Post on 19-Mar-2017
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How to Pitch to Investors
Frank RimalovskiExecutive Director, Entrepreneurial InstituteManaging Director, Innovation Venture FundMar 4, 2017
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Topicsu When to Pitch
u Role of the Pitch
u Before the Pitch
u Elements of a Good Pitch
u Frank’s Pet peeves
u Q&A
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When to pitch?
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Venture Funding Lifecycle
4
①Discovery
②Validation
③Customer Creation
④Company Building
Test assumptions aboutcustomer needs/problem & develop MVP
SeekValidation that people are interested in your solution
Begins to builddemand & improve efficiency of customer acquisition
Drive growth aggressively & execute business model
Invention & ideation
Grants, Competitions Founders + Credit cards
GrantsCrowdfounding
CustomersSBIR/STTR + Accelerators
Friends & family
Angels Seed funds
Venturecapitalfunds
LeasingFactoring
Vendor financePrivate equityPublic markets
Valuation*
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Role of the pitch?
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Why do we pitch?
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To raise money?
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To sell shares!
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Raise money when you can raise it!Not just when you need it!
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The Other Role of the Pitch
u Investor pitch is a proxy…
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The Other Role of the Pitch
u Investor pitch is a proxy…for your ability to:
o Recruit talent & lead a team
o Sell to customers
o Attract partners
u Tell a story & engage your audience
u Cover the bases…not just your product/tech
u But, it doesn’t stop with your pitch deck
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But, you definitely will not raise money on a bad 1st pitch
You will not raise money solely on a great 1st pitch
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Goal of the pitch is to get another meeting!
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Before the Pitch
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Critical Questions to Answeru When to raise & why now?u How much to raise?u What are you looking for in an investor?u What will you spend the money on?u How long will it last?u What will you accomplish?u What are investors looking for in you?u Why should they invest in you?u How will they make money by investing?u Will you need to raise more? If so, how much &
when? What are those investors looking for?
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If you can’t answer allthose questions, you are not ready to raise!
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Exploratory/feedback meetings (aka customer discovery!)
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Investor Considerationsu Stageu Sector focusu Fund lifecycleu Recent activityu Lead or follow?u Investment paceu Typical check sizeu Potential warm introsu Value added servicesu One & done or follow-on?u Directly competitive portcos
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Information Sources
Crunchbase/CB Insights/
AngelList
Fund Websites/
Blogs
News/MediaMentors/
Coaches/Other Entrepreneurs
Service providers
Entrepreneurial Institute
Team
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Elements of a Good Pitch
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Outline1. Welcome: Your biz thesis; 10-20 secs to engage2. Problem: You solve & who you solve it for (target customer)3. Solution: Your solution with compelling, quantifiable benefits4. Product: Your product, how it works & evidence that it does5. Revenue Model: How you make money6. Market: How much money you could make if you dominate7. Competition: Who they are & why your solution is better8. Cust Acq: How acquire & retain customers, profitably & at scale9. Unit Economics: How much money you make10. Traction: Proof that customers/users love your product11. Team: Experience/expertise to own this opportunity12. Funding: How much, uses, accomplishments & runway13. Summary: Market + Differentiation + Team + Traction
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Welcome
GleamrA m a rke taUber for mobile auto details
“Get an affordable, professional auto detail wherever you are, whenever you want”
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
On demand
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ProblemProblem 2
Busy consumers lack an easy way to get their car professionally detailed at their home or office
• No single view of currently available detailers• Few reviews to guide selection• Little opportunity to negotiate prices• Visiting a detailer’s shop takes too much time
Mobile auto detailers spend too much time/money finding customers when they would rather be detailing cars
• Spend ~$12K/year on marketing (National Auto Detail Assoc.)
