More Related Content Similar to Essentials of a Great Investor Pitch - Entrepreneurship 101 (20) More from MaRS Discovery District (18) Essentials of a Great Investor Pitch - Entrepreneurship 1012. May 2, 2012!
Presented By:!
Peter Evans !
Entrepreneur-In-Residence, MaRS!
Founder & CEO, Speakerfile!
@techmarketer!
@speakerfile!
Pg 2!
© 2012 Peter Evans, MaRS Discovery Distric
3. Vision | Talent | Money
Other
People’s
Money
Fundamentally Changes Everything!
Pg 3!
© 2012 Peter Evans, MaRS Discovery Distric
4. The Investment Paradox!
Entrepreneurs & Investors Take Different Approaches!
Entrepreneurs! Investor!
Getting to! Getting to!
! !
YES! NO!
Pg 4!
© 2012 Peter Evans, MaRS Discovery Distric
5. Finding the Right Match!
Matching the Venture to the Investor!
Capacity! Team!
Has funds ! Skills & "
to invest! Track Record!
Compatible! Platform!
Successful! Match of ! Market!
Track ! Significant "
Size/Stage/! Sizable and "
Record! Technological"
Geography! Addressable!
Advantage!
The Right! The Right!
Investor! Investment!
Friendly! Traction!
No directly! Strategic! Early " IP &!
competitive! Relevant! Customers" Bus. Model !
investments! Portfolio! ! Entry Barriers!
Entrepreneurs want…! Investors want...!
Pg 5!
© 2012 Peter Evans, MaRS Discovery Distric
6. Getting to Yes: 3 Levels of Engagement!
Emotional! Rational! Financial!
Pg 6!
© 2012 Peter Evans, MaRS Discovery Distric
7. Engaging Investors on All 3 Levels!
!
Some tips for scoring on emotional, rational financial elements !
!
! Storify!
Create a well paced, logical narrative….think storyboard!
! Disnify!
Use visuals - frameworks, graphics and images…But only where they make
sense…you are not keynoting a TED talk!
! Personify!
Relate to the team’s personal experiences…investors are in the people business.!
! Simplify!
Avoid too much detail, overused buzzwords and jargon…getting a term sheet after
first meeting is not the goal !
! Verify!
Can you finish this sentence? “As evidenced by…” Show a sense of discipline in
measuring the right things from market research to key metrics for the business!
Pg 7!
© 2012 Peter Evans, MaRS Discovery Distric
8. Components of the Investor Pitch!
#1! #3!
Real! Unique!
Problem! Advantage!
#2! #4!
Attractive Compelling
Market! Investment!
Pg 8!
© 2012 Peter Evans, MaRS Discovery Distric
9. Pacing the Pitch!
Selling your story in 12 minutes!
#1! #2! #3! #4!
Real! Attractive Unique! Compelling
Problem! Market! Advantage! Investment!
Start! End!
(3 min)! (4 min)!
(4 min)! (3 min)! (2 min)!
!"#$%&'"()*+,&-"./&,"*0&"123-&)34&,"$4)5""" Pg 9!
© 2012 Peter Evans, MaRS Discovery Distric
10. Answering the “So What?”!
Focusing a Problem that Matters!
1!
Real!
Problem!
Pg 10!
© 2012 Peter Evans, MaRS Discovery Distric
11. Creating Impact!
The Company & It’s Solution – Elevator Style!
Introduction" ! Core Value Proposition: Use a single sentence:!
! Unique Benefit: Focus on one single aspect of
what you do (aka…”the big idea”)!
! Metaphors: Provide a cognitive connection (the
movie pitch) i.e. ”we’re the x of the y business.” !
Start! Real Problem! Min 3!
! Emotion: Create a visceral response (why are
things still done this way?) Be provocative….Nice
to have’s aren’t investable!
Key Message: We’re fixing the insanity of the status quo!
Pg 11!
© 2012 Peter Evans, MaRS Discovery Distric
12. Defining the Problem!
Paint a picture of who has this pain!
