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How to Pitch to Investors
Dr Bojana Turic Entrepreneur in Residence
Cross Pacific Capital Partners
Feb 8st 2017 UBC Life Science Institute Workshop
Ingredients to Start up a New Enterprise
Management Team
Market
New Enterprise
Business Idea
Idea
Entrepreneur :
• Ideally, start with a clinical condition not a technology
• Go after large markets
• Pursue clinical condition with a deficient standard of care
• Should have “reasonable” regulatory and clinical requirements
• Protect and manage your ideas
VC:
• Idea or Opportunity?
• Intellectual Property
• Market Size
• Technology Match w/ Unmet Clinical Need
3
What it takes to build winning companies- COMPANY FORMATION
Address a worth while clinical need
PRE-SEED SEED STAGE
Need definition Concept Solution
Early IP ,Crude prototypes
Market Research Regulatory/Clinical
Team
Fundraising steps
1. Before the pitch:
Importance of due diligence
Understanding your audience
2. The pitch:
Structure, tips dos and don’ts
3. After pitch:
How do you follow up
5
Presenting to Investors
• Use Key Words or Very Short Text
• The PPT doesn’t tell the venture opportunity
• It provides a graphic guide for the presenter to follow to effectively deliver the investment message
• Use Bullet Points For Emphasis
• Tell Your Story With Graphics & Pictures
6
Before the pitch
Importance of your due diligence:
• Who are you talking to?
• What do you know about the person, the company, VC?
• Have you done your research?
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Entrepreneurs-vs. VCs: Perceptions and Caricatures
Entrepreneurs think VCs are : • Arrogant, self obsessed • A necessary evil • Simply living off other people’s
money • Lacking operational skills • Never around, always interfering • Incapable of adding value • Clueless (fast turning down “my”
wonderful plan/closing “my” fabulous business) • Unaware that all “my emotion” is
invested in this one business
VC think entrepreneurs/funders are: • Arrogant, self obsessed • Stubborn and don’t listen • Forget they couldn’t get
anywhere “without our” money • Prone not to understand it’s not
their company • Obsessed with valuation • Wildly optimistic • Apt to forget it’s an emotional
roller coaster for “us” too
Source: C.K. , Smarter Ventures 8
Introduction First slide -Title
Identify:
• The Company
• Presenter(s) (Your Name and Title)
• Date*
• Location* (Prepared for …)
• Logo
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Slide Two – Your Pitch
Optional 1a: Give agenda on one slide – few
seconds Vision – Why is this important ? What investors are looking for ?
The first 30 seconds
• The Hook — most unusual, exciting, dramatic, or humorous aspect of your journey
• Why should “they” be interested?
10
Slide three and four…
Option 1 :
• Market and existing problem
• Your Solution - Telling your story (Why? your technology matters)
• Your technology (dealing with interruption and questions during your presentation)
What investors are looking for :
• Strong market potential
• Strong Technology (IP)
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Slide three and four cont..
Option 2:
• Starting with the subject : Your technology , invention — explain, reinforce, and prove your point (your vision)
• Market , problem (your market segment)
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Potential traps
• See no problems—only opportunities
• Every opportunity is a priority
• Planning by wishful thinking
Slide number 5
• How are you going to do it?
• Your Business plan, strategy , your competition
• How well you know your industry, your real customer and its buying process
* ( regulatory pathway, reimbursement)
What investors are looking for :
• Strong business model ; barriers of entry
14
Slide Number 6
• Who is going to do it ? (Team, Advisors, Board Members)
What investors are looking for:
• Strong Management team
15
Slide number 7 : Deal Terms
• Amount of Investment Requested
• Type of Investment (convertible note, equity)
• Projected Sales, 1st Year for revenue, 1st year of profit (When?)*
What investors are looking for :
• A foreseeable Exit + appropriate Return
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Slide number 8 Closing
• Investment message
• Summary
• The Close — demand for action –or- demand for reaction
What investors are looking for :
• A compelling reason to pursue
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Slide Number 9 – optional
• Usually at the later financing rounds
• Not at the very beginning
• Pre-Money Valuation*
• (Post money valuation if amount requested is listed first)
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Balancing 5 Minute Presentation Time
Subject Time Allotment Illustrating the message
Technology 1 Pictures, Graphics, Video
Market 1 Size, Graphic, Demographics , Competition, Achievable Market Share
Business Model 1 Why your company will succeed
Venture Opportunity 1 Valuation, investment type and amount , investment timing with $milestones , ownership % ROI, exit strategy
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Dealing with Q&A
• Dealing with a time shortage
• Extra slides
20
Investors-VC Desirable Qualities
• Knowledge of Industry, & NETWORK
• Track Record Vision
• Instinct
• Operational Experience
Moderated Ego Commitment
Now what? How do you follow up?
• Getting the first post pitch meeting
• Call them before to send them any follow up information
• Initially provide just a well tuned/crisp executive summary
• Call back after 10 days, if silent
• Ask permission to sent follow up updates
• Most often Potential Investors do not sign NDA
22
You got your first money:
• Team
• Define future funding inflection points
• Be flexible relative to the original plan
• Expect significant changes and surprises
23
