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Yes Mr. Future Entrepreneur, This is your Pitch Book.
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REAL Entrepreneurs base their direction on purposeful innovation in response to consumer demand and not on the desire to make a quick buck.
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Do you want to be master of your own financial destiny?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals? Can you sell your ideas to others?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals? Can you sell your ideas to others? Are you a person who never gives up?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals? Can you sell your ideas to others? Are you a person who never gives up? Are you always looking for better ways of doing things?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals? Can you sell your ideas to others? Are you a person who never gives up? Are you always looking for better ways of doing things? Can you recognize, admit to, and learn from your mistakes?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals? Can you sell your ideas to others? Are you a person who never gives up? Are you always looking for better ways of doing things? Can you recognize, admit to, and learn from your mistakes? Are you good at making decisions?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals? Can you sell your ideas to others? Are you a person who never gives up? Are you always looking for better ways of doing things? Can you recognize, admit to, and learn from your mistakes? Are you good at making decisions? Do you have a purpose, focus & direction in your life?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals? Can you sell your ideas to others? Are you a person who never gives up? Are you always looking for better ways of doing things? Can you recognize, admit to, and learn from your mistakes? Are you good at making decisions? Do you have a purpose, focus & direction in your life? Do you have the courage to try new things or go against the grain and be
different from other people without working too much about what they think?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals? Can you sell your ideas to others? Are you a person who never gives up? Are you always looking for better ways of doing things? Can you recognize, admit to, and learn from your mistakes? Are you good at making decisions? Do you have a purpose, focus & direction in your life? Do you have the courage to try new things or go against the grain and be
different from other people without working too much about what they think? Do you like make things happen instead of waiting for things o happen?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals? Can you sell your ideas to others? Are you a person who never gives up? Are you always looking for better ways of doing things? Can you recognize, admit to, and learn from your mistakes? Are you good at making decisions? Do you have a purpose, focus & direction in your life? Do you have the courage to try new things or go against the grain and be
different from other people without working too much about what they think? Do you like make things happen instead of waiting for things o happen? Does pressure feed you rather than get to you?
Do you want to be master of your own financial destiny? Are you willing to invest and possibly lose a large portion of your savings? Are you prepared, if needed, to lower your standard of living until your business
becomes profitable? Have your ever been involved in a business before? Do you have the ability to conceptualize the whole of a business – and
connect the dots? Are you imaginative, inventive and resourceful? Do you constantly re evaluate and adjust your goals? Can you sell your ideas to others? Are you a person who never gives up? Are you always looking for better ways of doing things? Can you recognize, admit to, and learn from your mistakes? Are you good at making decisions? Do you have a purpose, focus & direction in your life? Do you have the courage to try new things or go against the grain and be
different from other people without working too much about what they think? Do you like make things happen instead of waiting for things o happen? Does pressure feed you rather than get to you? Do you look forward to a good Challenge?
Being at the right place at the right time
Adaptive to change
Good people will follow a visionary and a leader
Customers will show loyalty when treated properly and shown the value proposition
Capital will follow the management team that can demonstrate the ability to focus on their model and produce operational excellence
Reasons for Success
They fail the narrative test (the story doesn’t make sense) or the number test (the spreadsheet doesn’t add up)
They underestimated the competition and how their model would stand up under pressure
Retaliation of existing competitors or entry of new competitors
Substitute products or services
They fail to adjust to economic, social political, regulatory, industry, technology, environmental or competitive changes.
Reasons for Failure
Most businesses fail in less than two years
Fewer than one percent of the business plans submitted to VCs get funded
Failures are planned by lack of planning
Facts you should know!
What important customer problem can you solve with your Idea?
How are you going to do it?
How many customers are there that are willing to buy from you?
Why can only you provide the solution?
How can you defend against others?
Answer First Five!
Are both market and industry attractive?
Does the opportunity offer compelling customer benefits as well as sustainable advantage over other solutions to the customer needs?
Can the idea deliver the results they seek and promise to others?
Top level issues!
John Mullins
1. Market domain – macro level
2. Market domain – micro level
3. Industry domain – macro level
4. Industry domain – micro level
5. Team domain – aspirations
6. Team domain – execution capability
7. Team domain – connections or networks
What’s That?
Seven domains are not equally important
A simple scoring sheet will not work
Wrong combination of domains can kill a venture
Sufficient strength in some domains can mitigate weaknesses in others – good opportunities can be found in not-so-attractive markets and industries
Remember!
Overall market – size (number of customers, aggregate money spent, number of usage occasions) (Secondary data from trade publications, business press)
Where is the market on the “S curve” – is it nascent, growing or saturating (infer from historical data)
Trends in broad categories – demographic, socio-cultural, economic, technological, regulatory
Market AnalysisMacro Level
Target segment benefits and attractiveness –customers buy benefits, not products or features.
