MOTEPPCABE Getting the Business Plan Right Presented by Steven R. Kopits

Slide 2 of 17 Common Problems Business plans and information memoranda often fail to address critical issues regarding the investment, and often considerable effort is invested in the wrong activities. Many of these problems can be overcome with MOTEPPCABE analysis.

Slide 3 of 17 Investment Criteria MOTEPPCABE MO: Market Opportunity TE: Team PP: Profit Potential CA: Comparative Advantage BE: Barriers to Entry

Slide 4 of 17 Who is your customer? What do they want? How much will they pay? Market Opportunity Define and describe an archetypical customer

Slide 5 of 17 Market Opportunity Size: $50 million revenue in Year 5 Your company has to have significant size potential Market Communication Can you communicate with your potential clients cost- effectively? Credibility: Will they believe you?

Slide 6 of 17 Market Opportunity Market Access Will your potential clients let you in the door? Can you distribute your product? Are the channels open? Are they available at low cost? Can you bill for your product and control client payment risk? How long is the purchasing cycle?

Slide 7 of 17 Management Team Three Attributes Integrity (Attitude) Experience (Knowledge) Competence (Skills, Drive, Energy) Two Questions from VC’s Do I trust them with my money? Can they perform the functions required?

Slide 8 of 17 Management Team Complete Management Team General management capability Sales and Marketing Operations Technology (IT) Strategic finance

Slide 9 of 17 Management Team Strong understanding of market & competition current products/services, prices and costs organizations and business models sales and distribution (existing and proposed) obtain specific LOI’s (term sheet) from potential customers tricks of the trade

Slide 10 of 17 Profit Potential Can I serve my clients at a profit? Refers to implementation Business Model Organization & Structure Factor costs Cash Flow Issues Payment risk Timing of payments

Slide 11 of 17 Comparative Advantage Product or service must be materially Better or Cheaper ”Materially” is defined from the client’s perspective Difference has to be big enough to induce a switch from his current supplier 50% is not a bad number

Slide 12 of 17 Barriers to Entry How will I hold on to my market share in the future, especially when bigger and better capitalized companies enter my market? Barriers to Entry Unique technology, patents or know-how Economies of scale Manufacturing, purchasing, sales, marketing, cross-selling, R&D, personnel utilization or specialization, customer inertia, ‘first mover’ (but with care!)

Slide 13 of 17 Case Study 1 - SuperScan Monitors After six years of research and development with a team of PhD scientists, SuperScan has developed a monitor with 10 times the capabilities of ordinary monitors at only three times the cost. The technology has many potential applications at the advertising, medical, and entertainment fields and has great potential to take market share in the $56 billion monitor market. Why won’t SuperScan be funded at this stage?

Slide 14 of 17 Case Study 2 - Portal.hu Portal.hu is a leading Hungarian internet portal, with over 1 million visitors per day. Along with Other.hu, Portal.hu dominates the internet advertising market in Hungary. How strong are Portal.hu’s barriers to entry?

Slide 15 of 17 Materials You can find the presentation at and

Slide 16 of 17 Contact Steven R. Kopits Princeton, New Jersey, USA