1 how to successfully present to investors larry chaityn keiretsu forum [email protected]...

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“How to Successfully Present to Investors”

Larry ChaitynKeiretsu [email protected]@kaminski-

partners.com

mailto:[email protected]

Background

E&Y, Cap Gemini, Oracle Keiretsu Forum

Worlds Largest Angel Investment Group 24 Chapters, 900+ Investors

Kaminski-Partners Merchant Bank (IB + Fund) Dan Kaminski, Harvey Krueger, Carl

Page, Yechiam Yemini Life Sciences – Technology – Clean Tech

Barclays 2

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“The product matters far less to most investors than reactions of customers, the properties of the market, and the credibility of the team. Obsess about the product on your own time; present your business in all it’s parts” Marc Hedlund, Founder Wesabe

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Sequence & Flow

• Do a Demo 1st• Then Tell a Story

• We have a focused mission• We have a proven team to take us there• We have uncovered a large problem• We have solved the problem using this product

with great technology inside• We are going to market & sell it to these

specific customers• With these advantages over the competition• We are working toward these milestones over

the next few quarters• In conclusion, this financing is a great

investment opportunity.

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Your Company Your Company NameName

LogoLogoTaglineTagline

Raising $XRaising $XCopyright 2011 Keiretsu Forum NY

SUMMARYSUMMARY

WHAT WE DO(Use an analogy that people

understand)

“Fitness as a social game”

Copyright 2011 Keiretsu Forum NY

TEAMTEAM• Highlight past accomplishments of the Highlight past accomplishments of the

team (and advisors).team (and advisors).• Why this is a world-class team with Why this is a world-class team with

relevant skills to pull this off? relevant skills to pull this off? • Why they can recruit from their Why they can recruit from their

networks? networks? • What have they done before that is What have they done before that is

special and relevant? special and relevant? • Have they done it before or are they Have they done it before or are they

learning on the job?learning on the job?


PROBLEM WE ARE PROBLEM WE ARE SOLVINGSOLVING

• Who is the customer? do they matter? Who is the customer? do they matter? what problem does the customer have what problem does the customer have today? why is that a big problem, why is it today? why is that a big problem, why is it their biggest problem? their biggest problem?

• Emphasize the pain level and the inability of competitors to satisfy the need.


THE SOLUTIONTHE SOLUTION

• What is your solution? why is it What is your solution? why is it unique? why has nobody done this unique? why has nobody done this before?before?

• What has changed that allows room What has changed that allows room for a startup here?for a startup here?

• Include a demo such as a screencast, a link to working software, or picturessoftware, or pictures


TECHNOLOGYTECHNOLOGY

• What is the technology behind the What is the technology behind the solution? How does the technology solution? How does the technology enable the solution to be enable the solution to be differentiated? Patent status.differentiated? Patent status.

• If big IP piece, one slide on the state If big IP piece, one slide on the state of technology developmentof technology development


MARKETINGMARKETING• Your total addressable market. In Your total addressable market. In

other words, what your revenue other words, what your revenue would be if you got 100% of your would be if you got 100% of your target customers paying what you target customers paying what you expect?expect?

• Is this market big enough to yield a Is this market big enough to yield a highly-valued company. highly-valued company.

• How will you acquire them? How How will you acquire them? How many have you acquired already?many have you acquired already?


MARKETING;MARKETING;Go to Market StrategyGo to Market Strategy

• How will you get in front of the How will you get in front of the customer? Direct, Indirect, customer? Direct, Indirect, Distribution, etc.Distribution, etc.

• Integrated Social Networking & Integrated Social Networking & Mobile Strategy.Mobile Strategy.

• Is there a channel that can allow Is there a channel that can allow this company to get their product to this company to get their product to customers profitably? Anyone in the customers profitably? Anyone in the way of this startup reaching their way of this startup reaching their customers?customers? Copyright 2011 Keiretsu Forum NY

SALESSALES

• What they will pay? What they will pay? • What will it costs to service them? What will it costs to service them? • What will it cost to acquire them?What will it cost to acquire them?


