—the elevator pitch—ready. Must be a crisp message that can be conveyed in 2 minutes If you’ve made an impact via the steps above, you will be invited to give an investors’ presentation Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

5. Copyright 2013 Jack M. Kaplan & Anthony C. Warren Locating Investors Investors are busy people, only contact those who are likely to be interested in the opportunity Look within the industry in which the business is focused Speak with other entrepreneurs in similar business fields who have successfully attracted investment Leverage the value of the internet Network, network, and network! Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

6. Copyright 2013 Jack M. Kaplan & Anthony C. Warren The Importance of finding the Right Investors Investors aren’t just a source of money Investors add value by: –Helping to identify key management team members –Providing key contacts and network access –Serving as a mentors, confidants, and a sounding board –Helping to establish relationships with key customers, suppliers, and corporate partners Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

7. Copyright 2013 Jack M. Kaplan & Anthony C. Warren The Importance of finding the Right Investors “Arms-length” investors are passive investors who want little or no involvement in the business Though this sounds attractive in such a way that they won’t interfere, this is actually unadvisable Always opt for “Smart-money” Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

8. Copyright 2013 Jack M. Kaplan & Anthony C. Warren More Tips on Finding the Right Investors Attend local entrepreneurs networking functions Keep in mind the criteria by which investors filter: –Stage of Company –Domain or field –Size of Investment –Location –Stage of fund Network—Investors MUCH more likely to review opportunities that are referred to them Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

9. Copyright 2013 Jack M. Kaplan & Anthony C. Warren Preparing a Teaser A teaser is the bait—it must be impeccable in its appearance, short and to the point, clear, and elegant Be sure to describe the opportunity and the benefit to the potential investor It takes a lot of time to prepare an effective teaser Draft it, go back to it, and have a trusted mentor check it. Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

10. Copyright 2013 Jack M. Kaplan & Anthony C. Warren The Elevator Pitch The elevator pitch is essentially a verbal version of the teaser Imagine you have two minutes in the elevator with your ideal target investor Don’t underestimate the effort needed to make this pitch short—this is extremely difficult and must be rehearsed time and time again. Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

11. Copyright 2013 Jack M. Kaplan & Anthony C. Warren The Elevator Pitch Speak clearly, do not mumble, and do not rush Put yourself in the place of your audience – don’t tell them what you want to say, but what they want to hear Modulate your voice Get the audience involved and interested early Be enthusiastic Do NOT get into lots of detail Maintain positive body language Do not be overanxious or overact Finish on a high note; close with focus on next actions Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

12. Copyright 2013 Jack M. Kaplan & Anthony C. Warren Investors’ Presentation An investors’ presentation is the next step after a potential investor has taken the “bait” Should fill in details that the teaser left out. Should be no more than 20 minutes and 12-16 slides Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

13. Copyright 2013 Jack M. Kaplan & Anthony C. Warren Investors’ Presentation Tips Do not hand out copies prior to the formal part of the meeting. You want attention on you Never read from slides Face the audience, not the screen Do not overrun your time for the formal presentation Fewer slides are better than too many Less content on a slide is better than too much Design the presentation around a clearly articulated and visual roadmap Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

14. Copyright 2013 Jack M. Kaplan & Anthony C. Warren After the Presentation Contact investors a few days after the presentation to see if any additional questions can be answered Create a sense of urgency and need for action on the part of the investor Support the Investor Evaluation Process –Management Team –Business Model –Context—Viability of the Opportunity –The Deal Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation

15. Copyright 2013 Jack M. Kaplan & Anthony C. Warren After the Presentation Dealing with failure—no matter the outcome, every situation is a learning opportunity. Turn negatives into positives Work towards a “Term Sheet”—final financial agreement that addresses ownership, control, and financial objectives before due diligence is undertaken Chapter 12 Attracting Investors Teaser and Elevator Pitch The Presentation After the Presentation