Transcript ZP_PitchDeckWorkshopCiputra_FinalFinal2October2012

Your “Financial Pitch”
Getting your financing organized
Making your “Killer Pitch-deck” PPT for Investors
Some tips, advice and secrets to think about…
What we will talk about today
What to think about before you think about
raising money
• High Concept Pitch – which comes from
your Killer Pitch-deck!
What types of Investors are there?
What the Investors are thinking about you
Making your ‘Killer Pitch-deck’ (12 - 15 slides
to sell your story effectively!)
What to think about first
• There is no magic formula for getting financing
• Know where your “hub” or ‘cluster’ is
• Pick a great co-founder
• Important values - Intelligence, Energy, Integrity
• Pick a big market AND KNOW IT IN NUMBERS!
• Have a “Minimum Viable Product” (MVP) - be
passionate about it
• Iterate to Product / Market fit
• Raise money from people you trust; keep control
• Scale
Start building your ‘traction’
• Test your market!
• Markets are relatively efficient - so you are
likely wrong at first pass
• Buy ads against non-existent product to
sell “Coming soon”
• Talk to the customers directly
• Ship immediately and often
• Go for the low-end of the market as you
get started! Find it, use it, own it!!
Learn about Investors!
• Trust people they have backed
• Know within 5 -10 minutes
(usually)
• Market is hit-driven
• Resist outside CEOs
• Valuation is irrational
Are you sure about getting
involved with Investors?
• Investors demand certain types of legal
structures
• Exits are much harder
• Usually don’t look at cash-based
businesses
• Committee-based strategy
• Hiring pressure
• Valuation is temporary : Control is forever
Traction talk gets the
conversation started!
Traction – WHAT IS IT?
You need to tell a story with numbers
You
Social Proof
(who is involved with your business, where your product is selling etc.)
Product
Market
(What you are already doing!)
High Concept Pitch (Financial Pitch)
Elevator Pitch
Presentation (“Killer Pitch-deck”)
Types of Investors
Bootstrapping! (F, F, F’s)
Banks
Crowd-funding
Angel Investors
Super Angels
Venture Capitalists (VC’s)
Bootstrapping
• You should already know this!
•Friends
•Family
•Fools
Banks
• See Ibu Suryani in Incubator for more details!
• There are banks that support
Entrepreneurs and specialize in
startups!
Crowd-funding
• Definition – Wikipedia
• Google ‘crowdfunding’
• YouTube videos (there are a lot!) http://www.youtube.com/watch?v=OIbTpbkH4Y&feature=related
• Example of business that used crowdfunding successfully http://www.entrepreneur.com/video/222633/smart
• Websites that do crowdsourcing for funding (there a many):
• http://www.kickstarter.com/
• http://www.microventures.com/
• http://www.lendingclub.com/
• Crowd funding is now emerging from Hong Kong…
Angels
• Individuals who invest their own money into
Startups
• Generally invest a limited amount every time
• Usually invest alongside other investors
• High risk tolerance; often invest before proven
market traction
• Make quick decisions (usually within 1-3 meetings)
• Often are former entrepreneurs or startup
executives
• Usually make between 2 - 10 investments per year
• Unlikely to care about controlling rights
• Find the list of Angel investors for your market
Super Angels
(or Micro Venture Capitalists)
Individuals or Small fund who invests other people's money
into Startups
Fund size is usually in many MillionsUSA$$$
Similar investment amount as Angels (but it comes from a
Fund, not personal money)
Usually invest alongside other investors
High risk tolerance; often invest before proven market traction
Make quick decisions (usually within 1-3 meetings)
Can make between 5-20 investments per year (some will do
even more)
May not care for controlling rights in companies they invest in
Find the Super Angels in your market
Venture Capitalists (VC’s)
• Members of a fund (can be between 1 and 20+ partners at
one fund) who invest other people's money into Startups
• Fund size varies between $300M to $4B
• Generally invest more than $1M at a time
• Often want to have a major portion of the round
• Lower risk tolerance; rarely invest before proven market
traction or in unproven entrepreneurs
• Have pre-determined process for decision-making (between
3-6 weeks)
• Will take board seat or retain some controlling rights in
companies they invest in
• 1-2 investments per partner per year
What type of Investor should
you target?
