Download - The Art of Tackling Investors
The Art of Tackling Investors
by Robert Barzelay
STEP 1
PREPARE
© www.GlobalStrategists.com 2 Robert Barzelay
Investor Presenta0on • Prepare your investor presenta?on. • Use Post-‐It notes for your planning. • Do NOT use PowerPoint or Keynote (yet). • Outline your thoughts and plans, and s?ck them on the wall.
• Produce a 1-‐2 page execu?ve summary and a 200-‐250 words teaser.
• Create presenta?ons of different lengths: of 1, 5, 10, 15, 30 and 45 minutes.
© www.GlobalStrategists.com 3 Robert Barzelay
© www.GlobalStrategists.com 4
The Team KNOW YOURSELVES • Your Skills Knowledge & Exper?se • Your Story Background & Experience
• Have any (or all) of you ever done this before? Individually? Together?
© www.GlobalStrategists.com 5 Robert Barzelay
Market & Compe00ve Intelligence KNOW YOUR MARKETS • Targets WHO and WHERE are your customers? • Pain What do your customers NEED? • Desire What do your customers WANT? • Money Are customers willing or able to PAY? • Compe00on WHO and WHERE are they?
© www.GlobalStrategists.com 6 Robert Barzelay
Your Product KNOW YOUR PRODUCT • Features Nice, but least important • Advantages Versus compe??on + current prac?ce • Benefits You sell benefits, not features • Price Can you make a healthy profit? • Uniqueness Must-‐Have or Nice-‐To-‐Have?
© www.GlobalStrategists.com 7 Robert Barzelay
Your Evidence • Needs Research • Proof of Market • Proof of Concept • Market Issues (regulatory, economies, poli?cs, etc.) • User Feedback & Results • SWOT Analysis:
– Your Company – Your Compe??on – The Market Environment
• Product Valida?on © www.GlobalStrategists.com 8 Robert Barzelay
Your Plans • Your Objec0ves What do you want to achieve?
• Your Financials How much will it cost to make & sell your product? How much money will you make?
• Your Strategies How will you achieve the above? © www.GlobalStrategists.com 9 Robert Barzelay
The Way you Present is as important as What you Present
© www.GlobalStrategists.com 10
STEP 2
LOOK FOR YOUR IDEAL INVESTORS
© www.GlobalStrategists.com 11 Robert Barzelay
Matchmaking • Do lots of research and soul searching. • Your strategies and financial needs need to match the strategies and expecta?ons of your financiers.
• Evaluate investors the same way you would evaluate poten?al clients.
• Do not just accept any investor – even not if you are financially in dire straits.
© www.GlobalStrategists.com 12 Robert Barzelay
© www.GlobalStrategists.com Robert Barzelay 13
Most investors will not sign an NDA. Live with it !!
Mentors, referrers and advisors
• Use them to open doors and to get introduced to poten?al investors.
• Some, but not all, ask for a retainer, a consul?ng fee and/or shares.
• Others like to get involved in your business venture, even make a (modest) investment themselves.
• Make sure that they do more than just pass on a name or business card.
© www.GlobalStrategists.com 14 Robert Barzelay
Machers, Schmoozers, Crooks, and Dubious Middlemen
Watch out for the greedy and malicious !!
© www.GlobalStrategists.com 15 Robert Barzelay
STEP 3
BE READY BE PREPARED
© www.GlobalStrategists.com 16 Robert Barzelay
© www.GlobalStrategists.com Robert Barzelay 17
Your Introduc0on • What do you do? • What problem(s) do you solve? • What is unique about your product? • How big is the market opportunity?
– bo#om-‐up, NOT top-‐down
• How big can your company get?
© www.GlobalStrategists.com 18 Robert Barzelay
Your Target Markets • What and where are your target markets? • How did you calculate your sales poten?als? • From where did you get details about this market’s industry growth rate?
• How did you determine that your product has a high growth poten?al?
© www.GlobalStrategists.com 19 Robert Barzelay
The Team Passion – Dedica0on -‐ Commitment
• Who are the founders and key team members? • What relevant experience does the team have? • What key addi?ons to the team are needed, and when? • Why is the team uniquely capable to execute the company’s business plan?
• How many employees do you have? • What mo?vates the founders?
© www.GlobalStrategists.com 20 Robert Barzelay
Product • Why would users care? • What are the major product milestones & KPIs? • What are its key benefits & USPs? • What have you learned from early versions? • Would you add features to your product? • If so, what will be the addi?onal benefits? • Give a demonstra?on of the product.
