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					Helping Georgia entrepreneurs build
great technology companies




        Communicating with Investors
                 September 9, 2008
                 Lance Weatherby
Agenda
• Investor Toolkit
• Presentation Deep Dive
• Top Tips
Agenda
• Investor Toolkit
• Presentation Deep Dive
• Top Tips
Tools for Telling the Story
•   One-liner
•   Positioning Statement
•   60-second Pitch
•   Executive Summary
•   Business Model
•   Business Plan
•   Presentation
Executive Summary
• One page summary of your business
• Same “storyline” as presentation
• Easy read to determine if they want
  more information
• Must be compelling enough to stand
  alone
• Makes you focus on the most important
  points
• What you send
Business Model
•   It’s a spreadsheet
•   Lots of assumptions
•   Identifies key business drivers
•   Answers the “how much” question
•   Feeds other docs
Business Plan
• Good exercise to make you think
  through the business
• Won’t be read cover to cover
• 20 pages maximum
• Financials
• Put details in appendix
Agenda
• Investor Toolkit
• Presentation Deep Dive
• Top Tips
Investor Presentation
• Used for forums, large audiences
• Tells a story
• Same story is used in executive
  summary and business plan
The Storyboard
• Need consistent, compelling story
• Format, length, and emphasis vary
  based on the audience
• Order of contents should be changed to
  highlight strengths of the business
• Tell what you are going to say
• Tell the story
• Tell them what you said
13 Ingredients of Presentation
1. The Hook       7. Business Model
2. Market pain    8. Go to market
3. Solution       9. Team
4. Competitive    10. Financials
   advantage      11. Current Status
5. Market size    12. Summary
6. Competition    13. Billboard
The Hook :: Overview
•   Use a hook: an exciting statistic or story to
    get the audience engaged
•   But get to the point
•   One-liner to clarify what you do
•   Set the context for the remainder of the
    story
•   Optional overview slide
    “80% of all telecommunications bills are
     inaccurate and customers are typically
            overcharged by 20%!!”
Overview
Overview

  DeepDive Vision
  Address the huge untapped opportunity to secure
    the iPhone and Android mobile environments
  • Founded by a world-class team of Internet security
    entrepreneurs and technologists with successful startup
    experience
  • Meaningful development & customer traction
     – Product trials secured
     – Beta released



        Seeking funding to accelerate the vision by building out
           the technology and securing the customer base
Market Pain
• Identify a large, costly pain that must be
  addressed
• Use statistics or customer quotes to
  validate
• Use illustrations or examples
Market Pain
 • 80% of all telecom invoices are incorrect
 • Typical enterprises over spend for telecom
   services by at least 20%
   – 10% of services they don’t need
   – 10% from billing errors


   US businesses spend over $50B more
    than they should for telecom services


             *Source: Gartner Group – 2007 State of Telecom Report
Your Solution
• How are you solving this problem in a
  unique way
• Use illustrations or examples
• Show before vs. after
  charts/stats/illustrations
DeepDive Solution
D2 Solution

                                    D2 Enterprise
                                  Typical Enterprise
                                  Email Environment

                                      Trend      Mail      Tumble-
                       Sendmail       Micro    Sweeper      weed




             Secure                                              Anti-
            Platform                                             Spam    Mail Servers


                                     Anti-    Policy &   Secure
Perimeter              Proxy
                                     Virus
                                     Anti-    Content
                                              Policy &   Delivery
                                                          Secure
                       Proxy
                                     Virus    Content     Delivery


                                  FirstAct Services
Competitive Advantage
• What is your unique solution that allows
  you to solve this problem
    • Use diagrams/illustrations
    • Avoid industry jargon
•   Sources of the intellectual property
•   How is it protected or protectable
•   Resist temptation for Geek Speak!
•   They assume technology works
DeepDive Competitive Advantage
   Block     Determine email         Generate spam                Enforce             Get     Adapt and
  attacks       attributes               score                     policy          feedback    update

    D2                                     D2Act
                                Updates * Policies * Signatures
  Secure
 Platform
                  Lists
             “Automated white
                  listing”
                                                                      Quarantine
                                                                         • Admin
                Content                                                • End-user
                Analysis
                “Bayesian”               Spam
 EMAIL                                                                  Accept
                                       Correlation
                Heuristics                                               Label
              “SLS Bulk Email           Engine
    Mail         Detection”                                            Limit Rate
  Firewall                            Enterprise Spam
      -                                                                 Reject
                Anomaly
  Mail IPS
                                          Profiler
                Detection                                                   Drop
                 Engine



