SDSI Springboard Proprietary & Confidential SDSI SPRINGBOARD INVESTOR PRESENTATION THERE ARE HELPFUL...

SDSI SpringboardProprietary & Confidential

SDSI SPRINGBOARD INVESTOR

PRESENTATIONTHERE ARE HELPFUL TIPS FOR MOST SLIDES - SEE NOTES SECTION OR USE ‘NOTES VIEW’ IN POWER

POINT


ROLE OF AN INVESTOR PITCH•The objective of the investor presentation is to show that your venture is a great investment and that you and your team can and will make it happen.

• Every presentation is unique but each contains essential content in a logical progression that investors expect to see and hear.


GETTING TO “YES”

• The hard reality is that real investors listen to +/-1200 investor pitches a year and invest in fewer than 6 ventures. So most of the time they say no.

• Your objective is to keep them from finding a reason to say “no”.

• Saying or showing too much too early or the wrong things will result in a “no”.

• Focus your presentation at each stage, on the relevant content that will make an investor want to go to the next stage of the funding process.


FUNDING ELEMENTS

Executive Summary

Elevator Pitch

Quick Pitch

Investor Presentation

Due Diligence

Term Sheet

Funding

“hook” that gets askfor Exec Summary

one page that gets askfor Invest Presentation

Oral Exec Summary• for special events

15 minuteppt. that gets aFollow Up Meeting

Much deeper Q&Athat justifies DD

Investor deep divesfor issues

Serious negotiation•$, dilution, control, liquidation prefs

Controlled availability

• 90 words or less• from Ex Summary

•from Investor Pitch

•Plus +/- 30 min Q&A•Real presentations get hit with Q&A throughout

•Looking for reason to say “NO”

•Must have professional representation

•Milestone driven

Follow-Up Meeting


• 15 minutes is the target presentation time. Any more and investors will question your ability to get to the point in running the venture.

• You can have more than 15 slides, just don’t spend much time speaking to many of them, they can come back later during Q&A.

• Do not read from your slides, maintain eye contact with audience.

• Remember YOU are the only one with the script, so if you forget something, or get it out of order, YOU ARE THE ONLY ONE WHO KNOWS UNLESS YOU REACT, JUST MOVE ON.

• Don’t think out loud, frame your sentences before you speak. • Uhm, is not a word we should use ever.• Pauses between thoughts and sentences are NORMAL, and gives your audience the

chance to digest and understand what you are saying.• You need to breathe when you are speaking, so don’t be afraid to end a sentence vs.

using AND and keep talking trying to OVER EXPLAIN something. • Monotone speaking is the best way to instill a lack of confidence in you and cause your

audience to turn you off and start working on their mobile devices.• Get to the point on every slide while presenting.• Figure out what the most important thoughts or bullet points are, use voice inflections to

emphasize key words or thoughts, make it natural to you or it does not work.

TIPS TO PRESENTING


This template serves as an example; modify as appropriate to make sure your company’s story is represented effectively.

• The purpose and process of completing this template is to help you understand the nuances of your business that investors expect to see, however this template should not be translated directly into a visual presentation.

• There are explanatory notes for most slides – please see notes section or use notes view in power point.

• Prepare back up (BU) slides for use during the Q&A. This tells investors that you are resourceful enough to anticipate their questions and have answers.

• Using your BU slides effectively is a practiced art.• Pictures and graphics are often more effective than words• Animation seldom works, sometimes videos work• Avoid narrative on the slides when possible, use bullet points• This template includes the SDSI branding - use Slide Master to create your own

branding

TEMPLATE GUIDELINES


THE INVESTOR PRESENTATIONTEMPLATE

Slide Content and Order Guidelines

THERE ARE HELPFUL TIPS FOR MOST SLIDES - SEE NOTES SECTION OR USE ‘NOTES VIEW’ IN POWER POINT


COVER SLIDE

•Logo or product picture •Tagline/value proposition•Presenter’s name


“FOR sports and active lifestyle (SAL) industry stakeholders WHO are committed to the development of SAL business and the expansion of the SAL industry, SDSI IS the only nonprofit organization THAT provides mentoring, access to capital, elite level networking, collaboration, industry research and talent pipeline for the SAL industry. UNLIKE other membership based nonprofits, OUR organization is dedicated solely to driving the SAL industry and economy.

