View
5.857
Download
2
Category
Preview:
Citation preview
Building Your Venture Capital Pitch
Stephen N. Davis
“Partnering With Clients to Drive
Sustainable Profitable Growth”
2000 - 2011 © CXO Advisory Group
Guidelines
Goal of the first meeting is to get the second meeting • Increase receptivity and find your champion
Focus • Value proposition – not technology • No more than 12 – 15 slides
Personalize the story • To fit the potential VC partner’s investment criteria and focus
Efficient use of time – You have 15 minutes YOU are the real story
• Don’t hide behind slides – don’t just read them • Don’t overload slides with text • Recommend black text on white background
Order of slides will depend on your situation • Order for most compelling story
CEO or Founder gives the presentation
2000 - 2011 © CXO Advisory Group
The Slide Titles
Title Slide
Overview
The Problem – What’s the Pain?
The Solution – Your Value Proposition
Technology – Your Secret Sauce
Opportunity and Market
Competitive Landscape
Go to Market Strategy
Financial Overview
Funding Needs and Uses
The Management Team
Current Status
Summary
2000 - 2011 © CXO Advisory Group
Title Slide - Content
Name of your firm
Date
Appropriate graphics (logo, etc.)
2000 - 2011 © CXO Advisory Group
During the title slide…
Begin by introducing yourself and the team
• Names and titles only
• Save team detail for later
Recommended:
• Hook ‘em - Start with a 1 to 2 compelling minute story
• Make it compelling and memorable
• Tie the story to your overall message
PRACTICE, PRACTICE, PRACTICE!!!
2000 - 2011 © CXO Advisory Group
Overview
This is where you use your elevator pitch. • Elevator pitch is one of your most important elements
• This is the essence of your business
• You have 10 to 20 seconds to grab their attention
• Then 20 to 40 seconds to expand the Business Value Proposition
• Most entrepreneurs don’t spend enough time developing their pitch
• Two to five high level bullets
• Go into more detail later
• Refer to key points to keep attention for the rest of the presentation
You’ve got to get their attention here or your lost
2000 - 2011 © CXO Advisory Group
The Elevator Pitch
Forces you to focus
Cover these Points
• What market are you in?
• The customer pain you are solving?
• What is the size of the opportunity?
• Why you’ll win?
• Market validation
Show passion and enthusiasm
• You’re NOT Speedy Gonzales
30 to 60 seconds
Don’t use jargon
Use powerful analogies to help them “get it”
Make sure your mother can understand it in less than 15 seconds
2000 - 2011 © CXO Advisory Group
It Takes a Long Time to Write Something Short
24 hours minimum – 4 months maximum • 8 hours to develop prioritized list
• Problems you’re solving • What you’re offering • What makes you different from competition
• Why you’ll win • 4 hours to write first draft • 4 hours testing your first draft with key individuals, advisors, etc. and
incorporating feedback • 6 hours testing revised draft on larger group • 2 hours to revise and incorporate feedback
But this isn’t the end You’ll eventually have multiple elevator pitches for various
audiences • Investors, different customer types, strategic partners, etc.
2000 - 2011 © CXO Advisory Group
Example
We provide a flexible, interactive and personalized system for delivery of medical
test results from a dedicated, comprehensive content library.
We streamline the reporting of clinical lab test results from the physician to the patient in language that patient’s can
easily understand.
2000 - 2011 © CXO Advisory Group
The Problem: What’s the Pain?
Compelling problem(s) you address
• What’s the pain and who is suffering?
• revenues, costs, time, market reach
• Emphasize the inability of existing methods, procedures,
competitors to satisfy need
Include validating quotes from
• Customers or Analysts to validate pain
Problem must suggest a large market
• Suggest market opportunity size
• ie: specific cost of problem to the market
2000 - 2011 © CXO Advisory Group
The Solution – Your Value Proposition
Describe your business, product or service in terms of compelling benefits
• “Must-haves” not “nice-to-haves”
• Cost saving, time savings, personnel savings, process improvements, etc.
• Illustrate your solution graphically if possible – Make it simple
Include quotes from customers using product • Validate business value proposition
Add a slide or two, if necessary to show solution and where it fits
• Focus on the value proposition
• Explain the technology
• Don’t go overboard on technology
2000 - 2011 © CXO Advisory Group
Technology – Your Secret Sauce
Concentrate on essential value proposition!!
Best to use graphics • Before and after diagrams often work well
Translate key points from business to technical domain • Show how it fits into customer operation
Patent Status
2000 - 2011 © CXO Advisory Group
Opportunity and Market
Market details • Define ideal target customer
• Who decides? Who pays?
• Use specific example if possible
• Size and growth rate for five years
• Validated sources
• Focus on your segment(s) of the target market
• Market challenges
Does it justify a $50M to $100M+ run rate opportunity in five years?
Demonstrate defensible % of market share • How will you get there? Can you get there?
• Typical sales cycle that will justify ramp up
2000 - 2011 © CXO Advisory Group
Competitive Landscape
Discuss current and potential competitors
• Focus on top 3 competitors and why you will win
• Demonstrate knowledge of market and operational landscape
• “no competition” an unacceptable answer
• SWOT table works well here
Differentiate yourself
• Use customer-centric attributes and dimensions
• Reinforce your unique competitive advantages
• Differentiators that would compel customers to buy from you
• Relationships, intellectual property, new insights, domain expertise
Customer Quotes
• What do they say about your competitors?
• Why would they rather buy from you?
• What do they say about your competitive advantage?
