planning and communicating your business concept
DESCRIPTION
Speaker: Tony Redpath, MaRS Venture Group Advisor More information on this event, including a webcast: http://www.marsdd.com/Events/Event-Calendar/Ent101/2008/written-tools-20080213.htmlTRANSCRIPT
Slide 1
MaRS
`Planning andCommunicatingYour BusinessConcept
Presented by:
Tony Redpath,Business Advisor, MaRS DD
20 February 2008
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MaRS
Presentation Overview
Tools of the Trade
Myths and Truths
Overview of the Tools
The Elevator Pitch
The ‘One-Pager’
Executive Summary
White Paper
PowerPoint Presentation
The Business Plan
Outlines and Content
Advice
Slide 3
MaRS
Tools of the Trade
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Tools of the Trade
The ‘Elevator Pitch’ – 30 second outline of business concept
The ‘One-Pager’ – 1 page overview of your business
Executive Summary – 3-5 page overview of your business
White Paper – Layman’s summary of your technology, product(s),
the uniqueness and the value
PowerPoint Presentation – ~15 slide outline of your business
opportunity
Business Plan – Detailed description of your business plan: product
plan, go-to-market strategy, management team and financials.
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Why do we need these tools?
These tools are generally used to:
Lay out a vision and plan for building the business
Solicit investment - by communicating to investors why your idea is
good, how you will execute and what return they can expect
Communicate to customers - why they should do business with you
Communicate to partners - why they should do business with you
Communicate to employees or potential hires – what is the mission
and plan is and what role they will play
These tools are used for planning and communication
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Communication vs. Business Planning
The primary purpose of these documents is to communicate the
value of your business idea – EXCEPT THE BUSINESS PLAN.
Be conscious of the huge difference between communicating your
business concept and building your business plan.
A business plan is an internal planning document seldom shown to
anyone outside the company
The other documents are external communication documents used
to sell the value of your business idea to outside parties
Business plans are an internal execution tools
The other documents are external communications tools
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Keys to Communication
Know your audience:
Institutional (Financial) investor, Strategic investor, Angel investor, Strategic partner,
Customer, etc.
Speak to your audience in language that they understand:
Institutional investor – do not speak ‘techie’, tie everything back to money
Strategic investor – may be more technical; will be interested in your idea’s as they impact
their business
Strategic Partner – mix of technical and business; understand how a relationship will be
mutually profitable to both parties
Angel Investors - access their background; understand their interests
Customer – understand their needs
Give your audience the information they are looking for:
Do not assume they want to see the depth of your scientific knowledge
Speak to them with their interests in mind, not your interests in mind
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Myths and Truths
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Myths and Truths
Myths:
That you only have 30 seconds to get a VC’s attention
If you get develop your communication tools right, you will have longer than that
That a VC will ask you for all of these documents
That you should start by building your business plan
Truths:
What you can provide depends on how far along you are in developing your
business concept
The vision you are communicating must be grounded in reality
You should be strategic about what you provide and when you provide it
That your documentation should radiate professionalism – grammar, spelling,
diction, illustration, layout, etc.
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Overview of the Tools
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The Elevator Pitch
What:
A 30 second overview of your business concept
To a certain extent, an internet bubble invention – at least in terms of raising money
Strangely enough - 60% of the worlds venture capital is in the bay area in low-rise
office buildings without elevators
Why:
To quickly communicate your business concept in a chance meeting or phone call
When:
In a cold call to an investor, customer, potential partner, etc.
Good for networking at trade shows, networking events, etc.
Dos and Don’ts:
Do not spend forever practicing and refining this – should come naturally; may sound
plastic
Figure out a few key messages you would like to get across to use as a loose script
Distribute key messages to outward facing employees – standardize message
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The ‘One-Pager’
What:
A concise one-page summary of your business concept and management team
Why:
A ‘teaser’ document meant to generate a request for more information
To offer a very general non-confidential overview of your business
When:
When blasting out to many potential investors – select interested VCs from large list
When you don’t want to offer any confidential details – chance encounter, potential
competitor,etc
Dos and Don’ts:
I’m not a big fan – Part of ‘shotgun’ approach to fundraising, not my preferred method
Often just enough detail to say no
Often adds an additional and debatably unnecessary stage to a process - VCs might sit
on the one-pager for a few weeks
If you are going to build one, make it fairly non-contentious and allude to missing
information
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The Executive Summary
What:
A concise 3-5 page summary of your technology, product, sales plan, revenue path and financial
requirements
Significantly more detailed but succinctly expressed, coherent and highly readable
Why:
Again, a ‘teaser’ document meant to generate a request for more information or a meeting
Readers will want to get their head around the concepts quickly – short attention span
Primer for a more detailed explanation of your product plan and business strategy
When:
When you have a ‘warm’ intro or an invitation to contact someone
Integral first interaction with an investor
Rides the line between confidential and non-confidential – some degree of trust
Dos and Don’ts:
This is a critical communications tool – imperative that it is strong and well written
Has to have the right emphasis given the maturity of the business concept - Tech, Sales, Revs
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The Whitepaper
What:
A fairly concise layman’s summary of your technology, product(s), the uniqueness and
the value
Why:
Not all (or few) investors will be scientists, engineers or experts in your area of
innovation
You have to go easy on the technical details in the communications documents
This is the place to fully display your technical knowledge and product vision
When:
After investors are curious or have bought into the big picture business vision
Great to give to customers and partners to help them communicate internally
General education of analysts, customers, potential partners, etc.