BUSINESS DESCRIPTION


YOUR COMPANY•Design•Manufacture•Assemble•Stock… Distribution

Users

$

$

P

P

P

P

Users

Users

Supplier(s)

$

P

BUSINESS MODEL


OFFERING• Seeking $700,000 in Convertible Notes at 4% interest • Convertible into Company equity at a 25% discount to

value established by qualified financing• No further financing is anticipated • Anticipated investor exit within 5 years which will achieve

a 9 X return

$ %Fixed assets 100 14%R&D 150 21%Working Capital 350 50%Contingency 100 14%TOTAL 700 100%

Use of Funds (000’s)


60-90 SECONDS OF YOU•Narrate your personal story about what caused you to want to start this venture•Appropriate photo or video in the background

THE STORY


Explain why people will see compelling value in your offering

• Describe very specific target customer “suffering” today and how intense a motivation it is for them to seek a solution

• OR describe the “desire” you will create and how strong it will be, ex., people did not know they desired iPods and

iTunes

Now describe the solution(s) your offering provides in direct relation to the pain(s)

• Describe what will compel people to buy considering their alternatives

• NOTE: doing nothing is an alternative

PRODUCT PAIN & SOLUTION


MARKET OPPORTUNITY

XYZ Target Demographic

10-16yrs

SAM XYZ Million Youth Athletes

TAM XYZ Million AthletesGrowth Rate xyz%

Target Customer: •Demographics•Personas (2-3)•General Traits

Target Market:•Stage I: Southern California•Stage II: United States•Stage III: International

Goal & Objectives:•Capture .01% of SAM to achieve goals.•5 YR target goal of business Model

Assumptions: (examples)Each customer will have an average spend of XYZEach customer will reach 5 other users


GO TO MARKETGive your marketing campaign a name. Bring it to life!Goal – Identify your 5 year revenue goal

Goals & Objectives:•State goals and objectives and make them measureable. For example:

o Build Awareness & Education o Drive Acquisition o Develop Loyalty – Repeat Business

Customer Acquisition:•Identify how you will acquire your customers (i.e., Web, Retail)•Give example of general path to conversion (i.e., mktg campaign, drives people to web, web drives ecommerce)•Average cost of acquisition•Lifetime customer value


GO TO MARKET CONTINUED Strategies & Tactics:•Describe strategies & tactics to reaching goals and objectives (these build awareness and drive acquisition). For example:

oStage I – RegionaloMobileoSocial MediaoPrint & Digital MediaoStrategic PartnersoSponsorships / PartnershipsoBlast Team – InfluencersoTraveling Road Show

oStage II – NationaloMeasure, Adjust, Re-Deploy


ValueComponents

YourCompany

Competitor #1

Competitor #2

Competitor#3

One X X O X

Two X O X X

Three X O X O

Four X X O X

Five X X O X

Six X O X O

COMPETITOR OVERVIEW

Commentary (Use this space to highlight key strengths & weaknesses)•Point 1•Point 2•Etc.


Describe the key differentiators that will protect the enterprise forthe next 12-18 months or longer

•Patents, describe status and key IP•Trademarks, Trade Secrets•Strategic Alliances•First Mover advantage…land grab•Entrenchment•Stickiness

SUSTAINED COMPETITIVE ADVANTAGES & BARRIERS TO ENTRY


Show that your offering actually works and has appeal

• Actual sales, customers (quantify)• Results of market test, customer experience, clinical trials • Letters of Intent (to purchase, distribute, etc.)• Memorandums of Understanding (to join forces, etc.)• Significant testimonials• Other validations

PRODUCT VALIDATION


Describe strategic relationships you have or will form to

•Provide needed resources and markets•Give credibility and comfort for you customers•Overcome regulatory barriers•Manage IP issues•Provide a ready exit

STRATEGIC RELATIONSHIPS


DISTRIBUTION PLAN / MARGIN ANALYSIS

Your Regional Major Retail End

Company Distributor Chain Outlet User Yr. 1 Yr. 5

Unit Cost/Price to: $15 $30 $40 $45 $90

Margins by Channel:

Thru Distributors 50% 33% 50% 5% 25%

Thru Major Chains 63% 56% 0% 35%

Direct to Retail 67% 50% 25% 10%

Direct to End User 83% 70% 30%

ProjectedTypical Price/Margin to:

END USER

Channel Mix (Pct.)