• Kitchen Table – BOOTSTRAP – Family, Friends and Fools…
• Research what local BANKS can do for you - new policies
(women, green, social) but know what the ‘terms and
conditions’ are
• See if Crowd-funding will work for you
• First time startup getting traction – ANGELS
• First round of non-family financing – ANGELS
• Once you need more than $1MillionUSA - VC’s - but make sure you have
your mentor/investor relationships in place first! This takes time to build….
VC’s usually don’t meet with Entrepreneurs - and they won’t consider
Entrepreneurs unless you already have used Angel investing - but they will
talk with your BoD! The VC’s advise you on how to do your fundraising!
CHALLENGE 1
• Post a Google URL of an Investor for class
Facebook page by the end of this day
23:59
• No duplicates in information
• Identify what sector the Investor works in
• Identify two startups they have already
invested in –
• EXTRA POINTS FOR SPECIAL ASSESSMENT
How much money$$$ should
you ask for?
• Raise as much money as you need to get
to your next milestone!
• Make it so you can stay ‘alive’ for the next
12 - 18 months
• During this time, when you are running
out of cash, it is called ‘the runway’ - like a
plane, getting ready to take off!
This is what your Investor will
want to know about you
• If you are efficient with $$$Capital
• If you can fulfill orders to market
(Capacity)
• If you already have products in market
• If you have clear insight on what works
• If your team is “battle-tested”
• If you have concrete ideas on how much
$$$ you need
The Investor is still thinking…
• Is this a big market opportunity?
• What is the problem you aim to solve?
• Does your solution evince credibility?
• Could I imagine wanting to use this?
• How will you get distribution?
• What’s the deal with the team?
• How is this different from competition?
• How will this make money / get mass adoption?
• Are you serious on execution?
In your tool-kit you must have…
• Great Tag Line
• Elevator Pitch
• High-Concept Pitch…(15-20 minutes) max
• “Killer Pitch-deck” (10-12 slide Presentation)
• 1-Page Executive Summary (captures all of your
important information on your business – summary of
your Killer Pitch-deck)
• Intro E-mail (you send this to an Investor to start the
relationship…)
Great Tag Line
Make it memorable!
CHALLENGE 2
•RIGHT NOW + next 10
minutes!
• Write a summary of your business idea in less than 20 words
and post to Facebook
• PER TEAM – I entry!
• (Hint: this is your business tag line!)
• Twitter - @ZenParry
• EXTRA POINTS FOR SPECIAL ASSESSMENT
The Elevator Pitch
• Forms first impression of your venture
• Like a good TV or radio commercial!
• “WHAT HOW WHY”
• A lot of great examples on YouTube:
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•
•
•
http://www.youtube.com/watch?v=Tq0tan49rmc&feature=related
http://www.youtube.com/watch?v=jEd0fjXsk8w
http://www.youtube.com/watch?v=-6ggSQCM1ug&feature=related
http://www.youtube.com/watch?v=dqIEE-g_-Uc&feature=related
Focus on the problem
Tell a story! - Use simple language
Have a great closing - PRACTICE A LOT!
CHALLENGE 3
• DURING NEXT TWO WEEKS UNTIL
Wednesday 17 Oct - Pitch Faculty,
Facilitators and/or Ibu Zen in UC!
• Make it a team effort (so that everyone is
involved – not just an individual!)
• Document the ambush then upload to your
class FB page! Video, pic, email evidence!!