                  Accurate, effective, low administration
Market Size
• Show that this problem is large and
  effects many
  – Validate with statistics and sources
• Be sure to segment your target market
  properly
  – Pie charts
• Demonstrate market growth
  – Charts
  – Analyst quotes or stats
Market Sizing

                Mobile Application Use
                                                                                 Appeal of Service
                                                   Discrete
                                                     40%
                                                              Remote
   Never                                                      Access
    22%                                                                                                  Consider Appealing


                                                              Online                                     Likely to Subscribe at
                                                                                                         $5/month
                                                              Backup


                                                                    0%     10%     20%     30%     40%
                               Highly                                  Percentage of Broadband
                              Engaged                                        Households
                                33%


  Source: Digital Divisions. Pew Internet & American            Source: Making the Network Work, Parks
  Life Project                                                  Associates




       •      66 million people in the highly engaged category
       •      Extrapolated the Pew audience to the Parks research “likely to subscribe” percentages
       •      Results in market of $1.6 billion
                  Market is significant and poised for growth
Competition
• Identify competitors and potential
  competitors
• Include alternate methods to solve the
  problem
• Position yourself vs. your competitors
• Identify your unique, defensible
  competitive advantage
• Don’t say “no competition”
CompetitiveAnalysis
Competitive Analysis
  DeepDive Core Competitive Strengths
  • Unique insight into wide range of mobile security environments
  • Unmatched credibility and respect within Internet security ecosystem
  • Proven ability to deliver massively scalable and reliable solutions


 Competitor                  Comments
 MobileTopia                 •No meaningful Internet security experience
                             •Significant credibility problems, not scalable
 IC Secure                   •No knowledge of mobile technologies
                             •Limited capacity to do software development
 Akamobile                   •Want to only sell data center servers
                             •No on handheld experience
 SecMob                      •Immature
                             •Limited security industry experience
                             •Solutions generally carrier specific
 SecureStream                •No knowledge of mobile technologies
                             •No experience scaling
                                     23
Business Model
• How is your product/service delivered?
  – Requires professional installation
  – Self serve
• How is revenue generated?
  – License
  – Subscription/recurring revenue
  – Maintenance
Business Model Highlights

       Revenue Streams                       Price Ranges
        Carriers                             •$2.95
           • Rev Share
       Enterprise                            •$15K – 25K/unit
           • SaaS                            • $0.10 - $1.00/sub/mo
           • Professional services
       Software Developers                   • $0.20 - $1.00/sub/mo
           • SaaS

 •   Current monthly burn rate: $30K
 •   Revenue split: 67% security provider, 33% carrier
 •   Total cash needed to breakeven: $4.5 million
 •   Success-based expense controls: capital, headcount, support



       DeepDive’s straightforward business model taps into well-known
       existing mobile models and allows for great growth opportunity
                                        25
Go To Market Strategy
• How will you market your product?
  – Partnerships
  – PR
• How will your product be sold?
  – Direct sales
  – Channels
  – OEM
Go To Market Strategy
  • Marketing
    – Strategic partnerships
       • Apple AppStore
       • Open Handset Alliance
    – Sales
       • Leverage Apple relationship
           – AT&T
           – AppStore developers
       • Domestic carriers
           – Verizon trial in process
       • Target enterprises with security concern
       • Passive sales to ISVs
The Team
• Mention key team members
• Show their relevance to this business
  – Serial entrepreneurs
  – Sales experience
  – Managerial and finance experience
  – Industry/market knowledge
• Include key advisors and Board
  members
• Identify gaps and next hires
The Team
  • Lance Weatherby - Cofounder & CEO
      – General manager of EarthLink’s mobile wireless business unit
      – Led business development, marketing, product management &
        product development at MindSpring
      – CipherTrust CMO
  • Robert Sanders - Cofounder & CTO
      – CTO at MindSpring, cBeyond, & Vitrue
      – Proven expertise in designing and implementing scalable systems
        for Internet services
      – Architected EarthLink’s mobile wireless services
  • Guru Rajan - Cofounder & VP Engineering
      – Vice President of Messaging Security at Secure Computing
      – Cofounder and Chief Architect of CipherTrust
      – Cofounder of S1
  • Additional Early Hires:
      – Developers
      – BizDev lead
  • Board of Advisors
      – Merrick Furst - Professor of Computing at Georgia Tech
      – Phil Schiller - SVP Product Marketing, Apple
Financials
• Provide high level 3-5 year projections
  – Revenue, expenses, and net income
• Cash flow forecasts
• How much funding will you need, now
  and in the future?
• Uses of funds
• Derived from business model
Financials
                                          2002     2003     2004      2005      2006
   (dollars in 000's)