FINANCIAL OVERVIEW (proforma highlights)

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Profitability ($000's)

Revenue 100 500 2,000 10,000 20,000

Gross Profit 50 325 1,400 6,000 13,000

EBITDA <50> 0 450 1,500 4,000

Margins (%)

Gross Profit Margin 50% 65% 70% 60% 65%

EBITDA Margin Loss 0% 23% 15% 20%

Key Assumptions*

End Cash ($000's) 75 100 550 2,050 6,050

Units Sold (000's) 10 50 200 1,000 2,000

Product SKU's 5 10 15 20 25

# Retail Locations 0 50 500 2,000 4,000

# Distributors/Chains 6 12 18 24 30

Marketing Exp. ($000's) 40 150 500 2,500 6,000

Marketing Exp. (%of Rev) 40% 30% 25% 25% 30%

Headcount 1 5 20 50 200

*Key assumptions shown are illustrative. Use assumptions most relevant to your company

Highlight End Cash, Unit Volume, and key financial "driver" metrics


2012 2013 2014 2015

Strategic Planning

Market Development I

MarketDevelopment II

Pilot Test

Mass Production

2016

Ramp UpProduction

OperatingMilestones

Burn $120K $450K

DEVELOPMENT TIMELINE(What does the investor money buy when?)

(How much money needs to be spent when?)

BREAKEVEN

$500KInvestment $1M

EXIT

FinancialMilestones


MILESTONES

WHAT ? WHEN?$$$ INVESTED? IMPACT/RESULT?

Past

Past

Past

Past

Future

Future

Future


ASSUMPTIONS AND RISKS

ASSUMPTION/RISK

List some critical assumptions or risks that may affect the realization of revenue and profit projections…

….in decreasing order of probability

(do not include natural disasters, acts of war and such)

POTENTIAL IMPACT

Across from each assumption, describe the negative impact of each

MITIGATION

Across from each, now describe what you are doing to mitigate or de-risk


MANAGEMENT TEAM

Photos, names, working positions (rather than titles)• NO CEO unless held that title at successful company•“Founder” is customary• Startup experience• Qualifications that suggest “success”

ADVISOR TEAM

Especially important if management has little experience or no start up successes

•Photos, names, company logos•Successes in bringing start-ups to profitability and

exit in your market space and technologies

TEAM


VALUATION AND EXIT

Potential Acquirers include:Company Strategic ValueCompany A Enhance Product LineCompany B Patented TechnologyCompany C Provide access to New Channels

Equity Rate of Return Calculation

Year of Exit 2018

Equity Investment 700,000% of Company Owned 20%

EBITDA (2018) 3.80 3.80 3.80 3.80Exit Multiple 6.0 7.0 8.0 9.0

Enterprise Value 22.80 26.60 30.40 34.20Plus Excess Cash 6.00 6.00 6.00 6.00

Value of Equity 28.80 32.60 36.40 40.20

Investor's Share of Exit Value 5.76 6.52 7.28 8.04

Return Multiple 8.23 9.31 10.40 11.49

Investor Return at Alternative EBITDA Exit Multiples ($'s in mils)


SUMMARYThree to five points that tell the audience why your venture is a great investment

– Superior financial returns quickly– Advantaged product/service with enough target customers who will be

compelled to buy– Product/service validation proof– Solid barriers against competitors – The team who will make it happen– Others


• Does not have to be perfect but you have to be coachable and your venture has to have “minimum” viability to be accepted into the SDSI Springboard process

• To be “coachable” you have to have listen, understand, not be defensive, do what you agree to do well and on time

• “Minimum” viability means you have completed every slide in the template (not all the backup slides yet!) well enough so the Intake screeners see venture potential

• Once in, you will get guidance to further develop your investor presentation from experienced business strategists

•One-on-one•Through milestone panels

ENOUGH! …for the Intake Panel


The investor presentation, when done properly, is only 15 minutes• However, the Q&A will run 30-60 minutes…BULK OF THE TIME!