• EXTRA POINTS FOR SPECIAL ASSESSMENT
High Concept Pitch
(Financial Pitch)
RAISING $$$ – say how much you have already raised and how much more
you are asking for
PRODUCT/SERVICE – describe what this is, very clearly, short sentences,
and mention your website, Facebook page etc.
TRACTION - Tells what you are currently focused on, what growth you have
had (Sales, Customers, etc.) USE NUMBERS!
SOCIAL PROOF - Tell who is already committed to the project for financing,
and if they are important people, tell where they have invested in the past.
Also tell about your Advisory Board
TEAM - Talk about your management team
MARKET - Describe your market – major players, minor players
What are your differentiators (features, unique selling point etc.)
Competitors
Market feedback
Who you are targeting and why this is different to your competitors
Make your “Killer Pitch-deck”
• An example of a 12 slide deck
#1 - Introduction
#2 - Problem
#3 - Solution (with a Demo!!)
#4 - Market size and value
#5 - Business Model – how you will make money!
#6 - Distribution (& Marketing)
#7 - How special are you?
#8 - Competition
#9 - Team
#10 - Funding status (Money and Milestones)
#11 - Last slide (final memory)
#12 - Appendix of possible questions
#1 – Introduction slide
You know how to do this slide!
Example Slide – Introduction slide
“academy of you”
#2 – State your problem
• This slide should be simple and easy
to understand!
• Every time you do this slide, investors
should nod their head that this is a
problem.
• Secret tip – Identify what is the problem?
• Who has this problem?
• How many have the problem?
• How do you know?
Example Slide – Stating the problem
Problem: Online Education is Hard and Expensive
Custom
Integration
Udemy lets anyone create an online course. For free.
#3 – State your solution
• Solution
• Demo or prototype
• Your Product solves big pain for specific customers….
Describe.
• Simple bullet list
• More detailed than Problem, but still simple
• Simple diagram also works
• Secret tip – describe why your solution: Makes
customers very happy, does it better and different from
anyone else
Example Slide - Giving the Solution
content
#3b – Demo or Prototype
• Have a good one, accept no substitutes
• Rehearse it until you do the presentation in your sleep
• Have at least 2 backup routes available
• Backup PC, iPhone or whatever
• Video YouTube demo
• If no demo, then at a minimum get a mockup or have a
decent sample available!
• Your passion for your demo should be obvious
Example Slide – Showing demo of product
udemy live
#4 – Market Opportunity
Top Down – someone else reported it
• Analyst reports
• Comparables in the market
• Thought leaders
Bottom up – calculate users/usage/revenue$
• Average spend amount + $X
• Y customers in our market
• Average customer buys Z times per year
• Market size = $X * Y * Z annually = BIG MONEY
• Market growing at XX% per year
• Compare your ambitions with those of your future peers…
Example Slide – Showing the Market Opportunity
Corporate
Education
$134B
Education and
Training
$40B
Online
Education
$52B
20% CAGR
Informal
Education
$9B
Platform for Many Markets
Initial Focus
Informal Online Education
Total Education Market: $2 Trillion
Source: Market Size from IBISWorld and MarketResearch.com
#5 – Business Model
(How do you plan to make money?)
# Describe Top 1 – 3 Revenue sources for your business
• - Prioritize by Size, Growth and/or Potential
• - Current market activity/customer behavior as proof
# Show how you get to Break-even (or Profitable)
# Describe your Revenue model:
Direct:- Sales, Subscriptions, Digital goods, eCommerce
Indirect:- Advertising, lead generations, affiliates
Secret tip - “Three ways we make money”:
Transactional (we charge for WXYZ services or from orders)
Advertising (charge for click thru, or premium sponsored listings)
Supplies (licensing, or charging other fees)
Example Slide – Business Model (how they make money)
Business Model
20% of
Sales
Students Pay for Courses or Live Instruction
Educators decide what to charge for and how much
#6 – Distribution (+Marketing)
• Code for “Marketing Plan”
• Show lots of channels, lots of decisions
then choose a few key channels
• Make sure you can explain how your
product will get to market and be
‘distributed’
Secret tip – 3 things that matter and must be
measured:
Volume Cost Conversion
Suggested Content:
Distribution Information
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•
•
•
Online:
Partner with fashion bloggers (for your fashion company)
Google AdWords campaign (to specific regions)
Generate SEO traffic via fashion listing pages
•
•
•
•
Offline:
Distribution partnership with ….. Where are they located?