   Revenues
    Software                                $13     $443    $4,709   $14,213   $27,577
    Services                                  5      738     2,867     7,512    13,911
    Other                                    74       81        36        21        18
   Total Revenues                            91     1,262    7,612    21,746    41,506
     Implementation and Operation Costs      45      380     1,914     4,590     7,411
   Gross Profit                              46      882     5,698    17,156    34,094
    Gross Margin                           50.3%    69.9%    74.9%     78.9%     82.1%

   Operating Expenses
    General & Administrative                241       366    1,923     4,281     7,166
    Selling & Marketing                     131       272    1,853     5,191     9,071
    Product Development                       5       413      966     2,075     3,437
    Total Operating Expenses                377     1,050    4,742    11,547    19,675
   Operating Income                        (331)    (168)     956      5,609    14,420
    Operating Margin                         NM       NM     12.6%     25.8%     34.7%
   Net Income                              (329)    (147)     756      4,054    10,383

   New Accounts
   Total New ASP Accounts                              12       25        44        67
   Total New License Accounts                           2       20        68       124
   Total new Accounts                                  14       45       112       191
Financials
                       Year 1        Year 2       Year 3
 Revenue                $50,000      $250,000    $1,500,000
 Expenses              $300,000    $1,400,000    $3,500,000
 Net                  ($250,000) ($1,150,000) ($2,000,000)


  • Seeking $1.5M
       – Complete version 1.0
       – Hire devs, VP BizDev & Sales
       – Milestone: Launch v1.0 with 3 Beta customers


  • Raise $3M in Year 3
Current Status
•   Highlight milestones and successes
•   Show customer traction
•   Previous investments received
•   Upcoming milestones
Status & Roadmap
 2008                             2009                          2010

   Development and initial customer traction
        + Build out core end to end system
               + 2-4 representative trials
                    + Build initial data center(s)
                      + 10 – 20 mobile apps

                              General launch initial product offering
                                + Market core service offering
                                       + First big deployments
                                              + Expand system scalability
                                                    + 100’s of mobile apps
                                                Roll out advanced services

                                                + Premium subscription svcs
                                                       + Personal Protection
                                                             + Killer apps

                                         34
Summarize
• Summarize 3 main points you want the
  audience to remember
• Be prepared to answer questions
  – Brainstorm and anticipate questions
    beforehand
  – Have backup materials ready to support
    your answers
Summary
 • DeepDive poised to address huge untapped
   opportunity to bring Internet security to mobile
   applications

 • No company adequately addressing the needs of the
   market
 • Management has relevant experience
    – Mobile Internet & security pioneers
    – Built scalable systems and businesses to successful exits
 • Right opportunity
    – Secured trial customers
    – Immediate customer needs
    – Scalable model

       Now is the time to accelerate the vision by building out
          the technology and securing the customer base
Helping Georgia entrepreneurs build
great technology companies




                  Lance Weatherby
                  Venture Catalyst
                     lance@atdc.org
                      www.atdc.org
                   www.peachseedz.com
Agenda
• Investor Toolkit
• Presentation Deep Dive
• Top Tips
Presentation Tips
•   Use bullets, not sentences
•   Speak to the back of the room
•   Show passion and energy
•   How you say it is more important then
    what you say
•   Get to the point
•   Put detailed slides in Appendix
•   Do not read slides!
•   Practice, practice, practice
Don’t You Dare Say!
• “We don’t have any competition”
• “These estimates are conservative”
• “Our exit will be an IPO or an
  acquisition”
• “I need you to sign an NDA”
• “Based on our projections, your
  investment of $2M will give you a return
  of $30M in 3 years!!”
10 - 20 - 30 Rule
• 10 slides
• 20 minutes
• 30 point typeface
  – This line is 28 point, anything smaller is a
    mistake
• http:www.presentationzen.com
Writing Tips
• Clearly explain
  –   The market
  –   Your unique/innovative technology
  –   Management team
  –   Financials, stage of company and use of funds
• Be concise
  – 1 page is 1 page
  – More is less, a lot less
• Spell check!
• Make sure the documents are consistent
Q & A Tips
• Answer the question, bridge to your pitch and
  shut up!
• “Yes” and “No” are answers
• Be honest, not defensive
• You don’t say…
  – “Well honestly”
  – “That’s a good question”
  – Or any variants thereof
• Have a teammate take notes
• The CEO directs others
• Practice, practice, practice
Be Found
• Put contact info on every document
• Include company name in all files
• Include company name in email subject
  lines
Helping Georgia entrepreneurs build
great technology companies




                   Lance Weatherby
                   Venture Catalyst
                      lance@atdc.org
                       www.atdc.org
                    www.peachseedz.com

				
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posted:8/21/2010
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