Your “Financial Pitch”

Getting your financing organizedMaking your “Killer Pitch-deck” PPT for Investors

Some tips, advice and secrets to think about…

What we will talk about today

What to think about before you think about raising money• High Concept Pitch – which comes from

your Killer Pitch-deck!What types of Investors are there?What the Investors are thinking about youMaking your ‘Killer Pitch-deck’ (12 - 15 slides

to sell your story effectively!)

What to think about first

• There is no magic formula for getting financing• Know where your “hub” or ‘cluster’ is • Pick a great co-founder• Important values - Intelligence, Energy, Integrity • Pick a big market AND KNOW IT IN NUMBERS!• Have a “Minimum Viable Product” (MVP) - be

passionate about it• Iterate to Product / Market fit • Raise money from people you trust; keep control • Scale

Start building your ‘traction’• Test your market!• Markets are relatively efficient - so you are

likely wrong at first pass• Buy ads against non-existent product to

sell “Coming soon” • Talk to the customers directly • Ship immediately and often• Go for the low-end of the market as you

get started! Find it, use it, own it!!

Learn about Investors!

•Trust people they have backed •Know within 5 -10 minutes (usually)

•Market is hit-driven •Resist outside CEOs •Valuation is irrational

Are you sure about getting involved with Investors?• Investors demand certain types of legal

structures • Exits are much harder• Usually don’t look at cash-based businesses

• Committee-based strategy • Hiring pressure • Valuation is temporary : Control is forever

Traction talk gets the conversation started!

Traction – WHAT IS IT? You need to tell a story with numbers

YouSocial Proof

(who is involved with your business, where your product is selling etc.)

ProductMarket

(What you are already doing!)

High Concept Pitch (Financial Pitch)Elevator Pitch

Presentation (“Killer Pitch-deck”)

Types of Investors

Bootstrapping! (F, F, F’s)Banks

Crowd-fundingAngel Investors

Super AngelsVenture Capitalists (VC’s)

Bootstrapping• You should already know this!

•Friends•Family•Fools

Banks• See Ibu Suryani in Incubator for more details!

•There are banks that support Entrepreneurs and specialize in startups!

Crowd-funding• Definition – Wikipedia• Google ‘crowdfunding’• YouTube videos (there are a lot!) -

http://www.youtube.com/watch?v=OI-bTpbkH4Y&feature=related

• Example of business that used crowdfunding successfully - http://www.entrepreneur.com/video/222633/smart

• Websites that do crowdsourcing for funding (there a many):• http://www.kickstarter.com/• http://www.microventures.com/• http://www.lendingclub.com/• Crowd funding is now emerging from Hong Kong…

Angels• Individuals who invest their own money into

Startups• Generally invest a limited amount every time• Usually invest alongside other investors• High risk tolerance; often invest before proven

market traction• Make quick decisions (usually within 1-3 meetings)• Often are former entrepreneurs or startup

executives• Usually make between 2 - 10 investments per year• Unlikely to care about controlling rights• Find the list of Angel investors for your market

Super Angels (or Micro Venture Capitalists)

Individuals or Small fund who invests other people's money into Startups

Fund size is usually in many MillionsUSA$$$

Similar investment amount as Angels (but it comes from a Fund, not personal money)Usually invest alongside other investorsHigh risk tolerance; often invest before proven market tractionMake quick decisions (usually within 1-3 meetings)Can make between 5-20 investments per year (some will do even more)May not care for controlling rights in companies they invest inFind the Super Angels in your market

Venture Capitalists (VC’s)• Members of a fund (can be between 1 and 20+ partners at

one fund) who invest other people's money into Startups

• Fund size varies between $300M to $4B

• Generally invest more than $1M at a time• Often want to have a major portion of the round• Lower risk tolerance; rarely invest before proven market

traction or in unproven entrepreneurs• Have pre-determined process for decision-making (between

3-6 weeks)• Will take board seat or retain some controlling rights in

companies they invest in• 1-2 investments per partner per year

What type of Investor should you target?• Kitchen Table – BOOTSTRAP – Family, Friends and Fools…

• Research what local BANKS can do for you - new policies (women, green, social) but know what the ‘terms and conditions’ are

• See if Crowd-funding will work for you

• First time startup getting traction – ANGELS• First round of non-family financing – ANGELS• Once you need more than $1MillionUSA - VC’s - but make sure you have

your mentor/investor relationships in place first! This takes time to build…. VC’s usually don’t meet with Entrepreneurs - and they won’t consider Entrepreneurs unless you already have used Angel investing - but they will talk with your BoD! The VC’s advise you on how to do your fundraising!