Contest?
PR event (like a fashion shoe)?
Example Slide – Showing how their business is distributed
Udemy’s Sustainable Growth Model
Educators Create Courses
Example: Ross Jeffries
Educators Earn $ on Udemy
Educators Promote their
Course Online
$$
Most requested Feature.
Students Learn on Udemy, and
Share Udemy with Friends
Udemy
2,000 Page Views to Ross’s
First Course
Rocks!
Constant Twitter/Facebook Chatter since Launch
#7 – What is your UNIQUE
advantage?
•
•
•
•
•
•
•
•
Describe what is your advantage….
Do you have a great market share that nobody else has?
Is your team exceptionally experienced?
Are you making an amazing breakthrough product?
You have IP or Patents or Proprietary Technology?
An exclusive partnership?
Great sales and marketing team?
What is your ‘secret sauce’ that nobody else has?
E.g. – you deliver on time or faster than anyone else because…
• WHAT IS IT THAT MAKES YOUR BUSINESS SO
UNIQUE WITH A KILLER ADVANTAGE OVER
EVERYONE ELSE IN THE FIELD?
Example Slide – TRACTION – what makes you unique!
Traction
• Instructors
•
•
•
•
900 instructors have 1,600 courses
Extremely active and passionate teacher community
Half of our teachers ask for payment options
Over 10,000 assets have been uploaded to Udemy
• Users
– 12,000 unique visitors per month
– 9,000 signups
– 600 daily unique visitors
Example Slide – TRACTION with numbers!
Traffic/Usage Assumptions (monthly)
Traffic (in thousands)
Monetization Assumptions
Unique Vistors
Q4 2011
3,000,000
1/50 Create a Course
60,000
50% of courses paid
30,000
Average Cost per Course
$20
Average Buyers per Course
Total Monthly Sales
$18,000,000
TOTAL Monthly Revenues
Growth Assumptions
Unique Vistors
Ratio of For-Profit Courses
Number of Buyers per Course
Current Q3 2010 Q4 2010
Q1 2011
30
$3,600,000
Q2 2011 Q3 2011 Q4 2011
20,000
60,000
100,000
300,000
750,000
1,500,000 3,000,000
0%
5%
10%
20%
40%
45%
50%
0
10
15
20
30
30
30
Example Slide – more TRACTION – Publicity!y
“one of the most compelling
features is Udemy Live”
“online learners are certain
to benefit… from Udemy”
“A new kind of online
classroom experience”
“Udemy offers an experience
that rivals the real classroom”
“Enables anyone to teach online”
#8 - Competition
• List all top competitors (it makes you look like you know your
business sector!)
• Say how you are better or at least different
• If not better, then what is your ‘niche to win’
• What is your positioning – it matters!
• Make a graph – 2 axis – and show where the players are
Secret tip – Useful comparisons/differentiation
•
•
•
•
•
Simple v.s. complex
Value v.s. cheap
Cheap v.s. expensive
Consumer v.s. enterprise
Open v.s. Proprietary
#9 - Team
Who are you & what have you done?
Briefly, i.e. 90 seconds / founder or less
• If you have a technology based product, have the GEEKS onboard!
Do you have Special skills on your team?
• What is your Entrepreneurial experience? Have you already created other
companies? Sold them??
• Sales/Marketing – who is doing this and what are they results/track record?
Also identify –
• Key hires you will be making in the next year….
• What roles you have candidates for (you will hire them when the funding
comes through…..)
