Pitching your Business for Funding?

Use this template!

Includes a live example inside!

Alok Rodinhood Kejriwal

Quick tour• I have seen first time entrepreneurs struggling to get their

funding ppt right.

• This deck (specifically targeted at Indian entrepreneurs) helps to solve that problem by suggesting what can go inside the ppt. There is a live example later.

• This slide can also be used by entrepreneurs to reflect on their own business and understand it better!

• I volunteer to be test driven (be the dress rehearsal audience) for your pitch and give you feedback!

• IMPORTANT – WARNING: This is not ‘the’ only way to make a funding pitch. There are important ‘Tips & Disclosures’ you MUST read (Slide No 49) before you attempt to make your own deck.

Start of Template TEMPLATE

State your Business/ServiceProduct/Platform Name clearly

Notes:1. Mention your Company’s name only if required.

2. State a tagline ONLY – repeat - ONLY if you really know what your business is about, or it’s an existing, established tagline. (Else, you risk creating an impression about your business that may spook the investors and/or start the discussion with a debate.)

Read – Tag Lines are out, Benefit Lines are in.

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Benefit Line

• What does your business do, for whom, and how?

– Try and keep it really crisp

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What is the Problem you are addressing?

• Clearly state the need or the pain that you have identified.

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Your Insight/sto Solve the Problem

• Powerfully & crisply explain how you have thought through a solution of this big pain-point that you have discovered.

• This will probably be the most important slide. The problem identified and solution found should be ‘business worthy’ enough to proceed from here on.

TEMPLATE

Visual Reference

• At this stage, it would be great if you show the PROBLEM and the SOLUTION visually.

• If your Startup is a website/app – set up a live link so that you can present it directly if required.

• Investors like to SEE the solution just as much as they can imagine it. – This also sets the stage to prove that you have a

prototype built out already!

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Your Business Proposition

• Describe crisply at a high level, what is your business proposition?

• What will you offer, to whom, why, for what and the benefits of doing so for you.

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How does your business work?• In simple language, explain the PROCESS of

executing your business.

• Use a flow chart, a logical sequence of screens or a live example (if you are very confident of it working*)

(*I have seen Internet connections fail, VCs not able to connect to their wifi setups, websites not responding, etc etc. It’s best to leave live examples for later.)

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Do you have proofof traction? (if any)

• If there is any proof of early success, show it! Talk about audience growth/customers using the service/brands signed up/clients who have paid/etc etc.

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The Market Size and Potential• What is the market opportunity? How LARGE

is the market for your solution?!

• Describe your vision of the long term market. How and why your solution will remain relevant (and grow) in the next 3-5 years? (Simply said, your concept should be forward looking – not backward thinking.)

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Competition Mapping

• Explain boldly, without fear, who is your competition, what they do, how ahead or near are they to you, who has funded them, has there been any acquisitions in this space?

• Clearly state how different you are from the competition.

TEMPLATE

Go to the Market Plan

• How will you go to market? What will be your strategy? Who will you go to and how?

• It’s best to show a literal 120-180 day plan that clearly bullets out the most important tasks you will achieve in your roll out.

TEMPLATE

What is the Core Strategy?

• Without hocus pocus and fancy ‘strategy’ charts, just explain the ‘No brainer’ reason why your business will succeed!

• The investor reading this slide should say, “Oh yeah, this makes so much sense!”

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Financial Modeling

• It’s important to discuss HOW to think of revenue MODELING – NOT ‘HOW MUCH’ revenue you will make here.

• The investor needs to understand that you get the MODEL right – then assume scale will apply itself.

• Having said this, have a clear understanding how large your business can ever become in revenue topline etc (It’s a fav VC question, “How large can this become?”)

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What are you looking for?

• Since it’s usually the money – simply state it!

• If it’s relationships, partnerships with portfolio companies, etc., ASK here!!

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Cash Flows

• Dimension the COST of doing business that you want to build here.

• Take an 18-24-36 month window and detail the COSTS (capex and P&L) here (not revenues) – to demonstrate what will it take to BUILD the business.

• Please factor-in some survival salaries for yourself and your partners in this slide.

TEMPLATE

Revenues and Scale

• If you have a clear vision, try and tabulate a SIMPLE table to understand Revenue projection.

• Please exclude silly calculations like ‘depreciation’ etc – it immediately sends a wrong signal to an investor - that this is a silly academic exercise.

TEMPLATE

Threats/Deaths/Weaknesses

• Can you be bold in detailing what could kill your business? What is your darkest nightmare that could come true? What are your weaknesses?

• It reassures the investor that you have thought with pessimism as much as with optimism and also saves him/her the time and energy from finding loopholes/pitfalls.

TEMPLATE

Outcome of the Business

• What do you expect your business to become?

• I would like to hear realistic ideas of WHO will buy your business and why (if it’s an acquisition etc.)

• If you think this is IPO stuff, then prove the companies in your industry who have listed (if any?)