Introduction" ! Current State: Show the insanity of how
customers address the issue today!
! Historical Evolution: What’s changed in the
customer’s mindset !
! Personas: Describe the main players in your
Start! Real Problem! Min 3!
market you address!
! Pictures: Every picture tells a story!
Problem"
Key Message: We’re solving real pain…not “nice to haves”!
Pg 12!
© 2012 Peter Evans, MaRS Discovery Distric
13. Your Solution to the Rescue!
Describe WHAT you do and HOW you do it!
Introduction" ! Product: What is it? "
(screen shots, product photos)!
Solution"
! Functionality: The Who + Do!
! Benefits: High level value!
Start! Real Problem! Min 3! ! Category: Where do you play?!
! Stage: What is the readiness of the solution? !
Problem" !
Key Message: Our solution is novel and easy to understand!
Pg 13!
© 2012 Peter Evans, MaRS Discovery Distric
14. What’s Been Achieved to Date?!
Show your ability to succeed: On lots of sweat…little $!
Introduction" ! Founded (Year)!
! Employees (FT/PT) Offices!
Solution"
! Product Release(s)!
! Beta Users/Unique Views/ Registrations!
Start! Real Problem! Min 3!
! Paying Customers!
! Partners (Technology/Channel)!
! Certifications/Industry Awards!
Problem" ! Media Coverage!
! Patents!
Traction"
Key Message: Our team is committed and can execute!
Pg 14!
© 2012 Peter Evans, MaRS Discovery Distric
15. Case Study: Quantum Dental!
Changing the Way Dentists Detect & Treat Tooth Decay
Investor Presentation: October 20th, 2010
MaRS Angel Breakfast
Quantum Dental Technologies Lisa Crossley, CEO
Pg 15!
© 2012 Peter Evans, MaRS Discovery Distric
16. Case Study: Quantum Dental!
Existing Tooth Decay Diagnostics
Gold standard detection methods (visual & x-ray)
fundamentally unchanged for decades. Tooth Decay Detected
Pg 16!
© 2012 Peter Evans, MaRS Discovery Distric
17. Case Study: Quantum Dental!
The Canary Console
by Quantum Dental Technologies
Canary interactive software and
printed patient reports
Pg 17!
© 2012 Peter Evans, MaRS Discovery Distric
18. Case Study: Quantum Dental!
Company Overview
What we do
! Quantum Dental Technologies has developed a new platform which uses a low-
powered laser to detect tooth decay earlier and more accurately than conventional
technologies, allowing dentists to treat & heal the teeth instead of “drill, fill & bill”.
Milestones
! Product - Dental Clinic model designed, first commercial units manufactured
! Customers - Over 50 pre-orders secured
! IP - Strong patent portfolio
! Clinical - First Health-Canada approved clinical trial completed, second trial in
progress, providing independent validation of safety & efficacy
! Partnerships – Relationships with key global distributors and major multinational
strategic partners
Financing
! $3.3M raised to date, seeking an additional $2.5M to reach breakeven
! Funds: Sales/marketing to support launch; large-scale mfg; final reg. approvals
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© 2012 Peter Evans, MaRS Discovery Distric
19. Case Study: Quantum Dental!
Market Problem
Dentists’ Concerns Limitations of Current Patients’ Concerns
Detection Methods
! Need to increase ! High false positives / ! Discomfort during
revenues, leverage false negatives x-rays
office staff to reduce ! Can’t detect early ! X-ray exposure
costs tooth decay ! Painful and costly
! Need to attract new ! Can’t detect decay on restorations
patients all tooth surfaces ! Weakened tooth
! Need new ! Interference from structure
diagnostic tools that orthodontics
provide more
accurate detection
of tooth decay
Pg 19!
© 2012 Peter Evans, MaRS Discovery Distric
20. Case Study: Quantum Dental!
Value Proposition
Value to the Dentist
! Attract new patients: with state of the art
technology and a minimally invasive
approach
! More patient visits: more frequent visits
for patients enrolled in remineralization
programs
! Reduce costs: scans can be performed
by other staff (hygienists, assistants)
! Affordable: flexible leasing options
provide immediate profitability
Value to Patients & Insurers
! Reduce costly & painful restorations
Pg 20!
