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- 1. Workshops Investor Repellers “10” mistakes to avoid when you present to investors Andrea Baldini – Tomaso Rodriguez
- 2. WHAT’S THIS? THIS? WHAT’S GONNA HAPPEN? HAPPEN? Short workshop on some things you should (NOT) do when presenting to investors… …with a bit of humor and theatrics… …for all the startuppers out there! FORMAT: MISTAKE RULE Presented to you by Junior Jedi 2
- 4. It’s a story I want to believe in RULE # 0 GOOD COMMUNICATIONS 4
- 5. 5
- 7. What are you going to tell me? RULE # 1 EXECUTIVE SUMMARY 7
- 8. FIRST THINGS FIRST Golden rule: Tell me what you are going to tell me, then tell me, then summarize (= tell me again) 8
- 10. What is it? What is it for? RULE # 2 IT’S THE PRODUCT, STUPID! PRODUCT, STUPID! 10
- 13. Financials will come RULE # 3 BUSINESS MODEL FIRST 13
- 14. BUSINESS MODEL Razor Blade Reverse Razor Blade 14
- 15. SOME EXAMPLES • Advertising • Add On • Razor Blade • Freemium • Low Cost • Pay as you Go • Subscription model • Brick & mortar vs Digital Distribution • Virtual goods • … 15
- 16. BUSINESS CASE • New product/service addressed needs • Breakthrough innovation nearest comparable • Business case: the reasoning for switching from the existing to the new • Always consider: Pros Cons – Laziness of people • ... • ... – Fear of the unknown • … • … BE • … • … CONVINCING! 16
- 18. investors MANAGE risk RULE # 4 SUPPORT WITH METRICS 18
- 19. METRICS • Follow business model and strategy • Financials should reflect them • VCs love measurable things – Make their job easier – Help in proving the value of a concept – Can validate an idea that «sounds good» 19
- 20. METRICS FOR A WEBCO (OLD SCHOOL) • SEM • MWA • SEO CAC • Lead Lifetime • Retargeting LTV Customer • Churn Rate Lifetime Acquisition • Affiliation Value Cost • Recurring Sales • Mob Ads • … • … LTV > CAC ??? 20
- 21. YOUR OWN STRATEGY, YOUR OWN METRICS • «old school» vs. start up VCs don’t like buying user bases • Key: acquire quality users at the lowest cost possible 21
- 22. So you got an idea? That don’t impress me much RULE # 5 EXECUTION 22
- 23. EXECUTION • Idea is NOTHING without execution • No plan = No money from an investor • Go-to-market plan coherent with strategy • Measurable performance 23
- 24. How to segment and identify my segments RULE # 6 FIND THE MARKET BEFORE IT FINDS YOU 24
- 25. THE OLD WAYS • segment = people with the same buying motive • Judging what people will buy based on: – Job – Salary – Level of employment • Largely irrelevant as: – people do not conform to stereotypes – people from all classes and occupations share similar aspirations. © Prof. Paul Fifield 25 http://www.fifield.co.uk/
- 26. THE NEW SCHOOL The best (real) segments comprise people with the same needs & motivations – these change depending on the time, place and event People share the same needs and motivations, not because of who they are, but what brings them together © Prof. Paul Fifield 26 http://www.fifield.co.uk/
- 27. HD AND THEIR BUSINESS DEFINITION © Prof. Paul Fifield 27 http://www.fifield.co.uk/
- 28. IN WHICH BUSINESS ARE YOU IN? “Product led” Company “Market led” Motor Cycles Harley Davidson Big Boys’ Toys Watches Swatch Fashion Accessories Electric Motors B&D DIY = Do It Yourself Electronics Sony Entertainment Watches Rolex Jewelry Cosmetics Revlon “Hope” Coffee Shops Starbucks The Third Place Leather/Luggage Louis Vuitton The Art of Traveling Encyclopedias Britannica Parental guilt Our Product? Our Company Our Business © Prof. Paul Fifield 28 http://www.fifield.co.uk/
