VA FIELD GUIDES PRESENTATION SERIES www.venturearchetypes.com San Francisco P: 415-370-5060 | New York P: 917-539-5995 VentureArchetypes Field Guide Series – Quick Start Reference Sheet Before you begin, plan: The process of writing your business plan will help you to: • Capture, test, and refine your vision and business model • Align your team toward a common goal • Maximize the probability of successfully raising capital Who should be involved? • Senior management (C-Level and VP) • Board of Advisors and other key stakeholders • External parties, such as key customers or partners How long will it take? • Typically, a minimum of 3 weeks to 3 months; 150 hours is not uncommon What should you focus on? • Setting measurable milestones, and the supporting strategies, tactics and actions necessary to meet those milestones. • Identifying risks and developing strategies to overcome such risks • Developing your sustainable competitive advantages What else do you need to do? • Develop your plan first; addressing the key elements listed here will give you the answers to handle difficult investor questions • Build a supporting financial model that tells your “story” in numbers • Write an executive summary to be used as a marketing tool • Communicate your business through a succinct elevator pitch and a compelling PowerPoint slide show Key Elements of a Successful Business Plan: Market Opportunity Establishes the case for “why the world needs your solution” Provides market size, growth, trends, and customer information Company and Products Explains how your product meets or exceeds the market need Operations and Development Lays out launch, growth, and expansion strategies and tactics Existing Relationships and Future Alliances and Partnerships Discusses who will help you succeed and why they will do so Marketing, Sales, and Distribution Demonstrates how you will gain awareness, close deals, and get product to market Competition Describes competitive environment as well as your advantages and differentiation Management Background on who is running the show; Demonstrates credibility Financial Shows how you will make money, your funding needs and uses, and how you will provide a return to investors 12-Step Capital Raise Process: 1. Generate initial, broad database of potential investors 2. Screen by geography, stage, and sector focus 3. Filter out those with direct competitors 4. Research most appropriate partner within each firm 5. Generate initial target investor list; filter by best matches 6. Leverage your network to gain “warm” introductions 7. Make contact; generate list of interested parties 8. Arrange pitch meetings to present business plan, demo, etc. 9. Seek second meetings leading to initial due diligence 10. Engage in due diligence on the investor(s) 11. Gain term sheets; begin negotiations 12. Execute share purchase agreement About VentureArchetypes: VentureArchetypes, LLC is a business planning, corporate development, and strategic advisory boutique that works with emerging technology and life science companies. We help startups develop compelling investor materials and formulate appropriate capital-raise strategies. Our mission is to help create the next generation of Silicon Valley success stories. Products and services include: •Business planning and new venture strategy •Investor materials development •Corporate presentations, pitch books and pitch coaching •Financial/revenue modeling •Early-stage corporate development services •Capital raise strategy and advisory services •Investor outreach and management programs Top-Ten Common Mistakes Made By Entrepreneurs: 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Underestimate the amount of time needed to raise capital “Build it and they will come” + technology-centric mentality Lack of customer focus and market validation (see #9) Weak strategy and lack of a true, tactical roadmap and plan Poor understanding of the financial model and cash needs Poor presentation, pitching, and communication skills Unfocused investor outreach program Endless analyzing without execution Not building momentum with investors Doing it in a vacuum, without help More Food for Thought: Nothing excites investors (or validates your idea) like actual, paying customers. Next best? LOIs, MOUs, beta trials, initial feedback. You may or may not ever be asked for the entire plan, but it is the solid thinking that goes into developing one that will lead to investment. Positioning your company correctly with a clear, compelling story and polished presentation materials + targeting the right investors through warm referrals + demonstrating your execution credibility through early sales or partnerships = the “Perfect Storm” for raising capital and maintaining negotiating leverage. COPYRIGHT 2006-2008 VENTUREARCHETYPES, LLC Proprietary & Confidential