CHALLENGE 1

• Post a Google URL of an Investor for class Facebook page by the end of this day 23:59

• No duplicates in information• Identify what sector the Investor works in• Identify two startups they have already

invested in – • EXTRA POINTS FOR SPECIAL ASSESSMENT

How much money$$$ should you ask for?• Raise as much money as you need to get

to your next milestone!

• Make it so you can stay ‘alive’ for the next 12 - 18 months

• During this time, when you are running out of cash, it is called ‘the runway’ - like a plane, getting ready to take off!

This is what your Investor will want to know about you• If you are efficient with $$$Capital• If you can fulfill orders to market

(Capacity)• If you already have products in market• If you have clear insight on what works• If your team is “battle-tested”• If you have concrete ideas on how much $

$$ you need

The Investor is still thinking…

• Is this a big market opportunity?• What is the problem you aim to solve?• Does your solution evince credibility?• Could I imagine wanting to use this?• How will you get distribution? • What’s the deal with the team?• How is this different from competition? • How will this make money / get mass adoption?• Are you serious on execution?

In your tool-kit you must have…• Great Tag Line• Elevator Pitch• High-Concept Pitch…(15-20 minutes) max

• “Killer Pitch-deck” (10-12 slide Presentation)

• 1-Page Executive Summary (captures all of your important information on your business – summary of

your Killer Pitch-deck) • Intro E-mail (you send this to an Investor to start the

relationship…)

Great Tag Line

Make it memorable!

CHALLENGE 2

•RIGHT NOW + next 10 minutes!

• Write a summary of your business idea in less than 20 words and post to Facebook

• PER TEAM – I entry!• (Hint: this is your business tag line!)

• Twitter - @ZenParry• EXTRA POINTS FOR SPECIAL ASSESSMENT

The Elevator Pitch• Forms first impression of your venture• Like a good TV or radio commercial!

•“WHAT HOW WHY”• A lot of great examples on YouTube: • http://www.youtube.com/watch?v=Tq0tan49rmc&feature=related• http://www.youtube.com/watch?v=jEd0fjXsk8w• http://www.youtube.com/watch?v=-6ggSQCM1ug&feature=related• http://www.youtube.com/watch?v=dqIEE-g_-Uc&feature=related

Focus on the problemTell a story! - Use simple language

Have a great closing - PRACTICE A LOT!

CHALLENGE 3• DURING NEXT TWO WEEKS UNTIL

Wednesday 17 Oct - Pitch Faculty, Facilitators and/or Ibu Zen in UC!

• Make it a team effort (so that everyone is

involved – not just an individual!)

• Document the ambush then upload to your class FB page! Video, pic, email evidence!!

• EXTRA POINTS FOR SPECIAL ASSESSMENT

High Concept Pitch (Financial Pitch)RAISING $$$ – say how much you have already raised and how much more you are asking forPRODUCT/SERVICE – describe what this is, very clearly, short sentences, and mention your website, Facebook page etc.TRACTION - Tells what you are currently focused on, what growth you have had (Sales, Customers, etc.) USE NUMBERS!SOCIAL PROOF - Tell who is already committed to the project for financing, and if they are important people, tell where they have invested in the past. Also tell about your Advisory BoardTEAM - Talk about your management teamMARKET - Describe your market – major players, minor players

What are your differentiators (features, unique selling point etc.)

CompetitorsMarket feedbackWho you are targeting and why this is different to your competitors

Make your “Killer Pitch-deck”

• An example of a 12 slide deck#1 - Introduction#2 - Problem#3 - Solution (with a Demo!!)#4 - Market size and value#5 - Business Model – how you will make money!#6 - Distribution (& Marketing)#7 - How special are you?#8 - Competition#9 - Team#10 - Funding status (Money and Milestones)#11 - Last slide (final memory)#12 - Appendix of possible questions

#1 – Introduction slide

You know how to do this slide!

Example Slide – Introduction slide

“academy of you”

#2 – State your problem

• This slide should be simple and easy to understand!

• Every time you do this slide, investors should nod their head that this is a problem.

• Secret tip – Identify what is the problem?• Who has this problem? • How many have the problem? • How do you know?

