1. Pitching a business to investors
Super-project.eu
Lecture 8

2. Contents 1 2 3 4 5 When to look for an investor Investment proposition
How to identify a good investor? 3
Elevator pitch 4
Investor presentation 5

3. Aim for the session By the end of the session, students will:
Know when and how to look for right investors
Be able to prepare for meetings with investors
Be able to pitch / present their business idea to investors

4. When to look for an investor: Capital need and founder’s goals
Owning a small part of a large entreprise, exit driven
Ambitious plans
External financing
Agressive growth
No. 1 STAR
Owning a large part of a small entreprise, hold driven
Small to medium growth plans
Autonomous financing
Organic growth
Life style business

6. The reasons need for finance (to launch or to scale your business)
senior advice
access to networks
credibility, media coverage

7. Right timing
something substantial is already done, ideally everything what can be done without external financing
time, effort and your money (and money of your family) already invested
first sales (if possible), growing sales (the best)
you are able to demonstrate that the investment will help you grow quickly
it takes time to negotiate and meet investor’s demands, you should approach investors at least half a year before you need money

8. Investment proposition
Know the answer: What do I need?
How much money now and in the future
For what it will be used (investments in sales, marketing, IPR, product development, etc.)
Know the answer: What do I offer?
How big share of your company (ideally, maximally) you are willing to give to investors

9. Investment proposition
Actual share depends on:
negotiation,
amount of money needed,
uniqueness of the business idea,
the team,
IP existence, …
It is usually good to negotiate
Approach more investors than one
Have BATNA (best alternative to negotiated agreement) ready as your contingency plan ...

10. How to identify a good investor?
Plenty of money are available, but some investors would make your life painful
Participate in events – networking events, business plan competitions, hackathons, innovation days, etc.
Get introduced through the shared contact
Information from press about successful deals, friends who got an investment, etc.

11. Elevator pitch
a short sales pitch that provides a summary of your business (idea) to another person in a very concise way in the time span of an elevator ride
You should practice it well in order to get attention of an important person, e.g., when you randomly meet a well- known investor during a conference coffee break.

12. Elevator pitch: structure
First sentence: For (target customer) who (statement of the need or problem), the (product/service) is a (product/service category) that (statement of benefit).
For parents living in a broader Prague area who look for better elementary or secondary education for their children, da Vinci School offers beautiful, affordable and inspiring environment supporting children’s integrity, motivation to learn, self-confidence and social skills.
Second sentence: Unlike (primary competitive alternative), our product (point of primary differentiation)
Unlike in most other schools, we put a huge emphasis on teachers’ personality - their main job is not only to transmit knowledge to children but to inspire them to develop desire for fulfilling their innate potential.

13. Elevator pitch: main issues to tackle
If you have some more time, explain:
What you sell 
Who is your target market (industry, market size)
Who is your competition and what is your competitive advantage
How you make money (revenue model)
Your and your team's background and achievements, senior advisors
… let’s move to longer presentations

15. David Rose's TED talk How to pitch to VCs

16. Presentation for investors: Preparation
Suitability for investors. Be ambitious BUT realistic! (small bakery will not work but new spaceship will not work either)
Come well prepared, know your business really well, but don’t learn presentation by heart
Come well dressed, dress may be aligned to the particular market focus
Provide the vision of scalability
At least, you need a catchy powerpoint / prezi slides and financial model in a spreadsheet

17. Persuasive communication
Don't focus on product details, but on how it delivers more value to customers when compared to your competition
Show something tangible: product, prototype, web ...
Be passionate, enthusiastic and believe in what you are saying.
Self-confident, but not arrogant.
Good team matters. Be able to sell founding members’ capabilities and experience. Let the team to join the presentation with their expertise. Investors need to believe in the team.
Use a hook in the beginning, such as „Google looses two billions USD each year by … „
Try to tell the story behind. Use pictures to illustrate it.

18. Content Well done market analysis Sales & Marketing Finance
Industry description and outlook
Target market
Competitive analysis
Sales & Marketing
Prove early success, clear strategy
Finance
Know the numbers well!
Financial logic must work well unit-wise (costs of unit sold are lower than revenues) as well as overall (scalable, highly profitable)
Be able to present the expected return on investment.
Implementation - Idea itself is not worth millions, persuade investors you can really execute

19. Airbnb presentation
Used by Airbnb's CEO Brian Chesky to raise 600k USD investment in initial funding round in 2008

20. Summary SELF-CONFIDENT AND WELL PREPARED WHEN APPROACHING INVESTORS
HAVE A BIG VISION, A PROOF CUSTOMERS WANT IT, YOUR FINANCIALS MUST MAKE SENSE AND YOUR TEAM MUST BE ABLE TO IMPLEMENT
PRACTISE WELL YOUR PITCH
NEGOTIATE AND CHOOSE THE INVESTOR WISELY

21. Thank You !