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Creating a Compelling and Persuasive Series A Investor Presentation

Jaine Lucas Ellen Weber

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Early Stage Funding Ecosystem

Credit Cards FFF BP Comps, Incubators, Agencies Angels VCs

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Angel Investors

• • • Exited entrepreneurs Live in the area Want to invest and help grow companies

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Where to find us?

• • • • • • Networking (AWE, MADV, PSL, PhillyTech Meetup) Universities with strong entrepreneurship programs Business incubators IP attorneys, SBA, venture capitalists, big four accounting firms and more Advisory and consulting firms Gust

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Philadelphia Angel Groups

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State-based Funds

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Other Early Funders

Before getting involved with angels:

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• • • • • Ensure you want a “partner” Be sure you’re ready to have a Board of Directors Understand that involving angels means giving up equity Know that your forecasts will be dramatically reforecasted (as will your valuation) Be prepared to deliver monthly financials and strategic updates

An Investor Pitch

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• • What it is • • An eight to 12-minute presentation with an investor focus Grabs attention early and keeps it by hitting highlights • Leaves the investor eager to know more What it isn’t • A technology presentation • • A sales presentation An opportunity to “get in the weeds”

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What’s the problem you are trying to solve How is the problem currently being solved Why are you the team to solve it?

What We’ll Want to Know

• What is the opportunity? How big is it?

• How do you make money?

• Do you have proof that customers will buy? Is it essential or a nice-to-have?

• Can you defend it in the market? What’s the secret sauce?

• Can you execute? Can you prove it with the management team’s track record?

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• What will you do with our money?

Sections and Flow

Title Slide Go to Market Strategy 12 Management Team Market Opportunity Intellectual Property Ask and Use of Funds Product or Service Description Competition Exit Strategy and Summary

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Executive Summary

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Connecting to RHV

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Good Luck!

www.robinhoodventures.com

Ellen Weber, Executive Director 3711 Market Street, 8 th Floor Philadelphia, PA 19104

Title Slide

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• • Include on the slide • • Company name, logo and date of presentation Ensure a highly professional image – get help if you need it Talk about… • • What your company does (high level) Open with a “wow statement” that commands attention

Market/Opportunity

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• • • • What is the problem your product or service solves?

How is the market solving the problem currently?

Why is your solution superior?

• • What is your value proposition Must be compelling and believable What is the target market and size?

• • • What segments are you addressing?

What are the size of each?

Prioritize segments; provide justification

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Product/Service Description

• • • • Briefly explain your product or service Why and how does it solve the defined problem?

Provide diagrams, photos, videos Avoid appearing too “emotionally attached” to the product

Don’t get in the weeds: this is not a sales presentation!

Competitive Landscape

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• • • • • • • What are firms and products are providing solutions to the problem?

Use pie charts to show market share of competitors What differentiates your product or service?

• Superior performance, lower cost alternative, lower side effects, etc.

How entrenched is the competition?

What are their weaknesses?

Perceptual maps can help in some cases What are the “barriers to entry” for others?

Intellectual Property

• What intellectual property do you have?

• • • Do you have a proprietary and defensible position?

Mention licensing arrangements, patents filed and what type Trade secrets, copyrights, trademarks, etc.

20 IP is an additional security blanket for investors

Go to Market Strategy

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• • • • • How will you reach target customers and drive revenues?

How will you make money (revenue model)?

• • • • Sell product or service direct to customer License technology Develop product then sell to competitor Merger-acquisition What are the key messages for your target market segments?

Describe marketing and sales plan What partnerships or alliances are necessary?

Taking it from idea to market success

People

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• • Management Team • • • List two or three key players: CEO is the focus List successful exits, impressive affiliations, inventions, discoveries, degrees, etc.

Acknowledge additional key players needed Advisory Board • • • List three or four highly impressive members Round out deficiencies or weaknesses of management team Notable industry experts, key executives or former key executives in your field/industry

Demonstrate you have the right team to execute!

Financials

($ 000’s) 2009 2010 2011 2012 2013

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Revenues Expenses EBITDA $ 277 $1,1418 ($1,155) $7,016 $4,075 $2,941 $17,299 $6,087 $10,252 $28,315 $9,178 $19,137 $39,706 $11,443 $28,263 • • • • • Minimum of three years’ financial projections Revenue, expenses and EBITDA are typical Chart form is preferred If you received funding, could you scale faster and become profitable sooner?

Be prepared to talk about break even analysis, etc.

Funding and Uses

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• • • • • How much have you raised to date and from whom?

Show founders investment and/or “skin in the game” from management team List current and future asks How will the funds be used?

For therapeutics and medical devices, show clinical trials milestone with needed funding

Exit Strategy

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• • • When will investors receive back their money?

What multiples are likely? Are there comparable exits?

• Provide examples where possible What will be the scenario?

• Acquisition by competitor or market leader • IPO (proceed w/ caution!)

Special Issues for Therapeutics

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• • • • • Revenue projections are often not relevant for therapeutics – that’s OK Long and expensive runways to commercialization • • Phase 1-3 studies are time and cost intensive Milestone charts demonstrate an experienced and knowledgeable CEO Higher failure rate compared to other technology sectors Show how you can mitigate risk Think out of the box for investment

Summary

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• • • • • Reiterate the market problem your product/service solves and why it represents a disruptive or superior approach State the large market potential and scalability of your business Emphasize you have the right team to turn idea into profits Thank the audience and solicit questions Put your logo and contact info on it.

Valuation. . .

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• • • • Delay talk about valuation until you’ve sold them on the idea • And never in an investor forum!

• Make it a closed door discussion An entrepreneur’s company is always worth less than he/she thinks Pre-money/early stage valuations are imprecise and difficult • Few assets, little cash flow Valuations are complex • • Science (formulas, number crunching) Art (how do you apply the numbers?)

Factors Affecting Valuation

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• • • • • • • • • Previous Investment Money required to achieve exit Time to achieve exit Market adoption and long-term market potential Competitive landscape Financials Value proposition Entrepreneurial ecosystem Investor comfort level