Perfecting your Pitch for Launch Academy 2012

Perfecting Your Pitch

[email protected] 604 484-0070 x 2001

David Shore

davidshore

About Stirling Mercantile

- PERFECTING YOUR PITCH -

Divestitures

M&A Advisory

ExpansionCapital

FairnessOpinions

Early-StageFinance

FAIRNESS OPINIONS

Director comfort & legal protection from independent, expert valuation

EXPANSION CAPITAL

Multiple industry experience

Seasoned corporate financiers

EARLY-STAGE FINANCING

Full-service approach throughout process

Aligned interests likely to secure funding

DIVESTITURES

Corporate financier involvementcan improve price, simplify process

M&A ADVISORY

Sage advice in times of need or growth opportunity

.

Early - Stage Financing


Perspectives

Founder Advisor Investor

Exit Transactions

.

COMMUNICATION

PRESENTATION

COMMUNICATION

Textual Presentations


Graphic Presentations


Textual Presentations

Graphical Presentations

Pricing : A Science and an Art

TYPE OF INVESTOR

Issue Aftermarket

INSTITUTION UNDERWRITE BUY

RETAIL BUY HOLD

STAGS BUY SELL


The Secrets of Superb Public Speaking – John Miers 2009

What was the title of the previous slide?


Keep the answer to yourself for a sec…

Pricing : A Science and an Art

TYPE OF INVESTOR

Issue Aftermarket

INSTITUTION UNDERWRITE BUY

RETAIL BUY HOLD

STAGS BUY SELL


The Secrets of Superb Public Speaking – John Miers 2009

Seating


Both Sides of the Table

http://www.bothsidesofthetable.com/

Eye Contact


Tell Me What You Do

Describe the problem you solve.

“We sell [hardware/software]

that helps [our target market]

to [save money or make money]”


Tell Me What You Do


PRESENTATION

Slides


1. Company Description

2. Team

3. Problem or Need

4. Solution/Demo

5. Value Proposition

6. Addressable Market, Traction

7. Competition

8. Sales and Marketing Strategy

9. Revenue Model

10.Projections

11.Roadmap

12.Summary

13.Contact Information

14.Appendix

10 seconds to 2 minutes each

1

Presentation to:

Date and time

Snapshot

$2m for an active board seat

2

Team John, CEO

• Former ABC, XYZ

Jim, CTO, Founder• Former ABC, PQR

VP Marketing • Identified

David, Board Member• DEF, PQR

.

3

Industry Problem

Revenue is dropping

Expenses are rising

Customers are leaving

4

Our Solution

5

“This should save us $100 per employee per year”

Mr. Big, CEO of Target Customer

Our Solution

5

Reference Clients

Annual $ Buying Decision

ABC Co 35,000 Access from the cloud

LMN Ent. 42,000 Flexible pricing

XYZ Inc. 25,000 Convenience, time savings

• Relate each decision to value• “Price” is a problem

Addressable Market

6

Traction

Competitive Position

Comp

Speed

Functionality

7

Comp

Sales and Marketing Strategy

Pricing strategy

Target markets

Channels or partners

Current funnel

8

Road Map

11

Year 1 2 3 4 5

Early Adopters

Crossing the Chasm

Mainstream Growth

Design

Beta, one sector

Full Launch

IP RoadmapFunding Roadmap

ExitRevenueRoadMap

today

Alpha

Seed, Angel$1.2m

F, F & E$0.3m

Series A$4m

Series B>$10mExpan-sion

ProjectionsProjected Income Statement Analysis($000's)

Year 1 Year 2 Year 3 Year 4 Year 5

Net New Members (000s) 3 21 115 332 612Cumulative Members (000s) 3 24 139 470 1,082Growth 908% 587% 339% 230%

Gross Revenues 68 100% 607 100% 4,309 100% 17,826 100% 46,684 100%

Growth 891% 710% 414% 262%

Direct Operating Expenses 29 42% 255 42% 1,810 42% 7,487 42% 19,607 42%

Gross Profit 39 58% 352 58% 2,499 58% 10,339 58% 27,077 58%

Growth 891% 710% 414% 262%

Selling, General and Administrative 1,040 1528% 1,140 188% 2,571 60% 9,269 52% 21,942 47%

Growth 110% 226% 361% 237%

EBITDA -1,001 -1470% -788 -130% -72 -2% 1,070 6% 5,135 11%

9

Projections

10

• Team

• Market opp

• Timing

13

Summary

Appendix

14

•IP Summary

•Development Roadmap

•Market Segments

•Use Case – Primary Markets

•Use Case – Secondary Markets

•SWAT Analysis

•Positioning Detail

•Channel Detail

•Pricing Detail

•Market Trends

•Tech Trends

•Proforma HR

•Cap Table

•Uses of Capital

Follow up


•A short email that night•Answer open questions and

tasks•Lead into next steps

Avoid Saying…

• ‘Our projections are conservative’

• ‘We have no competition’

• ‘We have a first mover advantage’• ‘We only need to capture x% of

the market share’

.D - PERFECTING YOUR PITCH -

.

COMMUNICATION

PRESENTATION

Thanks


This is on http://www.slideshare.net/davidshore for future reference

http://www.slideshare.net/davidshore

http://www.slideshare.net/davidshore

Tell Me What You Do

Describe the problem you solve.

“We sell [hardware/software]

that helps [our target market]

to [save money or make money]”


Objectives

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

Valuation $500,100 $3,998,955 $15,543,996 $37,695,234

Investment $500,000 $1,000,000 $3,000,000 $10,000,000

F&F Angel Series A Series B

Murphy’s Law

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

Valuation $100,100 $5,000,000 $4,000,000 $3,333,333

Investment $100,000 $1,000,000 $2,500,000 $2,000,000

F&F Angel Series A Series B

High Valuation Trap

Problem:• Follow-on investors value lower than

last• Forced to “cram down” last investors

or no deal

Solution:• Understand downstream valuations

.

Valuation

• Consider the post $ cap table for the next round

• And subsequent rounds to the exit

InvestorsShares Ownership Value Shares Ownership Value

Founders & Mgt 3,700,000 47% 1,423,077$ 3,700,000 33% 3,320,513$ Acquisitions 0% -$ - 0% -$ F&F 600,000 8% 230,769$ 600,000 5% 538,462$ Angel 2,600,000 33% 1,000,000$ 2,600,000 23% 2,333,333$ Series A Investors 0% -$ 3,342,857 30% 3,000,000$ Series B Investors 0% -$ 0% -$ ESOP 900,000 12% 346,154$ 900,000 8% 807,692$ Totals 7,800,000 100.00% $3,000,000 11,142,857 100.00% $10,000,000Price per share $0.38 $0.90

Angel Series A

.

Exit Valuations

• Multiple of – Revenue (eg. $10m x 2 = $20m)– Profit or EBITDA (eg. $3m x 6 = $18m)

• Discounted Cash Flow (can be lame)

• All are better when company is growing– (Importance of timing)

.

Perfecting your Pitch for Launch Academy 2012

Business

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