Artemis Ventures, LLC 19981 How to Create A Killer Business Plan and Financing Pitch Christine...

Artemis Ventures, LLC 1998 1

How to Create A Killer Business Plan and Financing Pitch

Christine ComafordManaging Director


Bio

Engineer, entrepreneur, venture catalyst 5x entrepreneur, 2 IPOs, 3 M&A, $100

million raised in last 5 years Venture Catalyst specializing in Enterprise

software & Internet enabling technologies 1 other partner Kimball Atwood


Did You Know?

Most business plans are never read by a VC

partner?


Did You Know?

VC investments in Internet firms by 1H99 were over $6 billion -- nearly 2x of 1998

TOTAL!

Source: IDC


Did You Know?

The #1 reason a startup’s valuation is cut is an

incomplete executive team


7 Steps to A Compelling Business

Plan & Financing Pitch


Know the Risks to Address

Financial Market Technology Team


6 Things You Must Have

Stable, working business models Good business plan Competent management Great vision Big markets Good team


Business Model Components Markets & Customers

Profile and Segmentation Key Pain Points Size of the Problem in Dollars Location of those Dollars Competition

Products & Services Product Definition Value Proposition Total Cost Analysis Add-on Product Strategy


Business Model Components (cont’d)

Marketing & Distribution Marketing Strategy Sales Process Implementation Process Strategic Alliances

Financial Engine Pricing Model Revenue Model Cost Structure


1 - State Credibility

Exec team Pedigree (education, past startups) Publicity (published pieces, notoriety, awards) Connections (technology advisor to White

House, etc)

Well-known board members, advisors (who are betting on this company)


Who You Need On Your Team

Visionaries (assorted positions) Leaders (CEO, Managers) Implementers (Sales, Marketing,

Technology) Infrastructure Builders/Supporters

(Operations)


2 - Be Clear

Have 3 key points to deliver Show and tell your story (use words AND

pictures) Repeat the 3 key points at least 3 times Only tell stories that enhance your points


3 - Be Concise and Complete

Why is this a great idea? How will it be executed? How will risk be minimized, return

maximized? What are the sustainable barriers to entry? 20 page plan (3-5 page exec sum with 1

page financials)


Complete Means… Pain/Solution Opportunity/Market Size/Market Analysis Competitors: today and tomorrow Product/Service Definition & Futures Marketing Plan/Sales Strategy/Strategic

Alliances The Team: staff and extended Financials (create a dynamic model)


4 - Be Compelling

This is a HUGE opportunity, we’re the best to seize it, here are 3-5 specific reasons why

You think this opportunity is HUGE today? Check it out in 2-4 years!

There is major PAIN, we remove it -- no doubt

We have the team, technology, right market, “just add water”


5 - Give Them a Reason to Believe

Create the excitement (greed), then… Convey the long term vision (wow! Look

at all the additional markets we can get into!), then...

Spell out the short term practicalities (hey -- these guys look like they could actually make this happen!)


6 - Give Them the Right Info

What is your elevator pitch? In other words if you had to tell someone about your company on a short elevator ride, what would you say?

What product or service is sold?

Who is it sold to?

How much does it cost (average sales price)?


Right Info Cont’d How big is the target market?

What percentage of that market do you need to

penetrate to reach $30 million in sales?

What is your key competition?

What is your KEY differentiation from the competition?


Right Info Cont’d How long would this differentiation last?

Do you have customers? How many? Revenue? How much?Strategic Alliances? With whom?

Is your technology complete? If not, when?


7 - Present Properly

Practice and know it cold Have backup slides for key areas (such as

market segmentation, financials) Be ready with a reference list (for all key

execs, both personal and customer references)


How Long Should a Pitch Be?

A VC pitch should be 20 minutes long (goal: book next meeting)

A customer pitch should be 30 minutes long (goal: convince them to bring the decision maker in)

A recruiting pitch should be 30 minutes (goal: check them out,sell the vision, decide next step)


Rx for Not Naturally Born Speakers

Best speech coaches: Silicon Valley: Steve Mandel 408 475 8202

Boston: Cheever Communications 781 639 1516


Great Entrepreneurial Resources

Read “Burn Rate” - Michael Wolff Read “High Tech Startup” - John Nesheim Check out www.vfinance.com,

www.startupweb.com www.artemisventures.com resources

section has growing library of goodies


Entrepreneurial Resources


Do You Have These?

Right market Right product/service Right timing Right info Right priority Right connections Right team


Christine ComafordGeneral Partner and Managing Director

Thank You

Q & A/Lab Time


Good Idea? Bad Idea?

Your startup is HOT! You do 3 VC pitches and also get some fabulous

press. 10 more VCs call you, and you book meetings with them.



You get 2 term sheets for a $3mil investment both from 2 high value VC

syndicates. One is for a $6mil pre money valuation and 1 board seat. The

other is for an $8mil pre and 3 board seats. There are a total of 5 board seats. You choose the $6mil pre.



Your startup’s product/service is nearly ready for beta. You can take $1mil to get through the beta, sign on a few customers, and make a few key hires, OR you can take $3mil to do even more. With the $1mil you’ll need to start fundraising again in 3 months, with

the $3mil you’ll start fundraising in 12 months. You take the $1mil.



You have a skeletal exec team -- operations and technology only.

You’ll hire a CEO, sales, marketing and business development once you’re

funded. You set aside 15% of your pre-financing stock for the option pool.

Artemis Ventures, LLC 19981 How to Create A Killer Business Plan and Financing Pitch Christine...

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