Bullet-Proofing Dot Com Business Plans What investors look for...

A hard truth... There is no such thing as a new idea, just new versions of old ideas. There is no such thing as a new idea, just new versions of old ideas. Investors see dozens, sometimes hundreds, of dot.com business plans each week Investors see dozens, sometimes hundreds, of dot.com business plans each week To get seen, you’ll need To get seen, you’ll need –luck –a sponsor, someone who will introduce you –an “elevator speech” –a professional business plan –a professional, honest, and powerful pitch

The Problem Clearly state the problem & why it is important for the market Clearly state the problem & why it is important for the market Common mistakes Common mistakes –assuming investors understand market or the nature of the problem –no problem stated –multiple problems –not explaining why the problem needs to be addresses 1

Size of the Problem How big is the potential market? How big is the potential market? Common mistakes Common mistakes –not stating clearly what is being measure spend potential spend potential number of users number of users number of businesses number of businesses money saved money saved hits / impressions hits / impressions size of B2B / B2C markets size of B2B / B2C markets –lack of independent research to back your claims 2

Your Solution Describe your solution concisely Describe your solution concisely How does it solve the problem? How does it solve the problem? Common mistakes Common mistakes –stressing technical aspects, rather than how solution solves the problem –lack of evolution path / roadmap for your solution –not detailing what is created intellectual property intellectual property customer base customer base patents patents 3

Competition What solutions already exist? What solutions already exist? What likely competitors will emerge? What likely competitors will emerge? Why are you superior? Why are you superior? How will you maintain your edge in the future? How will you maintain your edge in the future? Common mistakes Common mistakes –hiding competitors –not able to fully describe competitor’s position –not demonstrating plans for future competitive position 4

Sales Strategy Describe demographic of customers Describe demographic of customers Outline structure of sales channels Outline structure of sales channels Common mistakes Common mistakes –no examples of “hot prospects” –unable to describe structure and management of sales / distribution channels –unable to give job descriptions for each level of sales force –no pricing details –no plans for future pricing changes due to maket maturity / competition 5

Marketing Strategy Describe the key marketing messages Describe the key marketing messages Detail each audience you need to target Detail each audience you need to target –investors, consumers, corporate management, etc Common mistakes Common mistakes –forgetting the marketing campaign –just allotting budget to “marketing,” without concept of how it will be spent –lack of niche marketing projects –lack of mixed online / offline marketing campaigns 6

Management Brief bios of your management and their track- record Brief bios of your management and their track- record Common mistakes Common mistakes –ignoring key management positions CEO, CFO, CTO, VP Marketing, VP Sales CEO, CFO, CTO, VP Marketing, VP Sales –failure to state which positions are not yet filled –lack of industry experience of management –dropping people onto your advisor board rather than filling out key management positions 7

Company Track Record History of company History of company –its successes –its failures –its challenges for future growth Common mistakes Common mistakes –not identifying future challenges and outlining plans to overcome these 8

Expected Revenues How much income will be created over 5 years? How much income will be created over 5 years? How will this be created? How will this be created? Common mistakes Common mistakes –inconsistencies in “assumptions” and financials –not considering major marketing campaigns short-term impact on sales –not knowing size of sales force in relation to sales volume –can’t state which quarter company will turn a profit 9

Investment Required How much investment is required over what period of time How much investment is required over what period of time How will investment be achieved How will investment be achieved Common mistakes Common mistakes –unable to summarize major expenditures –no clear maximum / minimum valuation or share price –not knowing valuation of company or how it was calculated –unable to state what sort of investor is preferred 10

Exit Strategies How will investors get their money back How will investors get their money back Common mistakes Common mistakes –focusing only on IPO –no milestones for investors to gauge performance of business –no idea on the potential multiples for investors on each exit strategy 11

Bullet-Proofing Dot Com Business Plans Q&A