How to Pitch Your Idea

Transcription

1 WORKSHOP How to Pitch Your Idea Prepared by: Shahram Sadeghi Prepared for: November 2016

2 Agenda Brief Introduction What is a Pitch? Elements of a Pitch Deck DOs and DON Ts Sum Up Sample Pitch Financial Projections Q&A

3 Brief Intro Who am I? Raised in Europe Studied in the US Worked in: Wall Street Iran Russia England Major in: Marketing International Business Finance Industries: Banking Automotive Strategic Consulting Manufacturing Trade IT Co-founder of SoAmpli (UK) Appsi (Iran) Datis Pars (VC)

4 What is PITCHING? What: A pitch is basically delivering a business plan verbally How: Start with the Business Plan Create the Executive Summary Bring key elements in the pitch Sources of Funds: Friends/Families/Founders Angel: Says 10X, wants 30X, can t follow-on with additional funds VC: Must return above 5X, says 10X, wants 20X Banks: just forget about it

5 What should be included? There is no standard (one size fits all) pitch Formulate your own but make sure to include the core ingredients The product (company) Problem it solves (opportunity) Market (demand vs. supply) Business model Sales & Marketing Competition Financials Core Team Summary and call to action

6 Elevator Pitch My company, (name), is developing (a defined offering) to help (a target audience) (solve a problem) (with secret sauce) Example: Our company is Appsi, which is short for app taxi. Our product connects passengers and drivers through our mobile application. Our mission is to utilize a good portion of the transportation fleet which are not necessarily official taxi drivers but are looking for some extra cash. Te main problem with taxis in Iran is the non-transparent pricing practices. Through Appsi, the users will get a price estimate before ordering the taxi. This would ease the lives and experience of both drivers and passengers. Run your elevator pitch with others, making sure they understand it as well and always look for further improvement.

7 DOs Make friends and colleagues spend their social capital making introductions for you and your idea Use all resources available to you. Do not be shy to ask for favors Look sharp and be excited about your idea Know the investor do the research Showing is better than telling (showing a demo is triumphant) Speak in plain language and avoid technical terms Include any additional supporting slides in the Appendix Section Conclude with a call to action

8 DON Ts Assess the investor: If they cannot afford to lose the money, you should not be asking them Choose not to be the smartest person in the room Show enthusiasm and passion not obsession Do NOT ignore anyone at the meeting they might not be able to help you, but they can definitely hurt you

9 Top Characteristics Investors Look For 1. Integrity 2. Passion 3. Commitment, Experience & Knowledge (team) 4. Vision & Realism 5. Coachability 90% People 10% Idea

10 Sum Up (1) Pitching is a numbers game you have to get in front of many investors before you get a yes You will never be done, so get someplace you are 50% confident of, and go The slides are not your pitch. They are the guardrails that keep your audience with you. You must be confident and knowledgeable about what you are going to do with their money Your business plan (model) and pitch must periodically be revised and improved

11 Sum Up (2) Make sure you use the same vocabulary (offline vs. online) Don t use clipart and bullet transitions Don t accept everything in the meeting and don t reject everything Make sure your demo works prior to meeting Promotion materials High visibility, low impact Don t talk bad about competitors Show diversity in the team Know your numbers (70% marketing, 15% salary ) Shark Tank, Shark Tank and then more Shark tank

12 Investometer

13 Don t forget The Ask The main objective of the pitch is to raise funds, so be clear on: What size of investment are you looking for? How long does it get you? How will you spend it? How else can the investor(s) help you? Don t be pushy. Give the investor time to think and act.

14 Sample Pitch Deck

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24 Financial Planning

25 Financial Projections Assumptions Salaries Other Costs Office IT Marketing Finance Legal Others Profit & Loss Cash Flow Balance Sheet???

26 Assumptions

27 Salary Team Expansion Plan

28 Cost Breakdown

29 Profit & Loss / Cash Flow

30 Q&A

31 Thank You Shahram Sadeghi Skype: Shahramsomazi

32 Appendix

33 Questions Asked by Investors - Overview What does the company do? What is unique about the company? What big problem does it solve? How big is the market opportunity? Where are you headquartered? How big can the company get? Source: Forbes

34 Questions Asked by Investors - Market What is the actual addressable market? What percentage of the market do you plan to get over what period of time? How did you arrive at the sales of your industry and its growth rate? Why does your company have high growth potential? Source: Forbes

35 Questions Asked by Investors - Founders Who are the founders and key team members? What relevant domain experience does the team have? What key additions to the team are needed in the short term? Why is the team uniquely capable to execute the company s business plan? How many employees do you have? What motivates the founders? How do you plan to scale the team in the next 12 months? Source: Forbes

36 Questions Asked by Investors Product/Service Why do users care about your product or service? What are the major product milestones? What are the key differentiated features of your product or service? What have you learned from early versions of the product or service? Provide a demonstration of the product or service. What are the two or three key features you plan to add? Source: Forbes

37 Questions Asked by Investors - Competition Who are the company s competitors? What gives your company a competitive advantage? What advantages does your competition have over you? Compared to your competition, how do you compete with respect to price, features, and performance? What are the barriers to entry? Source: Forbes

38 Questions Asked by Investors - Marketing How does the company market or plan to market its products or services? What is the company s PR strategy? What is the company s social media strategy? What is the cost of a customer acquisition? What is the projected lifetime value of a customer? What advertising will you be doing? What is the typical sales cycle between initial customer contact and closing of a sale? Source: Forbes

39 Questions Asked by Investors - Risks What do you see are the principal risks to the business? What legal risks do you have? Do you have any regulatory risks? Are there any product liability risks? Source: Forbes

40 Questions Asked by Investors Exit Strategy What is the likely exit IPO or M&A? When do you see the exit happening? Who will be the likely acquirers? How will valuation of an exit be determined given market comparables? Source: Forbes

41 Questions Asked by Investors Intellectual Property What key intellectual property does the company have (patents, patents pending, copyrights, trade secrets, trademarks, domain names)? What comfort do you have that the company s intellectual property does not violate the rights of a third party? How was the company s intellectual property developed? Would any prior employers of a team member have a potential claim to the company s intellectual property? Source: Forbes

42 Questions Asked by Investors Financials What are the company s three-year projections? What are the key assumptions underlying your projections? How much equity and debt has the company raised; what is the capitalization structure? What future equity or debt financing will be necessary? How much of a stock option pool is being set aside for employees? When will the company get to profitability? How much burn will occur until the company gets to profitability? What are the factors that limit faster growth? Source: Forbes

43 Questions Asked by Investors Financing How much is being raised in this round? What is the company s desired pre-money valuation? Will existing investors participate in the round? What is the planned use of proceeds from this round? What milestones will the financing get you to? Source: Forbes