- 29. MARKET ≠ ADDRESSABLE MARKET • Sector / niche • Segmentation • Geography • Distribution • Legal constraints • Competition • Barriers to entry • … 29
- 30. Where does taht number come from… RULE # 7 VALUATION 30
- 31. SHOW ME THE MONEY • For VCs and investors valuation comes out of many elements (strategy, focus, market, metrics, biz model, etc., etc., etc.) • Investors are (usually) in for the long term • Market (usually) wins • VCs reason BACKWARDS (exit and dilution) • Incentives needs to be aligned • CAVEAT: be certain to know what you are buying with a certain valuation 31
- 33. We are gonna find it out anyway… RULE # 8 BE TRANSPARENT 33
- 34. SECURITY BY OBSCURITY IS NO GOOD • Be transparent on TEAM, don’t hide missing pieces, be practical • Be transparent on COMPETITORS, which one keeps you awake at night? • Be transparent on LOCK-IN, how you avoid losing ground and user base or customers? • Be transparent on anything, there is going to be a Due Diligence if everything goes well… 34
- 35. Feedback is good, secrets are not RULE # 9 GET CHALLENGED BEFORE PRESENTING 35
- 36. IRIDIUM CASE • 66 low earth orbiting satellites • Allowing subscribers to make phone calls all over the world • Cost of the project over $6 bln • IPOed in June 1997 for $20 / share, in less than one year price increased to $ 72.19 / share • In November 1998 the service was launched 36
- 37. IRIDIUM CASE (cont.) (cont.) • In May 1999 share price was just $ 3.06 • Bankruptcy in August 1999 “We’re a classic MBA case study in how not to introduce a product. First we created a marvelous technological achievement. Then we asked how to make money on it.” Iridium Interim CEO John A. Hey! Did Richardson, August 1999 somebody tell these guys that the product is too bulky??? Source http://lfp-blog.com/how-the- 37 mighty-fall
- 38. LESSONS LEARNED (AT HIGH COST) Always get challenged, feedback is good! DON’T FALL IN LOVE WITH YOUR PRODUCT/IDEA, OR YOU’LL SEE ONLY WHAT YOU WANT TO SEE 38
- 40. One size doesn’t fit all RULE # 10 GET INFO ON VC BEFORE PRESENTING 40
- 41. GET INFO ON VCs BEFORE PRESENTING • VCs will provide «smart» money for your business • But every VC has its own expertise in terms of: – Geographies – Sectors – Network – Markets – Stages of growth – … • Getting financed by a VC is like getting married, you have to choose accurately! 41
- 42. One size doesn’t fit all RULE # 10+ DON’T BE (TOO) BULLISH 42
- 43. THERE ARE NOT MANY GOOGLES AND FACEBOOKS OUT THERE Need of cash € 500 k Planning to sell the company at 15 x EBITDA in 4 years at € 1,2 B 43
- 44. MyProduct Feature 1 Feature 2 Feature 3 Feature 4 Feature 5 Feature 6 Feature 7 Feature 8 COMPARISONS SHOULD BE FAIR ENOUGH 44
- 45. Thank You! You! Investor Repellers “10” mistakes to avoid when you present to investors Andrea Baldini – Tomaso Rodriguez
- 46. Francesco Matteo Tomaso Andrea Emil Inguscio Scarabelli Rodriguez Baldini Abirascid Matteo Matteo Giusy Anna Alessandra Panfilo Faggin Cannone Sargian Giuffranti Federica Francesca Pierantonio Marina Pasini Brescia Luceri Calcagno Umberto Eugenia Raffaele De Feo Di Somma Mauro http://www.juniorjedi.com 46
- 47. Next workshop: Finanziamento VC: capire un term sheet Pierantonio Luceri , Matteo Panfilo 28 giugno 2012 @ StartMiUp Register on EventBrite!
- 48. Q&A
- 49. 49
- 50. GUERRILLA MARKETING Drastic Goodwill Humorous Guerrilla Marketing Cheap One shot Completely Unexpected 50
- 51. EXAMPLE OF BAD EXECUTION • Ben-Gay is a cream to relieve pains very successful in US • When the company decided to launch the Aspirin it was a flop • It was just a naming problem… would you swallow a Ben-Gay? 51