How large is the segment and how fast it is growing – combination of primary and secondary data
Who you would like to be your FIRST customer –can you name him
Clearly differentiated solution with value delivery unambiguously stated
Does an entry in a segment facilitate lateral entry in other segments?
Market AnalysisMicro Level
Standard Industry Classification
Positioning is not obvious
Michael Porter – “Competitive Strategy” -- Five Force Framework
Suppliers, Buyers, Incumbents, New Entrants, Substitutes
Competitive rivalry, threat of entry and substitutes, bargaining power of buyers and suppliers
Which of these forces are favourable and unfavourable (SWOT analysis)
Industry AnalysisMacro Level
Sustainable competitive advantage – How long will your edge last ?
IP Protection – patents, copyright, trade secrets
Superior organizational processes that are difficult to replicate
Economically viable business model –availability of finance for long term and working capital, contract enforcement and revenue collection cycles
Industry AnalysisMicro Level
Financers give as much importance to team as ideas.
Accepted wisdom – Ideas come dime a dozen, who will execute?
Aspirations, motivation and propensity for risk taking
Ability to execute on critical success factors (CSFs) – unique to each industry market segment – better, cheaper, faster
Connectedness up, down and across the value chain – ability to move from Plan A to Plan B
Team Analysis
VentureCharacteristics *Typology of
Ventures
Entrepreneurial Fit
*Personal goals*Entrepreneurial
Capacity
Strategy to Exploit
*Research&Analysis*Process
*Resources*Growth
Iterative
Heuristics
Heuristics Heuristics
Venture Typology Revolutionary ventures
Niche ventures
Ventures that are propagators of new technology or innovations
Hustle ventures
Speculative (deal) ventures
SWOT Analysis Strengths – identifying existing organisational
strengths
Weaknesses – identifying existing organisational weaknesses
Opportunities – Identify existing and emerging market opportunities
Threats – Identify threats to the future success of the business
PEST Analysis Political: local, national and international
political developments – how will they affect the business ?
Economic: what are the main economic issues – both nationally and internationally – that would have a bearing on the business.
Social: Identify existing and emerging social trends that would have impact on the business and their implications for future planning
Technological: Technological changes and their implications to competitive advantage.
PEST Analysis Political: local, national and international
political developments – how will they affect the business ?
Economic: what are the main economic issues – both nationally and internationally – that would have a bearing on the business.
Social: Identify existing and emerging social trends that would have impact on the business and their implications for future planning
Technological: Technological changes and their implications to competitive advantage.
Potter’s Five Force Model
The Company
Current Competitors
Potential Competitors
Suppliers
Substitute Products
Customers
Determinates of Profitability
Bob Fabio’s “WHAT” What messages . . . to reach
What market(s) . . . with
What product(s) . . . distributed through
What channel(s) . . . against
What competition . . . with
What pricing and packaging . . . to deliver
What value . . . in
What time frame?
Bob Fabio’s “WHAT” What messages . . . to reach
What market(s) . . . with
What product(s) . . . distributed through
What channel(s) . . . against
What competition . . . with
What pricing and packaging . . . to deliver
What value . . . in
What time frame?
Market Opportunities / Validations How will the product or service be priced?
How will you reach the target customer?
How much does it cost to acquire a customer in time and Money?
How much does it cost to produce and deliver the product or service?
How much does it cost to support a customer?
How easy (expensive) is it to retain a customer?
Competition Who are the current competitors?
What resources do they control and what are their strengths and weaknesses?
How will they respond to our decision to enter the business and what can we do?
Who else might notice and enter our market?
Can we build barriers to competitors by forming alliances?
Effective Strategy Implementation Requires
In just about 12 slides
6
Technologies
8
Marketing and leverage
points
7
Competition
1
Intro
What $ youare after
2
Company overview and
elevator pitch;
Moresolution details
5
10
Management Team
3
Problem buy-in; Market and
opportunitysize
4
Your solution and products;with benefits
9
How youmake money;
How much?
11
Status; Timeline;
Use of funds
12
Recap;Call-to-action
Venture Capital Early Stage Financing
The SEED Stage – In this stage relatively small amounts of capital is used to prove concepts & finance feasibility studies.
The START-UP Stage – In this stage funding is done for product development and initial marketing, but with no commercial sales yet (basically to get operations started).
Venture Capital Development Financing
The SECOND Stage – In this stage working capital is used for initial growth phase, but no clear profitability or cash flow yet.
The THIRD Stage – In this stage financing is done for major expansion for company with rapid sales growth, at break even or positive profit levels but still private company.
The BRIDGE/PRE-PUBLIC Stage – In this stage Bridge financing is done so as to prepare the company for public offering.