• Do you have job descriptions written for these positions? Estimated salaries?
Example Slide – Team photo and titles
JUST JOKING!!
Gangnum Style Team
Top Management
#10 – Funding Status
(Money and Milestones)
•
Show 3 budgets – Small, Medium and Large
• Small – this is you now! You already have this……
• What will you do with the capital?
• Key hires (how many extra people and what for)
• Marketing and Sales (how much money do you need to run
campaigns to get extra customers and build revenues)
• Infrastructure (Scale-up)
• Achievable Milestones (Roadmap!)
• How will you get to next financial milestone
• Show break-even or profit with this funding
• Show relationship customers/revenues
Suggested Content: What you
will do with the funding
• Asking for $250K in October 2012
• Valuation of business $500K
• Angel Investors – Pak Denny, Pak Yo, Pak Ivan
• Build initial product line; functional use with 120 customers
Use of money
$100K: hire 3 x social media marketing experts, 1x customer
support specialist, 1 x office manager, 1 x admin assistant
$150K: market research, marketing campaigns and customer
acquisition (buy lists)
Goals and Milestones
Get 10,000 customers, $250K revenue by April 2013
Estimated break-even in August 2013, with sales at $80K per month
Example Slide – showing what you will do with the money
Fundraising
• Raising $1M for 1.5 years of runway
• Operational Capital
• 3 full-time team members
• Hire part-time System Administrator and full-time Frontend Developer (UI, UX)
• Goals
• Reach 1,000,000 unique visitors
• Reach $100,000 in monthly teacher sales
• Prove business model and sustainable user growth model
Suggested Content Roadmap
• MAKE A GRAPH IN EXCEL or CHART
• What is happening over the next 6
quarters?
• How much headcount will that take?
• Will that really move the needle in terms
of traction?
• What is happening over the next 6
quarters
Example Slide – Type of road map showing Break-Even
Profit projections
Dollars in Thousands
Six Quarter Outlook
Year
Q3 2010
Q4 2010
Q1 2011
Q2 2011
$0
$8,000
$72,000
$480,00
Cost
-$88,671
-$95,619
-$137,857
-$216,019
-$447,537
-$738,074
EBITDA
-$88,671
-$87,619
-$65,857
$263,981
$1,172,463
$2,861,926
Revenue
Q3 2011
Q4 2011
$1,620,000 $3,600,000
#11 – Last slide
• Leave them with something to
remember you by!
And as Steve Jobs always said:
“Oh, and one more thing…”
{Steve Jobs never had to ask for financing…..}
http://www.youtube.com/watch?v=2-ntLGOyHw4
Make sure you put your contact information for the
investor!
#12 - Appendix
• Have answers to potential questions
already figured out
Killer Deck-Final reminders!
MAKE SURE YOU HAVE ANSWERED ALL OF THESE QUESTIONS:
How much are you raising?
How long does this financing last?
What markets do you think are most promising?
What holes exist in your team (what talent do you need to hire)?
Why won’t your competitors Business YYY or Company ZZZ be
better than you?
What makes you the right team to do this?
• 12 - 15 slides or less – 20 minutes at most – less is better!
• Keep it simple and sweet!
List of slides for
“Killer Pitch-deck” – again!
• Your slides should be (in this order) • 1. Intro – Quick short liner of what you do (elevator pitch).
• 2. Problem you are trying to solve – how a problem exists, and how people find it
painful
• 3. The solution with Demo - how cool is your product/solution is!