TEMPLATE

The Founders and Team

• I usually present this last. Some decks present this first.

• The reason I keep this last, is that in the first few minutes itself, the entrepreneurs and investors (me for sure) discuss what each of them have been up to/done in the past.

• Please keep the points interesting and relevant. No one wants to read your bio-data here!

TEMPLATE

Did you have these Questions in mind?

• I do this for my pitches.

• I mention some mock ‘questions’ that may further explain the pitch better.

• Also, if a couple of investors ask you questions, then I can assure you that others will probably ask you the same ones. Add these here, as you go along your pitch process!

TEMPLATE

That’s it! Add the ‘Thank you’ slide!• Notes:

• I NEVER advocate discussing “valuations” and “what equity will you give away” etc at this stage.

• Investors want to think, discuss and come back with a ‘conversation’. Keep things and some topics open.

TEMPLATE

Sample Pitch SAMPLE PITCH ONLY!

Gamecurry.com!

Taking hot, free online games to Smartphones.

SAMPLE PITCH ONLY!

Gamecurry

Wants to partner owners of successful online games to migrate their titles to Smartphones, and in doing so, create a massive new revenue stream for the games owners and themselves.

SAMPLE PITCH ONLY!

The Market Problem

• Online web games attract over 600 million unique online players a month, but even the largest websites in this business earn meager revenues.

• The reason for low revenues is that these online games earn revenues only via ‘advertising’ – something that never scales and is difficult to optimize beyond a point.

SAMPLE PITCH ONLY!

Our Insight• If a popular online game is converted into a mobile game and

offered to consumers as a ‘free-mium’ game (free for the first few levels and charged for the subsequent levels), then the revenue potential from these games explodes.

• If a game has succeeded online, there is a good chance that it will work on smartphones also – because consumers like great game mechanics.

• Example – Angry Birds generated over 300 million $ last year. It’s a loose copy of a very popular online game called ‘Crush the Castle’ (a game that you have probably not heard of and one that did not generate any significant revenues).

SAMPLE PITCH ONLY!

Under the Hood• Illustrative example of how a smartphone game generates

200% of the revenue of an online game

SAMPLE PITCH ONLY!

Descriptions Online game Smartphone game

Players who play per day 1000 players 1000 players

Ads generated (10 ads per player) 10000 ads served 10000 ads served

Revenue generated @ US$ 1.00 CPM (per 1000 ads) per day

US$ 10.00 US$ 10.00

Cost of playing all 40 levels Nil 0.99 cents cost after the 20th level

% of players who will pay to play additional levels NA 2%

Paying consumers NA 20 players

Payment received from players -70 cents per user (99 cents less 30% net of iOs/Android share)

NA US$ 15.00

Total revenues earned per day US$ 10.00 US$ 25.00

Our Business Proposition

• Is to approach popular online game owners and propose that Gamecurry be allowed to convert their game to a smartphone game – without any cost to them and also with a promise to share a 50% revenue upside (after deducting our stated costs of making the game).

• As a Company, we want to fund the cost of the converting popular online games and benefit from the upside when these titles become successful.

SAMPLE PITCH ONLY!

SAMPLE PITCH ONLY!

How the business process will work

Proof of Concept

• We worked with online games Company games2win.com on this concept and were able to prove the hypothesis with one of their successful games called ‘Super Mom’:

SAMPLE PITCH ONLY!

Description Super Mom Free Web Game (link)

Super Mom Paid iPhone Game (link)

Revenue earned in 1st week of Jan 2012 in US$

$ 295.85 $ 1575.00

Revenue stream Only ads Ads and downloads

Per day revenue $ 42.26 $ 225.00

Cost of development of the game

$ 3000 (funded by the company)

$ 3000 (funded by us)

ROI time of the game 75 days 15 days!

The Market Size and Potential

SAMPLE PITCH ONLY!

Competition MappingCompany Primary Audience Revenue Stream Estimated Annual

revenues 2011

ngmoco Kids and Teens Virtual Goods on iOs 10-30 Million US$

Rovio (Angry Birds) All ages Download of Games 50-60 Million US$

Outfit7 (Tom Cat) Kids Download of Games 10-20 Million US$

SAMPLE PITCH ONLY!

• The early movers are scaling well in revenues. They will be our primary competition (in luring titles from online games companies for development and marketing by them).

• It’s possible that online game companies will want to migrate their online games to smartphone games themselves.

• We will win because we will go after smaller, lesser recognized and sometimes riskier, but better researched titles.

Go to Market PlanSAMPLE PITCH ONLY!

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Core Strategy – why will Gamecurry work?

What’s the Financial Model of GameCurry?

SAMPLE PITCH ONLY!

What are we looking for?

• 3 million US$ cash investments (covers 3 years of cash cost and basic Capex)

• Introductions to online game companies and game owners with whom we could get started immediately.

SAMPLE PITCH ONLY!

US$ 3.0 million over 3 years to be used for:

SAMPLE PITCH ONLY!