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
Too broad
• quantify problem/frequency
• quantify downside of “too much time/money”
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SolutionSolution 3
Gleamr iPhone app and website. “Get an affordable, professional auto detail
wherever you are, whenever you want”
SAVETIME
detailers come to their home or office
SAVEMONEY
detailers compete for their business
GREATJOB
detailers work hard for great reviews
CONSUMERS
SAVETIMEless time
chasing customers
MOREMONEY
more timedetailing cars
GROWFASTER
great reviews + great prices = more work
DETAILERS
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
Show me the Money
Show me the Money
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ProductProduct 4
2. COMPARE REVIEWS & PRICES
1. BROWSE AVAILABLE DETAILERS
3. SELECT, BOOK & PAY
Amazing screenshot
Amazing screenshot
Amazing screenshot
• Option to add tip after job• Review required after job
• Standardized services & prices• Detailer can discount (bid) on
the fly based on demand
• Filter by date/time/availability/ratings/reviews/bid
2 patents pending
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
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Revenue Model/Unit EconBusiness ModelHow we make money
5
We charge detailers a 15% transaction fee
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
GleamrJob $75.00Detailer $63.75Gleamr $11.25
Gleamr’s fee is a cost of revenue w/ guaranteed ROIvs. a marketing expense w/ no guaranteed ROI
COGS ?
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MarketMarket Top Down – USA only
7a
$36Billion
TOTAL USAUTO DETAILING
Source: [Some reputable source]
$12Billion
MOBILE US AUTO DETAILING
Source: [Some reputable source]
~$2Billion
GLEAMR MARKET OPP15% transaction fee
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
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MarketMarket Bottom Up – USA only
7b
US Autos on the Road1 270 Million
Total Detailed @ 33%2 90 Million Total Mobile @ 33%3 30 Million
Mobile Details per Auto per Year 6
Total Mobile Detailed per Year 180 Million
Average Mobile Detail Price4 $75
Total Mobile Detail Sales per Year ~$14 Billion
Gleamr Opp. per Year @ 15% ~$2 Billion
1. [Some reputable source]2. [Some reputable source]3. [Some reputable source]4. [Some reputable source]
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
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CompetitionCompetition 8
MORE CONVENIENT
LESS CONVENIENT
LESS EXPENSIVEMORE EXPENSIVE
Gleamr
CompetitorLogo
CompetitorLogo
CompetitorLogo
CompetitorLogo
CompetitorLogo
CompetitorLogo
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
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Customer AcquisitionGrowth Strategy How we will scale our business
9
• Online marketing inc. SEM, SEO, SMM, daily deals
• Refer-a-friend discounts for consumers
• Volume/loyalty discounts for consumers & detailers
• Incentive programs for HR and office managers
• Dedicated customer service reps for each DMA
• Gleamr staffed community message boards for consumers (public) and detailers (login required)
• Consumer Product Advisory Board to drive consumer features
• Detailer Product Advisory Boardto drive detailer
features
• Add Android App
• Add Website
MARKETING& SALES
Acquiring customers
CUSTOMERSERVICE
Keeping customers
PRODUCTDEVELOPMENT
Staying competitive
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
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TractionTractionDetailers and consumers love our service…
6
Detailers Users Jobs GrossRevenue
GleamrRevenue
LAUNCH0 0 0 $0 $0
June10 100 90 $6,750 $1,013
July50 500 450 $33,750 $5,063
August200 2,000 1,800 $135,000 $20,250
Sep400 4,000 3,600 $270,000 $40,500
Oct800 8,000 7,200 $540,000 $81,000
Nov1,600 16,000 14,400$1,080,000 $162,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
1 2 3 4 5 6
RevenuebyMonth
Key Metrics
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
LTV = 5x CAC
More ofthese
Less ofthese
Nice touch, but unsubstantiated
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Team
JonDoh(Founder/CEO)Co-founder/CEO@ArtFinder(soldtoEbay).Prev.LinkedIn
TrishTaylor (Founder/VPEngineering)Co-founder/VPEng.@ArtFinder(soldtoEbay).Prev.Facebook
BenBrando (VPSales/Marketing)Prev.HubSpot
WillWachon (Advisor)Founder/CEO@SpeedyK(Mobile autodetailing franchise)
SueSmead(Advisor)SVPCorpDev@Ebay
MegMitchum(Advisor)CMO@HubSpot
TBH(Director,CustomerService)
Team 11
Nicetouch
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FundingFunding 12
Bootstrapped by founders thru MVP and first 6 months
Seeking $2M Series A• Target close by EOQ3• $600K committed
So we can• Reach $48M in sales• Scale/refine marketing/customer acquisition• Scale customer service (detailers)• Scale infrastructure
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
Length of runway ?