Example Slide – Stating the problem

Problem: Online Education is Hard and Expensive

CustomIntegration

Udemy lets anyone create an online course. For free.

#3 – State your solution

• Solution• Demo or prototype• Your Product solves big pain for specific customers….

Describe.• Simple bullet list• More detailed than Problem, but still simple• Simple diagram also works

• Secret tip – describe why your solution: Makes customers very happy, does it better and different from anyone else

content

Example Slide - Giving the Solution

#3b – Demo or Prototype• Have a good one, accept no substitutes

• Rehearse it until you do the presentation in your sleep

• Have at least 2 backup routes available• Backup PC, iPhone or whatever• Video YouTube demo

• If no demo, then at a minimum get a mockup or have a decent sample available!

• Your passion for your demo should be obvious

udemy live

Example Slide – Showing demo of product

#4 – Market OpportunityTop Down – someone else reported it• Analyst reports• Comparables in the market• Thought leadersBottom up – calculate users/usage/revenue$• Average spend amount + $X• Y customers in our market• Average customer buys Z times per year• Market size = $X * Y * Z annually = BIG MONEY• Market growing at XX% per year• Compare your ambitions with those of your future peers…

Example Slide – Showing the Market Opportunity

Source: Market Size from IBISWorld and MarketResearch.com

Informal Education

$9B

Education and Training

$40BOnline

Education$52B

20% CAGR

Corporate Education

$134B

Platform for Many Markets

Total Education Market: $2 Trillion

Initial FocusInformal Online Education

#5 – Business Model (How do you plan to make money?)# Describe Top 1 – 3 Revenue sources for your business•- Prioritize by Size, Growth and/or Potential •- Current market activity/customer behavior as proof

# Show how you get to Break-even (or Profitable)# Describe your Revenue model:

Direct:- Sales, Subscriptions, Digital goods, eCommerceIndirect:- Advertising, lead generations, affiliates

Secret tip - “Three ways we make money”:

Transactional (we charge for WXYZ services or from orders)Advertising (charge for click thru, or premium sponsored listings)Supplies (licensing, or charging other fees)

Example Slide – Business Model (how they make money)

Business Model

20% of Sales

Educators decide what to charge for and how much

Students Pay for Courses or Live Instruction

#6 – Distribution (+Marketing)• Code for “Marketing Plan”• Show lots of channels, lots of decisions

then choose a few key channels• Make sure you can explain how your

product will get to market and be ‘distributed’

Secret tip – 3 things that matter and must be measured:

Volume Cost Conversion

Suggested Content: Distribution Information• Online:• Partner with fashion bloggers (for your fashion company)• Google AdWords campaign (to specific regions)• Generate SEO traffic via fashion listing pages

• Offline:• Distribution partnership with ….. Where are they located?• Contest?• PR event (like a fashion shoe)?

Example Slide – Showing how their business is distributed

Udemy’s Sustainable Growth ModelEducators Create Courses

Educators Promote their Course Online

Students Learn on Udemy, and Share Udemy with Friends

Educators Earn $ on Udemy

$ $

Udemy Rocks!

2,000 Page Views to Ross’s First Course

Example: Ross Jeffries

Most requested Feature.

Constant Twitter/Facebook Chatter since Launch

#7 – What is your UNIQUE advantage?• Describe what is your advantage….• Do you have a great market share that nobody else has?• Is your team exceptionally experienced?• Are you making an amazing breakthrough product?• You have IP or Patents or Proprietary Technology?• An exclusive partnership?• Great sales and marketing team?• What is your ‘secret sauce’ that nobody else has?

E.g. – you deliver on time or faster than anyone else because…

• WHAT IS IT THAT MAKES YOUR BUSINESS SO UNIQUE WITH A KILLER ADVANTAGE OVER EVERYONE ELSE IN THE FIELD?

Example Slide – TRACTION – what makes you unique!

Traction

• Instructors• 900 instructors have 1,600 courses• Extremely active and passionate teacher community• Half of our teachers ask for payment options• Over 10,000 assets have been uploaded to Udemy

• Users– 12,000 unique visitors per month– 9,000 signups– 600 daily unique visitors

Example Slide – TRACTION with numbers!

