Handout are you investor pitch ready

7/8/2015
1
Investor Ready?
Pitch Perfect?
Naeem Zafar
Professor of the Practice, Brown University, UC
Berkeley
@naeem
nzafar@Berkeley.edu
Agenda
• Being “investor-ready”
• Pitching to investors
• Negotiating with investors/VCs
Entrepreneurship All rights reserved © Naeem Zafar 2

7/8/2015
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Personal Background
• Faculty member at Univ of California Berkeley, Center of
Entrepreneurship & Technology & Brown University
• C0-founder & CEO of BitzerMobile.com  Acquired by Oracle
• Founder Startup-Advisor.com – advisory to entrepreneurs
• Experience at one large multinational & 6 startups
• One IPO (Initial Public Offering)
• Current founder/CEO of TeleSense.net
• Raised over $70M in multiple ways (VC, asset sale, debt, angel)
• Traveled to 76 countries, lived in 3
• Brown University Electrical engineering, Univ of Minnesota
• Lectured in Brazil, China, Japan, Algeria, France, UK, India,
Pakistan, Turkey, Colombia, Singapore, Netherland …
• Advised or mentored over 1,000 entrepreneurs
All rights reserved © Naeem Zafar
3Startup Workshop
www.startup-advisor.com
All rights reserved © Naeem Zafar
4
www.FiveMountainPress.com

7/8/2015
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Personal History
6/3/2012 © Naeem Zafar 5
First Internship
• Honey Research facility in
Minneapolis MN
• Learning professional
environment
• Created system to test
chips

7/8/2015
4
Starting First Company
• XCAT founded in 1985 by 4 engineers
• VP of engineering
• Designed a simulation accelerator in total
stealth mode
• No market/customer discovery  no success!
• Sold company for a song after 3 years
Hardware Emulation
• New industry created
• 400 people, $150M sales

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5
Fingerprint Sensor Company
Investor Ready
• Have idea
• Initial team
• Market research with users & customers
• Financial model
• A pitch!

7/8/2015
6
Building a Financial Model
• Helps you estimate how much to raise
• Allows to react to new data with what-if
analysis
• No VC will fund you without it
• You can create one in ½ a day!
12
Why Do Financial Modeling?
• To answer the most important & fundamental question:
Does this make sense?
• You need to know more than anyone
• Tweak basic assumptions until it does!
ENGN 101 S03 All rights reserved © Naeem Zafar

7/8/2015
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Building a Financial Model
• Financial model is clarity about your business
• It is built from common sense
– Sources of revenue
– Sources of expenses
– Net income
ENGN 101 S03 All rights reserved © Naeem Zafar 13
The Art of
Presentation
14Entrepreneurship All rights reserved © Naeem Zafar

7/8/2015
8
Listen to a TED Talk
• Ted talk:
http://www.ted.com/talks/david_s_rose_on_
pitching_to_vcs?language=en#t-3838
You Are The Message!
• It is not about PowerPoint
• You are the message
• Use aids as needed
• Have your message ready & crisp

7/8/2015
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Pitching
• Explain yourself in first minute (slide zero™)
– Explain the relevance of what you do
– Tell a story
– What should I listen to you
– Why are you here?
• Answering questions
• Jumping around slides – don’t!
Pitching
• People listen to 7% of words that you say
• They listen to 52% of your body language
• Connect with your audience
– Make it relevant to them
– Be clear (first in your own head)
–Pause & let the message sink in!
All rights reserved © Naeem Zafar 18Entrepreneurship

7/8/2015
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You & Your Passion
• Be attentive, energetic, in front!
• Know your message!
– Do not read your own slides
• Engage with your audience
• Your most magical tool: “the pause”
Say It With Conviction!

7/8/2015
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10/20/30 Rule
• Ten slides
• Twenty minutes
• Thirty size font
• You want to communicate “enough”, not
everything!
• Purpose of the pitch to stimulate interest, not
to close the deal
What do VC hear?
• What you pitch
– Unmet need
– Market size
– Solution
– …….
– Team
– …….
– Financial assumptions
– Financial projections
25
• What they hear
– Is there money to be
made?
– Are these the people
who will make me
money?
– How much money can
we make?
Entrepreneurship All rights reserved © Naeem Zafar

7/8/2015
12
Company Name
Name Title & Contact info
Tag Line
Investor Pitch
Audience can read the info but this is where you
explain what you guys do: This is what I call Slide Zero
1: Team
• Who are you?
– Make yourself relevant
– Include advisors, consultants if they make you
look larger & impressive
• OK to show up with a less than perfect team
– All teams have holes
– Important issue is that you know that there are holes that
you are willing to fill

7/8/2015
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2: Unmet Need
• What pain are you alleviating
– Get everyone nodding their head in agreement
• Describe a problem people connect with
– Tell us how you validated your assumptions
• Customer examples, use actual names from
market research
• Use-case is good way to explain problem
3: Target Market & Segmentation
• What is your target market
• Which sliver will you own
first & why
• Market size
• Market dynamics
– Regulation, new technology,
new players

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14
4: Solution
• How you alleviate this pain
• Make sure that audience clearly understand
– What you sell
– What is the value proposition
– Not a place for in-depth technical description – just a
gist of “how”
• Avoid text but use diagrams, schematics, mockup,
demo here
5: Market Dynamics & Competition
• Complete view of competitive landscape
– What alternatives people have today
• Never dismiss your competition
– Investors, customers, employees all want to know why
you are better, not why competition is bad
• Never say that you have no competition

7/8/2015
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6: Unfair Advantage
• Why now? why us?
• Technology, secret sauce or magic behind
product
• Special alliances, relationship that makes it
possible to for you to do this, now
Positioning
• How are you different from incumbants
• Using familiar players to help position yourself

7/8/2015
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7: Business Model
• How you make money
– who pays you
– what channels
– what gross margins
• What do you sell?
– Subscription
– Widgets
– Affiliate fees?
8: Go-to-Market & Sales Strategy
• How will you reach your first 10
customers
• Marketing leverage points
• What alliances needed or in place
• Convince audience that you have
an effective go-to-market strategy

7/8/2015
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9: Financial Projection & Key Metrics
• What are key metrics & assumptions
– customers, installations, licenses etc.
• 5-year financial projection take into account
extended sales cycle
– Show the spreadsheet please
• Your “ask”
10: Status & Timeline
• Current status
– Accomplishments to date (last ~6 months)
– Timeline (major milestones over next ~18
months)
– how the money will be used
• Can be used to show key metrics
– Employee growth
– Customer or geographies growth
– Profit point etc.

7/8/2015
18
Q2-’16Q4-’15 Q1-’16 2H-’171H-’17 1H’18
Z-Timeline
betas
e.g. 10
referenceable
accounts
Or
Reach profitability
etc.
Alpha customer
acquisition
Series B $7M
Start
company
e.g. 1st
Prototype
Milestone #5
2H’18
Series A $4M
Milestone
#3
Milestone
#2
Milestone
#4
e.g. 1st
alliance
signed
Seed $100K
Q3-’16 Q4-’16
Product
development
Prod Launch
Employee count 4 6 11 18 22 29 39 54

Handout are you investor pitch ready

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Handout are you investor pitch ready