• This time is used to dive into the details that are important to the investors and that you only skimmed over initially

• Many of your “front” slides are used during Q&A• Backup slides are used as needed during Q&A

• So it is all about anticipating the questions, preparing the backup slides, finding them quickly, and using them to illustrate and illuminate the answers you give

BACKUP SLIDES the real “AUDITION”


MARKETING1. BEFORE & AFTER List buyer conditions “before and after” buying your product/service

• Show what was lacking and what got better?• Now prioritize from most to least compelling


MARKETING2. VALUE PROPOSITION. The most compelling reason for a a potential customer to buy your product/service

• Choose the most compelling Before & After case• Articulate a MANDATORY “must have” reason to purchase• State the benefit to the customer’s balance sheet• Combine the above into a succinct, single statement

• Must articulate a value proposition statement for each customer type separately


MARKETING3. DIFFERENTIATION

• Describe what is truly about your product or service.• Describe what your product does that does not exist in the marketplace today• Verify those claims with independent data• Describe what makes that difference sustainable• Describe how competitors will be held off and for how long


MARKETING3. DIFFERENTIATION continued

•Describe the benefits these differentiators will bring to customers and your business competitiveness

• Tell how it will save and how much• Tell how it will make money and how much• Tell how it will increase the size of the market• Tell how it will decrease risk for customers


MARKETING4. MARKET SEGMENTATION The size of the market must be described

• TAM is the Total Available Market•Describe the total size of the market in the area of the product or service…Nerf football is the total sports equipment market

• SAM is the Served Available Market•Describe the size of the market segment* that the company will actually address…Nerf football is the segment of the TAM that desires a soft football that will not injure children or cause damage

* segment is a group of buyers who are similar in that they:•Have the same problem•Have the same buying criteria•Would see each other as credible reference in making a buying decision•Are not “could buy” but “must buy” customers


MARKETING 5. COMPETITIVE LANDSCAPE Helps frame your product/service and your chances for success. For each segment:

• Identify the incumbent players…include workarounds, apathy, your target customer’s internal abilities• Describe how entrenched is the status quo• Describe why your competitors are the current best solutions• Describe how the competition has framed themselves • Show your competitor’s position statements• Demonstrate how your message is different and compelling


MARKETING

6. BUSINESS MODEL DETAILS

•Identify the segment with the most compelling need relative to your differentiation in the competitive marketplace (this is the SAM)• Show the possible revenue streams for that segment• Show and justify your pricing that fits that segment • Show your pricing relative to the competition• Explain the likely revenue mix that could be achieved• Explain the most suitable/available channel(s) to market• Show a graphic of how good flow to each customer segment detailing how and how much money come back to you


MARKETING7. GO-TO-MARKET PLAN. Tactical issues regarding reaching your customers and developing sales

• Show the buying process…how purchases are made• Identify the real buyers and their motivations to buy• What information resources do they use to make buying decisions• Explain how you will identify, qualify, acquire and convert customers• Explain how your marketing tactics will move potential buyers through the buying process• Explain how the buyer prefers to buy and therefore how you will have to sell• Identify and justify your sales channels, show how they will increase your sales, be compensated, be valued• Prioritize your channels and explain the order


MARKETING8. BUDGET Show the cost of acquiring customers..5 year timeline

Now that you have developed the go-to-market plan, a price for the cost to execute on the plan must be developed.

• Develop and show the budget with detailed line items with researched quotes and bids. • The budget must include enough capital to provide a six-month runway of execution on the go-to-market plan. • Any media programming, P/R, advertising, trade shows, conferences, and events must be included.

NOTE: the cost of acquiring customer must decrease over time


FINANCIALS Proforma P&L & Cash Flow

Profitability -- $’s in 000’s Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Revenue 100 500 2,000 10,000 20,000

COGS(Var. Costs) 50 175 600 4,000 7,000

Gross Profit 50 325 1,400 6,000 13,000

Operating Exp.

- Marketing 40 150 500 2,500 6,000

- Payroll 50 100 350 1,500 2,000

- Other 10 75 100 500 1,000

Tot. Op. Expenses 100 325 950 4,500 9,000

EBITDA <50> 0 450 1,500 4,000

Cash Flow -- $’s in 000’s Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Beginning Cash Balance 50 420 210 350 1,000

EBITDA <50> 0 450 1,500 4,000

Working Capital (change) <70> <200> <300> <800> <1,200>

Investment (change) 500 0 0 0 0

Capital Expenditures <10> <10> <10> <50> <300>

Ending Cash 420 210 350 1,000 3,500


FINANCE Actual Comparables


IP DETAILS


TECHNOLOGY DETAILS


PRODUCT DETAILS

SDSI Springboard Proprietary & Confidential SDSI SPRINGBOARD INVESTOR PRESENTATION THERE ARE HELPFUL...

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