Traffic/Usage Assumptions (monthly)

Monetization Assumptions Q4 2011

Unique Vistors 3,000,000

1/50 Create a Course 60,000

50% of courses paid 30,000

Average Cost per Course $20

Average Buyers per Course 30

Total Monthly Sales $18,000,000

TOTAL Monthly Revenues $3,600,000

Growth Assumptions Current Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011

Unique Vistors 20,000 60,000 100,000 300,000 750,000 1,500,000 3,000,000

Ratio of For-Profit Courses 0% 5% 10% 20% 40% 45% 50%

Number of Buyers per Course 0 10 15 20 30 30 30

Traffic (in thousands)

“A new kind of online classroom experience”

“online learners are certain to benefit… from Udemy”

“one of the most compelling features is Udemy Live”

“Udemy offers an experience that rivals the real classroom”

“Enables anyone to teach online”

Example Slide – more TRACTION – Publicity!y

#8 - Competition• List all top competitors (it makes you look like you know

your business sector!)• Say how you are better or at least different

• If not better, then what is your ‘niche to win’• What is your positioning – it matters!• Make a graph – 2 axis – and show where the players are

Secret tip – Useful comparisons/differentiation• Simple v.s. complex• Value v.s. cheap• Cheap v.s. expensive• Consumer v.s. enterprise• Open v.s. Proprietary

#9 - TeamWho are you & what have you done?Briefly, i.e. 90 seconds / founder or less•If you have a technology based product, have the GEEKS onboard!

Do you have Special skills on your team?•What is your Entrepreneurial experience? Have you already created other companies? Sold them??•Sales/Marketing – who is doing this and what are they results/track record?

Also identify – •Key hires you will be making in the next year….•What roles you have candidates for (you will hire them when the funding comes through…..)•Do you have job descriptions written for these positions? Estimated salaries?

Example Slide – Team photo and titles JUST JOKING!!

Gangnum Style Team

Top Management

#10 – Funding Status (Money and Milestones)•

Show 3 budgets – Small, Medium and Large• Small – this is you now! You already have this……

• What will you do with the capital?• Key hires (how many extra people and what for)• Marketing and Sales (how much money do you need to run

campaigns to get extra customers and build revenues)• Infrastructure (Scale-up)

• Achievable Milestones (Roadmap!)• How will you get to next financial milestone• Show break-even or profit with this funding• Show relationship customers/revenues

Suggested Content: What you will do with the funding• Asking for $250K in October 2012• Valuation of business $500K

• Angel Investors – Pak Denny, Pak Yo, Pak Ivan• Build initial product line; functional use with 120 customersUse of money$100K: hire 3 x social media marketing experts, 1x customer

support specialist, 1 x office manager, 1 x admin assistant$150K: market research, marketing campaigns and customer

acquisition (buy lists)Goals and MilestonesGet 10,000 customers, $250K revenue by April 2013Estimated break-even in August 2013, with sales at $80K per

month

Example Slide – showing what you will do with the money

Fundraising• Raising $1M for 1.5 years of runway

• Operational Capital• 3 full-time team members• Hire part-time System Administrator and full-time Front-

end Developer (UI, UX)

• Goals• Reach 1,000,000 unique visitors• Reach $100,000 in monthly teacher sales• Prove business model and sustainable user growth model

Suggested Content - Roadmap• MAKE A GRAPH IN EXCEL or CHART• What is happening over the next 6

quarters?• How much headcount will that take? • Will that really move the needle in terms

of traction? • What is happening over the next 6

quarters

Example Slide – Type of road map showing Break-Even

Profit projectionsSix Quarter Outlook

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#11 – Last slide

• Leave them with something to remember you by!

And as Steve Jobs always said:“Oh, and one more thing…”

{Steve Jobs never had to ask for financing…..}http://www.youtube.com/watch?v=2-ntLGOyHw4

Make sure you put your contact information for the investor!

#12 - Appendix

• Have answers to potential questions already figured out

Killer Deck-Final reminders!

MAKE SURE YOU HAVE ANSWERED ALL OF THESE QUESTIONS:How much are you raising?How long does this financing last?What markets do you think are most promising?What holes exist in your team (what talent do you need to hire)?Why won’t your competitors Business YYY or Company ZZZ be better than you?What makes you the right team to do this?

• 12 - 15 slides or less – 20 minutes at most – less is better!• Keep it simple and sweet!

List of slides for “Killer Pitch-deck” – again!