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SummarySummary 13
Copyright2015Gleamr.CreatedbyPitchDeckCoach.com
Big Opportunity: First mover in $36B US auto detail market
Strong Team: Deep market/technology/execution experience
Sustainable Technology Advantage: 2 patents pending
Significant Traction: 1,600 detailers, 16,000 users, $162K/mo
Seeking $2M Series to achieve $6M run rate
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The Business Model Canvas
Revenue Streams
Channels
Customer SegmentsValue PropositionsKey ActivitiesKey Partners
Key Resources
Cost Structure
Customer Relationships
Designed by: Date: Version:Designed for:
designed by: Strategyzer AGThe makers of Business Model Generation and Strategyzer
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
strategyzer.com
What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
is your business moreCost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)Value Driven (focused on value creation, premium value proposition)
sample characteristicsFixed Costs (salaries, rents, utilities)Variable costsEconomies of scaleEconomies of scope
Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?
channel phases1. Awareness
How do we raise awareness about our company’s products and services?2. Evaluation
How do we help customers evaluate our organization’s Value Proposition?3. Purchase
How do we allow customers to purchase specific products and services?4. Delivery
How do we deliver a Value Proposition to customers?5. After sales
How do we provide post-purchase customer support?
For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?Who are our most important customers?
Mass MarketNiche MarketSegmentedDiversifiedMulti-sided Platform
What type of relationship does each of our Customer Segments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?
examplesPersonal assistanceDedicated Personal AssistanceSelf-ServiceAutomated ServicesCommunitiesCo-creation
What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?
categories ProductionProblem SolvingPlatform/Network
What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?
types of resourcesPhysicalIntellectual (brand patents, copyrights, data)HumanFinancial
Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?
motivations for partnershipsOptimization and economy Reduction of risk and uncertaintyAcquisition of particular resources and activities
What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?
characteristicsNewnessPerformanceCustomization“Getting the Job Done”DesignBrand/StatusPriceCost ReductionRisk ReductionAccessibilityConvenience/Usability
typesAsset saleUsage feeSubscription FeesLending/Renting/LeasingLicensingBrokerage feesAdvertising
fixed pricingList PriceProduct feature dependentCustomer segment dependentVolume dependent
dynamic pricingNegotiation (bargaining)Yield ManagementReal-time-Market
Your Pitch Canvas
Team
Team
Customer Acquisition
Unit Economics
Problem
Revenue Model
Product
Funding
MarketSize
Solution
Funding
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Frank’s Pitch Pet Peeves
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Where are you on the Spectrum?
Accentuatingthe Positive
Stretchingthe TruthExaggerating
Lying &Obfuscating
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Lies Entrepreneurs TellWe’re signing a huge contract next week!
Our round is almost fully subscribed.
We’re in over 500 accounts already!
We’re increasing our top of funnel sales
leads by 10x.
Other investors aren’t asking for this information.
Other angels are already funding.We have 3 patents.
Our CTO is full time.
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“The key to success I know not, buttrying to please everyone, the key to failure is.”
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Useless animations
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Frank’s Pitch Pet Peevesu Off target pitchesu Ideasu Typos/poor grammar/jargon/wordinessu The “big windup”u “No competition”u 100% outsourced developmentu Business plans/Long documentsu Large attachmentsu Secrets & NDAsu Defensivenessu Unresponsivenessu Useless animationsu Slides like this!
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Questions?
entrepreneur@nyu.edu@nyuentrepreneur
entrepreneur.nyu.edu16 Washington Place