© 2012 Peter Evans, MaRS Discovery Distric
21. Case Study: Quantum Dental!
What it is – Canary Console
! Show product with call outs
Laser & Intra-oral Camera
Console
Eye Shield
Handpiece
CA Patent # 2314691
US Patent # 6584341
Pg 21!
© 2012 Peter Evans, MaRS Discovery Distric
22. Case Study: Quantum Dental!
What it is - Screenshot
Odontogram
Menu
Options
Camera
Image
Canary Number
Pg 22!
© 2012 Peter Evans, MaRS Discovery Distric
23. Case Study: Quantum Dental!
The Life Cycle of Tooth Decay
Healthy Early Advanced
Tooth Enamel Decay Enamel Decay
Demineralization
Remineralization
Remineralization Therapies The Canary System Scan X-Ray, Drill Fill & BIll
Pg 23!
© 2012 Peter Evans, MaRS Discovery Distric
24. Opportunity Awaits!
Lots of Room in the Market to Scale a Business!
2!
Attractive
Market!
Pg 24!
© 2012 Peter Evans, MaRS Discovery Distric
25. Sizeable Market Opportunity!
It’s Very Big …And you Can Get To It!
! Size: What’s being spent today on problem? Build
from ground up. Can the market support multiple
Market Size"
players?!
! Addressability: What’s the reasonable market you
can serve? !
! Trends: Focus on Formative Forces (PESTLEC) –Is the
problem getting worse or growing over time?!
Min 3! Attractive Market! Min 7!
! Charts: Keep it visual and engaging!
! Segments: Going Niche or broad?!
! Global: Identify other markets!
! Proof: Use 3rd Party reports!
! Thought Leadership: Are you using primary research
to gain insight?!
Key Message: We have unique insight into the market!
Pg 25!
© 2012 Peter Evans, MaRS Discovery Distric
26. Early Customers/Prospects!
Nothing really matters till somebody buys/downloads something!
Market Size" ! Status: Closed vs. Prospects and "
Paid vs. Free Trial !
! Categorize: Key segments etc.!
! Contextualize: Why they bought!
! Personas: Describe customer characteristics!
Min 3! Attractive Market! Min 7!
! Logos: Categorize …Avoid “logo soup”!
! Evangelists: Customer quotes to validate
Customers" market pain and size !
!
Key Message: We have buyers who must have our solution !
Pg 26!
© 2012 Peter Evans, MaRS Discovery Distric
27. Making Money!
Where does the growth and profit come from?!
Market Size" ! Key Metrics: Pricing, Avg. Deal Size,
Registrations/Subs., Churn, LTV etc. Note:
Revenue Model" Cost to Acquire is perhaps the most
overlooked and important metric!
! Channels: What are the downstream costs to
sell and service the customer (is this built in?)!
Min 3! Attractive Market! Min 7!
! Competition: Is your model sustainable if
competitors start stealing share? Have you
factored in potential of downward price
pressure over time? !
Customers"
Key Message: We’ve validated our revenue model and can !
demonstrate how it will allow us to scale the business !
Pg 27!
© 2012 Peter Evans, MaRS Discovery Distric
28. Acquiring Customers!
The most visible proof there’s a market for your solution !
! Visibility: Critical to success.. "
what’s your unique story?!
Market Size"
! Lead Generation Programs: What marketing
Revenue Model" approaches will you use (stay high level – categorize)!
! Sales Model: Direct vs. Channel (Do you have
partners? Have you built a wave for channels to
ride?) !
Min 3! Attractive Market! Min 7!
! Systems: Do you have an infrastructure to scale
(CRM/Inbound Mktg. Platforms etc.)!
! Testing: Do you have capability to test value prop./
Customers"
offers?!
! Stages: Do you have the ability to pivot from launch
Marketing & Sales" to growth to maturity?!
