Artemis Ventures, LLC How to Create A Killer Business Plan and Financing Pitch Christine Comaford Managing Director

Artemis Ventures, LLC 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

Artemis Ventures, LLC Did You Know? Most business plans are never read by a VC partner?

Artemis Ventures, LLC 19984

5 Did You Know? VC investments in Internet firms by 1H99 were over $6 billion -- nearly 2x of 1998 TOTAL! Source: IDC

Artemis Ventures, LLC Did You Know? The #1 reason a startup’s valuation is cut is an incomplete executive team

Artemis Ventures, LLC Steps to A Compelling Business Plan & Financing Pitch

Artemis Ventures, LLC Know the Risks to Address § Financial § Market § Technology § Team

Artemis Ventures, LLC Things You Must Have § Stable, working business models § Good business plan § Competent management § Great vision § Big markets § Good team

Artemis Ventures, LLC 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

Artemis Ventures, LLC Business Model Components (cont’d) § Marketing & Distribution  Marketing Strategy  Sales Process  Implementation Process  Strategic Alliances § Financial Engine l Pricing Model  Revenue Model  Cost Structure

Artemis Ventures, LLC State Credibility § Exec team l Pedigree (education, past startups) l Publicity (published pieces, notoriety, awards) l Connections (technology advisor to White House, etc) § Well-known board members, advisors (who are betting on this company)

Artemis Ventures, LLC Who You Need On Your Team § Visionaries (assorted positions) § Leaders (CEO, Managers) § Implementers (Sales, Marketing, Technology) § Infrastructure Builders/Supporters (Operations)

Artemis Ventures, LLC 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

Artemis Ventures, LLC 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)

Artemis Ventures, LLC 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)

Artemis Ventures, LLC 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”

Artemis Ventures, LLC 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!)

Artemis Ventures, LLC 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)?

Artemis Ventures, LLC 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?

Artemis Ventures, LLC 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?

Artemis Ventures, LLC 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)

Artemis Ventures, LLC 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)

Artemis Ventures, LLC Rx for Not Naturally Born Speakers § Best speech coaches: Silicon Valley: Steve Mandel Boston: Cheever Communications

Artemis Ventures, LLC Great Entrepreneurial Resources § Read “Burn Rate” - Michael Wolff § Read “High Tech Startup” - John Nesheim § Check out § resources section has growing library of goodies

Artemis Ventures, LLC Entrepreneurial Resources

Artemis Ventures, LLC Do You Have These? § Right market § Right product/service § Right timing § Right info § Right priority § Right connections § Right team

Artemis Ventures, LLC Christine Comaford General Partner and Managing Director Thank You Q & A/Lab Time

Artemis Ventures, LLC 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.

Artemis Ventures, LLC Good Idea? Bad Idea? 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.

Artemis Ventures, LLC Good Idea? Bad Idea? 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.

Artemis Ventures, LLC Good Idea? Bad Idea? 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.