2000 - 2011 © CXO Advisory Group
Go to Market Strategy
Who are the key players? • Profile the customer • Discuss critical sales and strategic partner relationships
• In place or in process
Revenue Model • How and what do customers buy?
• Discuss high level pricing • Describe what the customer will get –Typical sale
Marketing and sales plan • Explain sales cycle and how you acquire customers • Compare and contrast to other firms • Sales channel strategy – who will sell? • Cost to acquire customer and sales channel partners
Current customers and sales pipeline • Customer quotes can provide external validation
2000 - 2011 © CXO Advisory Group
Financial Overview (in thousands)
2005 2006 2007 2008 2009
Revenues ($K) $500 $2,325 $7,000 $24,000 $60,000
Expenses ($K) $2,250 $5,000 $10,000 $22,000 $49,000
EBITDA ($K) ($1,750) ($2,675) ($3,000) $2,000 $11,000
Breakeven Q3 2008
Customers 1 5 35 150 275
Be prepared to discuss and key financial assumptions
• Should be forecast based on receiving funding
• Revenue analysis – market ramp up, pipeline
• Bottom up better than top down
• Expenses
Have detailed proforma backup
2000 - 2011 © CXO Advisory Group
Funding Needs and Uses
This is where you tell them • How much you need • What you will use the funds for
Example: Series A: $5,000,000 • Hire CEO, VP Sales & Marketing, CFO – Fill gaps in management team • Launch product into the market • Bring on additional sales, marketing & engineering resources • Develop initial key referral accounts • Expand number of field test sites • Develop initial OEM channels • Continued Engineering • Build support organization • Additional patent protection
Example: Series B: $5 Million in 12 to 18 months • Expand marketing & sales nationwide • Promote company & its products for maximum visibility • Start development of international markets • Introduce follow on products
2000 - 2011 © CXO Advisory Group
The Management Team
Purpose to build confidence
• On one slide only
• That team can build and manage the business
• Previous relevant accomplishments that can grow the business
• Expose skill experience gap
• Discuss your hiring plan to fill key slots
Provide list of key advisors or members on BOD
• Only if they add substantial weight or credibility
• Can be on separate slide
If you’re not qualified to be CEO
• Be honest with yourself
• Turn it into positive
• State that you want to bring someone in with when funding is completed
2000 - 2011 © CXO Advisory Group
Current Status
How much money have you previously raised
• Sources of funding
What have you already accomplished with other
investors’ money?
• Key milestones
• Product completion, first sales, patent pending
• Key customers, Strategic relationships
• Logos and testimonials
Timeline format can be useful
Show you are in position for some key future milestones
• What are they?
2000 - 2011 © CXO Advisory Group
Your Summary
Your call to action
Summarize your strongest points
• Why you’re different & why you’ll win
• Memorable sound bites
Anticipate exit strategy question
Ask for feedback
• Will highlight there concerns
• Show where you need to improve Pitch or rebuild story
Ask about the process
Ask about next step(s)
• Determine conditions for second meeting
• If possible, set up follow-up meeting
If no interest then
• Ask for referral to other funding sources who’s profile you fit
Stephen Davis
Phone: (508) 528-7571 Email: sdavis@cxoadvisorygroup.com Website: www.cxoadvisorygroup.com Linkedin: www.linkedin.com/in/stephendavis Twitter: twitter.com/stephendaviscxo
Interim COO/VP Sales & Marketing |
Business Consultant | Sales Channel and
Business Development Expert | Author &
Speaker
Contact Information:
“Partnering With Clients to Drive
Sustainable Profitable Growth”
2000 - 2011 © CXO Advisory Group
Driving Profitable Growth
We help companies optimize business development and marketing; accelerate sales; and seize the most attractive growth opportunities.
2000 - 2011 © CXO Advisory Group
The CXO Advisory Group
CXO Advisory Group is a strategic operations advisory
and management firm comprised of proven C-level
executives with both breadth and depth of experience.
CXO Advisory Group Team members have achieved
success in positions ranging from: President/CEO to
COO, and VPs of Sales, Marketing, Corporate
Development and Human Resources.
Has proven success in business development and in
building US sales and distribution channels
2000 - 2011 © CXO Advisory Group
How Can CXO Help You?
Business Strategy Services
• Audit business practices and organization
• Evaluate product and pricing strategies
• Evaluate effectiveness of sales channel
• Assess effectiveness of existing sales and marketing
programs
Market Entry Program
• Analyze competitive landscape
• Market launch strategy and plan
• Channel strategy and programs
• Establish sales channels
• Generate sales and manage relationships
• Identify and develop strategic partnerships
2000 - 2011 © CXO Advisory Group
How Can CXO Help You?
Sales Channel Management
• Review and revise sales channel strategies
• Channel partner identification, prospecting and recruitment
• Eliminate channel conflict
• Channel contract development and negotiation
Interim Management Resources
• Interim CEO, COO, CMO, CSO
• Interim VP of Sales and Marketing
• Consultant on staff
• Launch team coaches
2000 - 2011 © CXO Advisory Group
How Can CXO Help You?
Venture Advisory Services
• Fine tune operations, business strategy and market entry
• Assist with due diligence
• Strategic business assessment of portfolio companies
Stephen Davis Interim COO/VP Sales & Marketing |
Business Consultant | Sales Channel and
Business Development Expert | Author &
Speaker
Contact Information:
“Partnering With Clients to Drive
Sustainable Profitable Growth”
Phone: (508) 528-7571 Email: sdavis@cxoadvisorygroup.com Website: www.cxoadvisorygroup.com Linkedin: www.linkedin.com/in/stephendavis Twitter: twitter.com/stephendaviscxo
Recommended