Key Message: We have programs, systems and talent to !
drive visibility, lead gen. and close deals!
Pg 28!
© 2012 Peter Evans, MaRS Discovery Distric
29. Case Study: Wave Accounting!
Changing the business of small business accounting.
November 9th, 2010!
Kirk Simpson, President & CEO
MaRS Angel Breakfast"
Pg 29!
© 2012 Peter Evans, MaRS Discovery Distric
30. Case Study: Wave Accounting!
The Market Opportunity
Wave is at the forefront of some powerful trends:
1. The explosion in SaaS
• primary driver is accessibility anywhere
• collaboration Free Agent
• auto-backup
Nation
2. Paper to digital
• lose the shoebox by bringing in digital 28.5 million
copies of the transaction in North America!
3. Wireless
• turn downtime into productive time Strong desire to be organized,
• increase automation lack competency in this area
but looking for control.
4. Collaborative Consumption
• show me what my peers are spending so I
can make better decisions
Confidential – Wave Accounting Inc., 2010 2
Pg 30!
© 2012 Peter Evans, MaRS Discovery Distric
31. Case Study: Wave Accounting!
Recent Successes
! 1.8 million users in 2 years – ! 2 million + users
4.2 million after 4 years ! Monthly fee for use
! Sold for $170 million (17
times rev or $140 per user) to
Intuit in 2009
Confidential – Wave Accounting Inc., 2010 3
Pg 31!
© 2012 Peter Evans, MaRS Discovery Distric
32. Case Study: Wave Accounting!
Revenue Model
Targeted Offers & Research
! Wave will embed targeted offers
within the app based on users’ data
(never against personally
identifiable information) – Telus now
a customer
! Selling aggregated research about
what’s happening in this key market
Confidential – Wave Accounting Inc., 2010 4
Pg 32!
© 2012 Peter Evans, MaRS Discovery Distric
33. Case Study: Wave Accounting!
Revenue Model
Premium Products Tax Returns
Web-based tax preparation (for a fee)
Additional modules available for a fee
(built by Wave or through 3rd party integrations)
! Payroll (in discussions with several U.S.
and Canadian providers)
! CRM
! Receipt entry (shoeboxed)
! Email learning
Confidential – Wave Accounting Inc., 2010 5
Pg 33!
© 2012 Peter Evans, MaRS Discovery Distric
34. Case Study: Wave Accounting!
Go to Market Strategy
CAPTURE RETAIN
! PR – already featured in the ! Integration Stickiness
Financial Post and Profit Auto-syncing banking data
Magazine. U.S. PR through every night
November Hoffman.
! Communication:
! Social media and blog to drive Informative, insightful weekly
16
SEO emails
! Partnerships, i.e. Freshbooks, ! Offers: Value-added,
banks, accounting firms contextual, time sensitive
offers
LAUNCH ! Vertical Communities: Custom
chart of accounts for 40+ ! Collaboration tools with
industries internal and external
advisors (i.e., accountant)
! Advertising: Google Adwords,
Facebook Ads, LinkedIn DirectAds ! Focus on customer service
Confidential – Wave Accounting Inc., 2010 6
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© 2012 Peter Evans, MaRS Discovery Distric
35. You are in the Best Position to Win!
Many of the essential pieces are in place !
#3!
Unique!
Advantage!
Pg 35!
© 2012 Peter Evans, MaRS Discovery Distric
36. Partners!
Show how you can punch above your weight !
! Role: What value will they add to your solution
Research/Development/Sales/Support etc.!
Partners"
! Reputation: Do you you have the right players in
the market you are serving? !
! Category Fit: Do they have sufficient market
power?!
Min 8! Unique Advantage! Min 10! ! Executive Sponsorship: Do you have buy in from
key people inside the channel? !
! Incentives: Is the partner aligned financially to
support you?!
! Longer Term: Is there competitive threat or
potential M&A?!
Key Message: Important market players buy into our !
vision and want to work with us!
Pg 36!