© www.GlobalStrategists.com 21 Robert Barzelay
Compe00on • Who are your compe?tors? • What gives you a compe??ve advantage? • What advantages does your compe??on have over you? • What are the barriers to entry for newcomers? • How did you find out about your compe?tors?
© www.GlobalStrategists.com 22 Robert Barzelay
Marke0ng • How do you plan to market your product? • What are your offline & online MarCom strategies? • How long does it typically take between the ini?al customer contact and the closing of a sale?
• What is the cost of a customer acquisi?on? • What is the projected life?me value of a customer?
© www.GlobalStrategists.com 23 Robert Barzelay
Trac0on • What trac?on do you have already?
– Trials & Tests – Demonstra?ons – Sales
• How did you get this early trac?on? • How can this early trac?on be accelerated and translated into (more) sales?
© www.GlobalStrategists.com 24 Robert Barzelay
Risks • What do you see are the main risks to your business? • Do you have any IP risks? • Do you have any regulatory risks? • Do you foresee any financial risks? • Are there any product liability risks? • Are there any staffing risks (hiring/resigning)?
© www.GlobalStrategists.com 25 Robert Barzelay
The Exit • What is the likely exit – IPO or M&A? • Or are you contempla?ng a management buyout? • How will the valua?on of an exit be determined?
© www.GlobalStrategists.com 26 Robert Barzelay
Intellectual Property • What key IP do you have: patents (applied/pending/issued), trade secrets, copyrights, trademarks?
• What comfort do you have that your IP does not infringe the rights of third par?es?
• How was your IP developed? • Would any (prior) team member or employee have a poten?al claim to your IP?
© www.GlobalStrategists.com 27 Robert Barzelay
The Financials • What are your 3-‐year projec?ons? • What are the key assump?ons? • How much equity and debt has the company raised; what is the capitaliza?on structure?
• What future equity or debt financing will be necessary?
© www.GlobalStrategists.com 28 Robert Barzelay
More Financials • How much of a stock op?on pool is being set aside for employees?
• When will the company reach breakeven? • How much will you burn un?l becoming profitable? • What are the factors that limit faster growth? • What are the key metrics that the management team focuses on?
© www.GlobalStrategists.com 29 Robert Barzelay
The Funds • How much money do you need? • What do you think is the pre-‐money valua?on? • On what basis has this been calculated? • Will exis?ng investors par?cipate in this round? • What is the planned use of proceeds? • How much money would you need in a next round?
© www.GlobalStrategists.com 30 Robert Barzelay
Valua0on • The biggest baple in all funding nego?a?ons:
– Those that seek money overvalue – Those that invest money undervalue
• As entrepreneur you have to: – Make investors clearly understand your business – Create trust so they will entrust you with their money – Convince them of the profit poten?als – Take the lead in your business
© www.GlobalStrategists.com 31 Robert Barzelay
Valua0on Methods None are absolutely right. All are based on guess?mates. • The VC Method: hpp://bit.ly/TTO7IL • The Berkus Method: hpp://bit.ly/HfeJLj • The Risk Factor Summa?on Method: hpp://bit.ly/WzxeEU • The Scorecard Method: hpp://bit.ly/eCYabw There is no perfect methodology for establishing the pre-‐money valua?on of pre-‐revenue seed/startup ventures.
© www.GlobalStrategists.com 32 Robert Barzelay
Challenging Ques0ons • Who believes in you? Can I get in touch with them? • Which entrepreneurs do you admire? Why? • How do you know how much money you need? • Could you build your business with less? • Tell us about a typical customer that uses, or poten?ally will use your product.
© www.GlobalStrategists.com 33 Robert Barzelay
More Challenging Ques0ons • How do you track trends in your market? • What will your market look like in 5 years from now as a result of using your product?
• Have you ever been fired from a job? Why? • What mistakes have you made in your career? • What have you learned in your life?
© www.GlobalStrategists.com 34 Robert Barzelay
Interes0ng Read hpp://bit.ly/12PlIpF hpp://bit.ly/p7qcn hpp://b.qr.ae/arn1u4 hpp://zd.net/Weahoa hpp://bit.ly/dlbnIo
© www.GlobalStrategists.com 35 Robert Barzelay
Rehearse ! Rehearse ! Rehearse ! Rehearse ! Rehearse ! Rehearse !
© www.GlobalStrategists.com Robert Barzelay 36
[email protected] http://www.GlobalStrategists.com