2009

2011

2012

2013

2010

(K)


ADOPTION CURVE ADOPTION CURVE (Projected)(Projected)Registered User Adoption Curve: Launch – 2013Registered User Adoption Curve: Launch – 2013

COMPETITIONCOMPETITION

• Matrix of the competition with the Matrix of the competition with the two variables that matter on the X two variables that matter on the X and Yand Y

• How is the company positioned in How is the company positioned in the landscape with all the other the landscape with all the other companies I've seen? How are companies I've seen? How are companies in this category valued? companies in this category valued? Do I know about competitors that Do I know about competitors that these guys don't have listed?these guys don't have listed?


COMPETITION COMPETITION SPECIFICSSPECIFICS

• The top 2 or 3 competitors, one/two The top 2 or 3 competitors, one/two liner on their story (funding, etc), liner on their story (funding, etc), one/two liner on why you beat them.one/two liner on why you beat them.

• Do I believe these guys can win? Do I believe these guys can win? Who are the two or three Who are the two or three competitors to focus due diligence competitors to focus due diligence efforts on?efforts on?


MILESTONESMILESTONES

• Each round of financing targeted at Each round of financing targeted at meeting certain milestones to increase meeting certain milestones to increase the value of the company.the value of the company.• Current status & prospective milestones for Current status & prospective milestones for

the next 1-3 quarters for; product, team, the next 1-3 quarters for; product, team, marketing, sales.marketing, sales.

• What hypothesis did you test in the last round What hypothesis did you test in the last round of financing and what were the results? What of financing and what were the results? What hypotheses will you test with this round?hypotheses will you test with this round?

• What happens when? beta, first customer What happens when? beta, first customer shipment, break-even cash flow, etc.shipment, break-even cash flow, etc.


FINANCINGFINANCING• How much went in so far, when, at what How much went in so far, when, at what

price? price? • How much are you raising now and How much are you raising now and at at

what valuationwhat valuation, how big is the , how big is the unallocated pool?unallocated pool?

Cap Table: Who are current investors, Cap Table: Who are current investors, how much do they own, who is on the how much do they own, who is on the board, board,


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Use of Funds

• Sales• List the team & $

• Marketing• Specific marketing initiatives• Expectation per initiative: Adoption• Expectation per initiative: Revenue

• Etc


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CONCLUSIONS

• What the company could accomplish if these current plans are realized

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Appendix

• Comparables• Valuation Mechanics

COMPARABLESCOMPARABLES

• Companies in and around the space, Companies in and around the space, valuations, revenues, gross marginvaluations, revenues, gross margin

• Will this be a valuable company if Will this be a valuable company if they execute?they execute?

• Ideal: There are obvious big, well-Ideal: There are obvious big, well-valued companies around who would valued companies around who would try to buy the company. All valued try to buy the company. All valued at very high multiples, but an at very high multiples, but an underserved segment that allows a underserved segment that allows a startup to build a valuable companystartup to build a valuable companyCopyright 2011 Keiretsu Forum NY

Valuation Mechanics

Startup valuation is part art and part science; and,

Your company is worth is what the market will pay for it. Based on industry success metrics

Platforms 100,000 registered users = some traction

1Million registered users = industry interest

23Copyright 2011 Keiretsu Forum NY

Valuation Mechanics

DCF Little to no cash flow history

Cost to Replicate doesn’t fully capture the future potential doesn't reflect the value of intangibles

like the brand Market Multiple

looking at recent sales or offerings of comparable companies

very difficult to find accurate data Copyright 2011 Keiretsu Forum NY

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Valuation Mechanics“Stage of Development”

Stage Investors Valuation

Concept/Business Plan

Friends/Family $250K-$1M

Technology Developed

Angels/Seed VCs

$1M -$5M

Launch/Early Customer Traction

Seed VCs, Series A VCs

$5M - $15M

Scaling & Adoption (Negative EBITDA)

Series A, B or C VCs

$15-$30M+

Rapid Expansion (Positive EBITDA)

Exit (M&A) or IPO

$40+M 25

1 how to successfully present to investors larry chaityn keiretsu forum [email protected]...

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