Dos and Don’ts:
Put the whitepaper on your website
Stay high level - Don’t go so deep as to give away all of your secrets
Keep it as short as possible and fully explain all acronyms
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The PowerPoint Deck
What:
A ~15 slide outline of the key aspects of your business plan
Why:
Provide an overview of the business plan in point form
Allows people to absorb a lot of key information in a short period of time
Easy to adjust and adapt to a new audience
When:
Usually the second piece of information a VC will receive after the exec summary
VC’s love these because they can flip through them very fast
Medium to Highly proprietary – requires a greater degree of trust
Dos and Don’ts:
Critical document in the fundraising process –present a sound story; make it look good
Practice speaking to it, preferably in front of friendly people who will ask lots of questions
Use graphics as much as possible – max absorbance of information
Tune emphasis given the maturity of the business concept
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The Business Plan
What:
A rigorously prepared and executable description of how you will build your business
Why:
This is your roadmap for how you are going to build your business
Describes roles and responsibilities for building various aspects of the business
Outlines revenue targets, financial details and investment requirements
When:
When you have assembled enough solid information to write it
Highly proprietary – requires a high degree of trust to give it out; later stages of
diligence
Wait for the VC to ask for it
Dos and Don’ts:
Often made a condition of financing or a board requirement – can provide after the fact
Re-write with every major change in strategic tack
Avoid the temptation to turn this into a sales tool – preserve its integrity as an
executable
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Outlines and Content
Slide 18
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Executive Summary ~ 3-5 pages
Company Description – 1 paragraph
Basic Need and Company Solution - 1 paragraph
Technology and Product(s) - 1 paragraph; diagram
Value Proposition – couple of bullets
Market Size and Growth - diagram
Sales Plan - 1 paragraph
Competitive Advantages – couple of bullets
Management – detailed bullets
Revenue Growth Projections - diagram
Financing Requirements - 1 paragraph
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MaRS
PowerPoint Deck ~ 15 slides
Company Overview, Management and Vision – 2-3 slides
Need and Existing Solutions – 1-2 slides
Technology, Products and Product Rollout – 2-3 slides
Market Opportunity – 1 Slide (Graphical)
Competitive Overview – 1 Slide – (Largely Graphical)
Sales Strategy and Channels - 2-3 slides
Partnerships and/or Partnerships strategy – 1 slide
Financials and Path to Liquidity – 2-3 Slides (Largely Graphical)
MaRS Venture Group
A MaRS Starter Guide for Entrepreneurs
The Pitch Deck.
Draft Version 5.2 April 16, 2007
For Discussion Purposes Only
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MaRS
The Business Plan ~ 30 pages
Executive Summary
Company and Opportunity Summary
Product and Technology
Market Size and Growth
Sales and Marketing Plan
Competitive Overview
Operations Plan
Management Team
Financials and Investment Requirements
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Advice
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Advice from the trenches…
Do not start by building your business plan
You will not have the information you need
You will examine issues out of priority
You will expose lack of understanding
Do not offer to supply a business plan off the bat
Start dumping your ideas into the Powerpoint Deck
Use the Powerpoint Deck as receptacle for all ideas and information that comes to light
– easy to manipulate, organize and adapt
Build your executive summary and eventually your business plan based on your
Powerpoint deck
Give investors your exec summary and offer to walk them through the Powerpoint slides
in person or on the phone
Slide 24
MaRS
More advice from the trenches…
The main idea of all of this is to entice investors to take a deeper look
Leave the details for diligence (except in the business plan)
Do not assume that your audience is technically literate or savvy
Investors predominantly come from a financial background
Do not overload the documentation
Try to get across a few key messages instead of telling the whole story
Your audience will only absorb the key messages
Do not make your information detail rich / noisy – Use graphics as much as possible
Templates exist for all of these documents
Don’t re-invent the wheel
Surf the web or go to www.marsdd.com
Email me: [email protected]