• Your slides should be (in this order) -• 1. Intro – Quick short liner of what you do (elevator pitch).• 2. Problem you are trying to solve – how a problem exists, and how people find it

painful• 3. The solution with Demo - how cool is your product/solution is!• 4. Market size and value – how big is the market in users and in spending value• 5. Business / Revenue Model – how will you make money• 6. Marketing and Distribution plan – how will you grow your user base• 7. How are you special? – Technology or something else that makes you special• 8. Competition – how you stack up against them• 9. Your Team – how awesome you all are• 10. Funding status – how much money you need and how will you spend it• 11. Last Slide – leave them with something to remember you by positively• 12. Appendix – Have answers to any potential questions and more details here

Example: Video of “Facebook” Pitch to Investors• Video 33 minutes – An adaptation of the “Financial Pitch”

before their Initial Public Offering (IPO)• http://www.geekmarketer.com/videos/watch-zuckerberg-pitc

h-why-you-should-invest-in-facebook/• The video covers all of the key points: Market Opportunity• Problem – Solution - Distribution (& Marketing) – Team –

Competition – Execution – Demo - Business Model• Some memorable lines……….Facebook helps you share what is

important to you • Timeline and Newsfeed• You live through the communication of those things to the people you care

about

• Each person has a story!

Examples of other High Concept Pitches (from TechStars USA)• Go to YouTube and search on “TechStars Demo days” – you

will see videos where teams have crashed and burned in front of the investors!

• From TechStars sessions Demo Day (< 10 minutes): http://www.youtube.com/watch?v=h56G31e0fD0

• TechStars on Bloomberg.com television (This is a series and episodes are 45 minutes long):

• http://www.bloomberg.com/video/78212132-techstars-episode-6.html

• One TechStars pitch (<10 minutes): http://www.youtube.com/watch?v=w6tW0P0SFAg

Indonesian Incubators and AcceleratorsKevin Mintaraga who founded Project Eden http://www.youtube.com/watch?v=TMDBRTzpzSkProject Eden http://eden.co.id/On YouTube http://www.youtube.com/watch?v=TcU3fsHmlLk

Startuplokal - http://startuplokal.org/# On YouTube http://www.youtube.com/watch?v=s0VF8UivFt8 On Facebook http://www.facebook.com/StartupLokal?fref=ts

Merah Putih http://merahputih.co.id/

Idea Source http://ideosource.com/index.html (Auditions in Surabaya!)

Singapore Government has program for Indonesia http://www.ida.gov.sg/Programmes/20120419161029.aspx?getPagetype=33

Global Entrepreneurship Program Indonesia (GEPI) http://www.gepindonesia.org/programs/

Other Incubators and Accelerators in the USA• Y Combinator http://www.ycombinator.com/• 500 Startups - http://500.co/• More are listed here:

http://www.forbes.com/sites/tomiogeron/2012/04/30/top-tech-incubators-as-ranked-by-forbes-y-combinator-tops-with-7-billion-in-value/

• The focus for these Incubators is usually high-tech or “fast growth startups”

• There are many Incubators and Accelerators in the USA – search on Google

Extra Resources• Google for examples online of ‘Killer Pitch-deck”

http://www.adamwaaramaa.com/fundraising/writing-your-pitch-deck/• Two creative PPT’s for a High Concept Pitch - http://investors.evr.st/ and

http://investors.dressrush.com/• Interesting YouTube example: http://www.youtube.com/watch?

v=wyrFWbGiGOc• These guys are big time famous: http://www.businessinsider.com/airbnb-a-

13-billion-dollar-startups-first-ever-pitch-deck-2011-9#-1• Guy Kawasaki’s Books & Blog on pitching• Online article with good information:

http://www.entrepreneur.com/article/220141

WORK ON YOUR PROFESSIONAL PRESENTATION SKILLS!

Challenge 4

• Make your Killer Pitch-deck and submit to your Faculty

• Deadline – Friday 19 October 23:59pm

• EXTRA POINTS FOR SPECIAL ASSESSMENT

Terima Kasih….• You can ask me questions while I am at Universitas Ciputra

until October 20. Send an email to set up a short meeting…..

• zenparry@gmail.com• Facebook – zenparry@gmail.com• Linkedin.com – zen parry

• Thanks to sources of content on Facebook, YouTube, Udemy.com (for their great slides) and other links on the internet

• Good luck developing your Financial Pitch and Killer Pitch-deck