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Marketing to Investors

A Calyx Group ThinkTool

10 Mistakes to Avoid in Seeking Funding

10 FUNDING STATISTICS

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1. 77% of small businesses rely on personal savings for their initial funds.

2. A third of small businesses start with less than $5,000.

3. The average small business requires about $10,000 of startup capital.

4. Only 0.91 percent of startups are funded by angel investors

5. Only 0.05% of startups raise venture capital.

6. 38 percent receive funding from family and friends.

• The average seed round is $40 million.

1. The median company running a seed funding round is 3 years old.

2. Of startups that raised seed rounds, 1% reached unicorn status of $1B+

valuation.

3. Startups with two co-founders rather than one raise 30% more capital.

https://www.fundera.com/resources/startup-funding-statistics

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Mistake #1:

Assuming This is About You

THE INVESTOR HAS A VERY DIFFERENT

PERSPECTIVE!

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THE INVESTOR’S PERSPECTIVE

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Mistake #2:

Talking to the Wrong People

NO TWO INVESTORS ARE THE SAME

IS YOUR BUSINESS A FIT FOR THE ONES

YOU’RE TALKING TO?

FOR WHOM ARE YOU A FIT?

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Portfolio CompaniesEconomic Sector

Investment Stages Investment Thesis

MISTAKE #3:

PITCHING THE

PRODUCT TO GET

INVESTMENT

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WHAT

INVESTORS

FUND IS THE

WHOLE EGG –

THE BUSINESS,

NOT THE

PRODUCT

PER SE

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MISTAKE #4:

LAYING OUT

FACTS

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DATA DUMPS DON’T APPEAL TO EMOTIONS OR INSPIRE.

BUYING DECISIONS ARE BASED ON EMOTION..

TO WIN INVESTORS

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Investors Want to Hear a Story

About Your Business

Stories are narratives that engage

emotion.

They change how the brain

processes information.

Your story is about a quest - how

to solve a customer problem in a

way that creates ROI for

investors.

Make it enjoyable, entertaining..

MISTAKE #5:

HAVING GAPS IN PLANNING

12 “The plan is useless, but planning is essential.”

MISTAKE #6:

MISUNDERSTANDING

THE MARKET NEED

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PEOPLE DON’T WANT TO BUY A

QUARTER-INCH DRILL. THEY WANT A

QUARTER-INCH HOLE!”

PEOPLE DON’T WANT TO BUY

A QUARTER-INCH DRILL.

THEY WANT A QUARTER-INCH

HOLE!

(TED LEAVITT)

IT’S ALL ABOUT HOW CUSTOMERS

DEFINE WHAT THEY NEED

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JOB TO BE

DONECUSTOMER

SOLUTION

A JTBD is not a product, service, or a specific

solution; it’s whatever the customer needs to

achieve a desired state of being or outcome.

The Market is About

What the Customer Needs

Regardless of Who the Customer Is

COMPANY JTBD NOT BASED ON

eBay Sell personal

items

An auction

psychographic

Google Find

information

A search

demographic

Swiffer Clean floors A profile of people

who mop

MedTech

Device

Heal wounds

cost-

effectively

Demographics or

psychographics of

patients or their

physicians

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MISTAKE #7:

DOWNPLAYING OR OMITTING MARKETING

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PRODUCT

MARKETING

REVENUE

A MARKET CONSISTS OF

BUYERS AND SELLERS OF A

PARTICULAR PRODUCT WITH

THE POTENTIAL FOR A

TRANSACTION.

THE MARKETING PROCESS

CONNECTS YOUR PRODUCT

TO THE MARKET SO SALES

CAN CONNECT IT TO

REVENUE.

HOW FAMILIAR ARE YOU WITH ALL

THE ASPECTS OF MARKETING?

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MARKETING SALES

• Gives strategic direction to the company & product development by understanding what products the customer wants to hire and the job to be done that is the reason why from Day 1 of the concept.

• Gets people interested in the product,

• Establishes the context for sales.

• Focused on customers and the market.

• Generates revenue

by getting people to

buy the product.

• Transfers ownership

of the product to a

customer in exchange

for revenue.

• Focused on the

product and company

after the product

exists.

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Mistake #7:

Failing to Protect IP Assets

• The right to use your

own invention

• Exclusivity

• Opportunities for

financial gain

• Opportunities for

monetization

• An investor priority

INTANGIBLE ASSETS NOW REPRESENT 87% OF S&P 500 MARKET VALUE

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BUSINESS

VALUE

Align IP & Business Strategy

Map Implementation

Initiate IP Protection Cost-Effectively

MISTAKE #9:

HOCKEY STICK FINANCIALS

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NO ONE BELIEVES IT

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SET REALISTIC TARGETS

MAKE REALISTIC

PROJECTIONS

MISTAKE #10:

DISREGARDING

THE BOTTOM LINE

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• Startups depend increasingly on personal savings and personal

loans to bootstrap into early revenue.

• VCs are investing more in fewer startups – taking fewer risks.

• The bottom line for startups: monetize.

• To appeal to investors.

• To qualify for small business loans.

• To self-fund - do it yourself - build your own momentum.

FUNDING A STARTUP IS A STEP-BY-STEP JOURNEY

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NOW JUST DO IT!

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THE CALYX GROUP LLCMAKING INNOVATION FUNDABLE

212.421.5257

www.thecalyxgroup.com

Eleanor Haas, Managing Director

eleanor@thecalyxgroup.com

Continuous Learning

• Job to be Done - Bob Moesta pioneered the concept http://jobstobedone.org/

• The Forum for Growth and Innovation is a community for practitioners familiar with the predictive theories taught by Professor Christensen at Harvard Business School in his signature course Building and Sustaining a Successful Enterprise (BSSE.). www.thefgi.net

• www.thefgi.net › uploads › 2010/09 › What-is-a-Business-Model

• Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld (Author), Jason Mendelson (Author)

• How To Tell A Startup Is A Smart Investment, According To An Investor https://medium.com/@minutesmag/how-to-tell-a-startup-is-a-smart-investment-according-to-an-investor-cf86934c3e73

• Structure Your Presentation Like A Story https://hbr.org/2012/10/structure-your-presentation-li

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