© 2012 Peter Evans, MaRS Discovery Distric
37. Technology/IP!
Creating barriers to entry!
! Technology: Validate how you are different?
Partners" How much market lead do you have? What
degree of leverage and scale do they create?!
! Process: Are there unique process elements of
how your technology works?!
! Licenses: Are there 3rd party components of
your solution that are licensed? Do you have an
Min 8! Unique Advantage! Min 10!
exclusive right to the technology? !
! Patents: What is the focus of the patent and
what stage are you at? (provisional filing, patent
Technology/IP" granted) – Not a bad idea to mention any name
brand attorneys you work with.!
!
Key Message: We’ve nailed a problem that is hard to solve. !
It will be hard for competitors to catch up!
Pg 37!
© 2012 Peter Evans, MaRS Discovery Distric
38. Team & Advisors!
The capabilities to execute on the plan!
! Company Background: List experience in terms
Partners" of key companies each team member worked for.
List “pedigrees” (notable exits).!
Team & Advisors" ! Planned Hires: Speak briefly to what primary role
they will play in the venture!
! Achievement: Focus on a key aspect of their
Min 8! Unique Advantage! Min 10! experience that uniquely qualifies them for the
venture!
! New Hires: Where applicable, speak to any key
Technology/IP" people you may be hiring to build out the team!
Key Message: We have assembled the right mix of people who
understand our target customers and the dynamics of the marketplace.
We have “know how” and “know who.”!
Pg 38!
© 2012 Peter Evans, MaRS Discovery Distric
39. Case Study: Verold!
Automating 3D!
Jad Yaghi!
Co-Founder and CEO!
Jad.yaghi@verold.com!
Pg 39!
© 2012 Peter Evans, MaRS Discovery Distric
40. Case Study: Verold!
Competitors!
Manual Tools ! Automated! Other Scanners!
Rapid Asset Creation! !! !!
No Special Hardware! !! !! !!
Ready to Animate ! !! !!
Any Size Object! !! !! !!
Full Automation! !! !!
Simple to Use! !!
#$%&'"6%7&0"83,2*),",297"*,":;:<,"9*4"*),$"=&"2,&-"7&0&"" Pg 40!
© 2012 Peter Evans, MaRS Discovery Distric
41. Case Study: Verold!
IP Portfolio!
• R&D conducted top German University (Computer Graphics Lab!
• Concepts, high level methods by our CTO, Matthew Sloly!
• Key Patents:!
IP Developed by Verold! Licensed IP!
Work-flow for automated creation of Automatic retargeting of 3D meshes!
animation-ready 3D models!
Animation content transfer!
Multi-user real-time 3D model
Automated Rigging!
reconstruction!
3D City reconstruction from images!
Pg 41!
© 2012 Peter Evans, MaRS Discovery Distric
42. Case Study: Verold!
Team/Advisors!
Name! Position! Background!
Matthew Sloly! Co-Founder & • Internationally recognized digital artist with work in the
CTO! collection of the National Gallery of Canada!
• Co-Invented majority of the IP being commercialized!
Jad Yaghi! Co-Founder & • Serial entrepreneur with over eight years management
CEO! experience in startup environments!
• Previously Strategy Consultant with Monitor!
Oliver Schiffers! CMO! • Founded two online and VR companies 1996 and 1998!
• 10 years experience, Senior Consultant and Head of
Marketing Strategy in ICT, Sapient!
Alexander Oganov! Business • Angel InvestorSuccessfully invested in 32 early stage
Development! companies!
Nils Martins! 3D Engine • Virtual Reality Center, Aachen!
Developer! • 4 years geometry processing and game engine
development!
Dr. Leif Kobbelt! Chief Computer • Computer scientist at RWTH Aachen!
Scientist! • Geometry Processing!
Advisory Board!
Chris Cole (Co-founder of Mathematica, ActiveWorlds, consultant Disney Imagineering) ! !!
Robert Quance (entrepreneur in Residence, MaRS)!
Georgy Oganov (Chief strategist at Gaz-Prom, former Russian ambassador)!