Cost for making 24 Freemium Games in 36 months

Cost per month in US$

Costs for 36 months in US$

Notes

Salary Cost of 3 founders 15,000 540,000 CEO, COO, CTO

Occupancy Cost 5,000 180,000Office rent for 25 seater office in South

Mumbai

General Office Overheads 2,000 72,000 General office costs

Technology Costs 4,000 144,000 Costs of Hosting, Bandwidth, etc.Game teams – 7

engineers/programmers, 5 artists, 3 creative, 2 marketing, 1

admin and accounts 36,000 1,296,000Averaged at 2000 US$ per person per

month

Travelling and Accommodation 10,000 360,000 Local and International traveling, etc.

Marketing and Advtg 10,000 360,000 Test marketing, PR costs, etc.

TOTALS 82,000 2,952,000Effective cost of each game = 123,000

US$

Revenues Potential of Freemium Games

SAMPLE PITCH ONLY!

Key Metric Addressable Audience

% who convert

Revenue per user – over the game life

Revenue Potential per game

Smash Hit 15 mn 20% 3.00$ 9 million

Huge Hit 15 mn 15% 2.00 $ 4.5 million

Hit 15 mn 10% 1.50$ 2.25 million

Just Miss 15 mn 2 % 1.25$ 400 k

Forgive and Forget

15 mn 0.5 % 1.00$ 75 k

Tragedy 15 mn 0.1% 0.70$ 10k

•Angry Birds has 12 million paying consumers from 41 million downloads – conversion of 30%•Talking Tom has 6 million paying consumers from 40 million downloads – 15% conversion

Conservative Revenue, Profits and Cash flow Projection of Gamecurry over 3 years

SAMPLE PITCH ONLY!

Key Metric – performance of the 24 games

Games that we will create in this category

Revenue Potential per game in US$

Total Revenues

Smash Hit Nil 9 million US$ 0

Huge Hit Nil 4.5 million US$ 0

Hit 1 2.25 million US$ 2.25 million

Just Miss 4 400 k US$ 1.60 million

Forgive and Forget 10 75 k US$ 0.75 million

Tragedy 9 10k US$ 0.09 million

Totals Revenues 24 total games 5.50 million

Less costs held back 3.00 million

Revenue available to share

2.50 million

Our 50% share and net profit

1.25 million

Our Threats/Deaths/Weaknesses

• Bad choice of choosing online games results in very poor hits and unsuccessful games

• Competitive market leads to games companies demanding minimum guarantee

• Changing revenue shares policies of iOs and Android market

SAMPLE PITCH ONLY!

Outcome of the BusinessSAMPLE PITCH ONLY!

The founders and team

Mahesh Khambadkone –CTO

He knows how to make games!

Alok Kejriwal – CEO

He knows how to run a Company, get it financed and how to market it and its products!

SAMPLE PITCH ONLY!

Did you have these Q’s in mind?

Q - Will gamecurry.com be a distribution channel also?

A – Yes. We will have a website and an app, but will not build it as a ‘destination’ site. We will let consumers discover it as they go along.

Q – Who will own the IP of the games developed by you?

A – It’s a good question. We will own the IP in the 50-50 ratio or higher depending on how we negotiate the deal (e.g. IP ratio starts with 100% when we launch the game and sets to 50% when we recover cost).

SAMPLE PITCH ONLY!

Did you have these Q’s in mind?

Q – How will you drive awareness of the apps? Isn’t marketing a big budget that doesn’t feature in your costs?

A – Well, we believe that selecting the right game type and title is half the battle won. Also, we will extract certain media promotion from the games publisher since it helps them. Finally, we believe that apps get discovered virally more than anything else. We just need to make fun, exciting apps!

SAMPLE PITCH ONLY!

Thank you for your attention!

SAMPLE PITCH ONLY!

IMPORTANT DISCLOSURES/TIPS• Copy the ‘template’ slides in a new PPT document and begin filling

them directly. (Remove the Rodinhood logos using the slide master.)• Do not refer to the ‘sample pitch’ unless you have to.• This is NOT a DEFINITE business plan. It’s worked for me for FIRST

ROUND pitches. Different investors expect different pitches. So use this at your own risk. There is important critical feedback about this deck (concerning number of slides and verbosity) available here that you should review.

• Describe yourself/your team mates when you feel comfortable. It could be the last or the first slide.

• My suggestions are not to discuss dilutions and valuations, etc in the first round. Let the ppt resonate in the investors’ mind and let them come back with ‘we like’ this before you start negotiating.

• I am happy to offer my services if you are interested. Contact me at alok@rodinhood.com

Your ideas!

• If you have counter viewpoints, opinions, ideas, etc., e-mail them to me. I will be happy to review them and add them as comments/reactions to this PPT!

Connect with me!

e-mail - alok@rodinhood.com

Facebook - facebook.com/rodinhood Twitter - @rodinhood

My social network for anyone enterprising!http://therodinhoods.com

Presentations –www.slideshare.net/rodinhood