• 4. Market size and value – how big is the market in users and in spending value
• 5. Business / Revenue Model – how will you make money
• 6. Marketing and Distribution plan – how will you grow your user base
• 7. How are you special? – Technology or something else that makes you special
• 8. Competition – how you stack up against them
• 9. Your Team – how awesome you all are
• 10. Funding status – how much money you need and how will you spend it
• 11. Last Slide – leave them with something to remember you by positively
• 12. Appendix – Have answers to any potential questions and more details here
Example: Video of
“Facebook” Pitch to Investors
• Video 33 minutes – An adaptation of the “Financial Pitch”
before their Initial Public Offering (IPO)
• http://www.geekmarketer.com/videos/watch-zuckerbergpitch-why-you-should-invest-in-facebook/
• The video covers all of the key points: Market Opportunity
• Problem – Solution - Distribution (& Marketing) – Team –
Competition – Execution – Demo - Business Model
• Some memorable lines……….Facebook helps you share what is
important to you
• Timeline and Newsfeed
• You live through the communication of those things to the people you care
about
• Each person has a story!
Examples of other High Concept
Pitches (from TechStars USA)
• Go to YouTube and search on “TechStars Demo days” – you
will see videos where teams have crashed and burned in front
of the investors!
• From TechStars sessions Demo Day (< 10 minutes):
http://www.youtube.com/watch?v=h56G31e0fD0
• TechStars on Bloomberg.com television (This is a series and
episodes are 45 minutes long):
• http://www.bloomberg.com/video/78212132-techstarsepisode-6.html
• One TechStars pitch (<10 minutes):
http://www.youtube.com/watch?v=w6tW0P0SFAg
Indonesian Incubators and
Accelerators
Kevin Mintaraga who founded Project Eden
http://www.youtube.com/watch?v=TMDBRTzpzSk
Project Eden http://eden.co.id/
On YouTube http://www.youtube.com/watch?v=TcU3fsHmlLk
Startuplokal - http://startuplokal.org/#
On YouTube http://www.youtube.com/watch?v=s0VF8UivFt8
On Facebook http://www.facebook.com/StartupLokal?fref=ts
Merah Putih http://merahputih.co.id/
Idea Source http://ideosource.com/index.html (Auditions in Surabaya!)
Singapore Government has program for Indonesia
http://www.ida.gov.sg/Programmes/20120419161029.aspx?getPagetype=33
Global Entrepreneurship Program Indonesia (GEPI)
http://www.gepindonesia.org/programs/
Other Incubators and
Accelerators in the USA
• Y Combinator http://www.ycombinator.com/
• 500 Startups - http://500.co/
• More are listed here:
http://www.forbes.com/sites/tomiogeron/2012/04/30/t
op-tech-incubators-as-ranked-by-forbes-y-combinatortops-with-7-billion-in-value/
• The focus for these Incubators is usually high-tech or
“fast growth startups”
• There are many Incubators and Accelerators in the USA –
search on Google
Extra Resources
• Google for examples online of ‘Killer Pitch-deck”
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•
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http://www.adamwaaramaa.com/fundraising/writing-your-pitch-deck/
Two creative PPT’s for a High Concept Pitch - http://investors.evr.st/ and
http://investors.dressrush.com/
Interesting YouTube example:
http://www.youtube.com/watch?v=wyrFWbGiGOc
These guys are big time famous: http://www.businessinsider.com/airbnb-a13-billion-dollar-startups-first-ever-pitch-deck-2011-9#-1
Guy Kawasaki’s Books & Blog on pitching
Online article with good information:
http://www.entrepreneur.com/article/220141
WORK ON YOUR PROFESSIONAL
PRESENTATION SKILLS!
Challenge 4
• Make your Killer Pitch-deck and
submit to your Faculty
• Deadline – Friday 19 October
23:59pm
• EXTRA POINTS FOR SPECIAL
ASSESSMENT
Terima Kasih….
• You can ask me questions while I am at Universitas Ciputra
until October 20. Send an email to set up a short meeting…..
• [email protected]
• Facebook – [email protected]
• Linkedin.com – zen parry
• Thanks to sources of content on Facebook, YouTube,
Udemy.com (for their great slides) and other links on the
internet
• Good luck developing your Financial Pitch and Killer Pitchdeck