Pg 42!
© 2012 Peter Evans, MaRS Discovery Distric
43. There is Upside for Investors!
Presenting the Offer for Investment!
#4!
Compelling!
Investment!
Pg 43!
© 2012 Peter Evans, MaRS Discovery Distric
44. How You Will Make Money!
Key Metrics that Explain the Bottom Line for Investors!
!
Financials" ! Key Numbers: Revenues, Expenses, EBITDA,
Customers, Headcount !
! Burn Rate: What is the net cash out month!
! Assumptions: Be prepared to defend them !
Min 10! Compelling Investment! End! ! Scenarios: Be able to speak to impact of
various scenarios (i.e. Cost of Acquisition is x
% higher than forecast or lack of conversion
from free to premium)!
Key Message: Our venture clearly offers a superior return for our
investors.!
Pg 44!
© 2012 Peter Evans, MaRS Discovery Distric
45. The Ask!
Value & Deal Structure/Terms & Use of Funds!
! Investment Structure/Terms: Type of Instrument
(Convertible Debt, Equity) and what are the terms
Financials" of the deal !
! Amount: What’s been raised and what is left in the
round? Use of Proceeds: What milestones will
you achieve (with the investors money)!
! Runway: What amount of time does the current
money buy (can you hit breakeven or is a new
Min 10! Compelling Investment! End! round required?) !
! Pipeline: Be prepared to speak to who is
committed so far and who are you approaching.
You must show momentum – “herd dynamics.”!
Offer Details"
! Valuation: Be careful about “premature”
discussions regarding pre-money value – don’t
price from the podium! !
Key Message: Our structure and terms should meet your investment criteria!
Pg 45!
© 2012 Peter Evans, MaRS Discovery Distric
46. Financial Projections!
2011 2012 2013 2014 2015
Number of Licenses # # # # #
Revenue $______ $______ $_______ $_______ $_______
Expenses $______ $______ $_______ $_______ $_______
Gross Margin % % % % %
EBITDA $_______ $_______ $_______ $_______ $_______
Total Head Count # # # # #
Pg 46!
© 2012 Peter Evans, MaRS Discovery Distric
47. Financing & Use of Funds!
! Investment to Date: $_______!
– $______ support from government programs/grants (if applicable) !
– $______ cash investment from founders and angels!
! Current Raise: $________!
! Use of Funds (See Examples Below)!
– Build Marketing programs!
– Hire US and European sales team!
– Commercial launch of V1.0 product in North America and Europe!
– Secure final regulatory approvals!
– Finalize Patents!
– Initiate large scale manufacturing!
! Further Fundraising (Speak to Runway – See Example Below)!
– Planned A Round Financing (Jan. 2013) … or….!
– Expect to achieve cashflow positive with the proceeds of this raise !
!
Pg 47!
© 2012 Peter Evans, MaRS Discovery Distric
48. A Recap: The 4 Components of the Pitch!
#1! #3!
Real! Unique!
Problem! Advantage!
#2! #4!
Attractive Compelling
Market! Investment!
Pg 48!
© 2012 Peter Evans, MaRS Discovery Distric
49. In the End…The Investment is in You!
11 signals smart investors look for!
!
1. Honesty…….........................Gives straight answers to investor questions!
2. Credibility…..........................Demonstrates customer insight/thought leadership!
3. Resourcefulness……………!Can make an investor’s dollar go far!
4. Logic …………….……………Makes wise, pragmatic decisions quickly!
5. Drive…………………………..Genuine passion for early stage & ability to excite!
6. Humility……………………….Coachable and seeks help to address weak spots!
7. Leadership……………………Has the ability to attract and lead a winning team!
8. Critical Thinking……………..Challenges assumptions and spots the false +’s!
9. Commitment……………........Not just involved - sweat &/or capital invested!
10. Patience……………...............Tolerance to the ambiguity of innovation !
11. Agility……………...................Decisive…Cuts losses & pivots at the right time !
Pg 49!
© 2012 Peter Evans, MaRS Discovery Distric