1. Money Day Assess Your Need and Readiness For Venture Capital Content provided by Gazelles Systems Content by Gazelles Systems

2. Session Objectives After completing this session, you will be able to: Determine whether your business is in need of venture capital Complete a gap analysis to determine your business’s funding readiness Conduct due diligence on potential VC partners Conduct internal due diligence to determine whether you are ready to make the pitch Content by Gazelles Systems

3. Positive Result Venture Capital Questions to Consider 1. Do I need capital? 2. How do VC’s decide? 3. How do I prepare? Content by Gazelles Systems

4. Venture Capital Question 1: Do I need capital? Is it time to inject some capital into my business? What can I expect to gain from it? Content by Gazelles Systems

5. Purpose of Venture Capital Capital Raised Opportunity Capital (take advantage of unforeseen opportunities) Fudge Factor (because Murphy’s Law is a law) R&D Capital Debt Repayment (as approved) Day-to-Day Operating Capital Project-Specific Capital Content by Gazelles Systems

6. What are the key points VC’s consider in their decision- making process? Venture Capital Question 2: How do venture capitalists decide? Content by Gazelles Systems

7. Balancing Competing Interests THE DEAL (meeting of the minds/compromise) ENTREPRENEUR WANTS/NEEDS INVESTOR WANTS/NEEDS COMMON OBJECTIVES Content by Gazelles Systems

8. Balancing Competing Interests COMMON OBJECTIVES THE DEAL (meeting of the minds/compromise) Maximum return Mitigate risk/downside protection Input on future and growth of the business/control Maximum capital/valuation Avoid dilution/control Affordable cost of capital Relationships and introductions ENTREPRENEUR WANTS/NEEDS INVESTOR WANTS/NEEDS Growth in the value of the business Additional rounds of funding at more favorable valuations Mutually beneficial exit strategy Content by Gazelles Systems

9. Types of Investors Angels Strategic Commercial Lenders Venture Capitalists Private Placement Investors Content by Gazelles Systems

10. Sources of Venture Capital Typical institutional venture capital firms Corporate venture capital divisions Small Business Investment Companies (SBIC’s) Private equity funds Hedge funds Super angels and angel investing clubs Strategic investors Content by Gazelles Systems

11. Management Team Background, knowledge, skills, and abilities of team members Individual roles and responsibilities How risks and problems are identified, managed, and eliminated Entrepreneurial personality traits of management team Products and Services Stage of development Specific opportunity Unique, innovative, and proprietary Level of control of the means of production Technological breakthrough or low-tech Components of Investment Decisions Content by Gazelles Systems

12. Markets Stage in the life cycle Size and projected growth rate of targeted market Marketing, sales, and distribution methods Strengths and weaknesses of competitors New markets, and barriers to entry Characteristics of typical consumer Return on Investment Current and projected valuation and performance Personal investment in the business Financial acuity Capital required Projected return on investment (ROI) Content by Gazelles Systems Components of Investment Decisions

13. Share successes and pitfalls in raising capital Discuss the toughest questions you’ve had to answer and how you dealt with them Content by Gazelles Systems Experience Sharing

14. 10 Minutes Break

15. Venture Capital Question 3: How do I prepare? Presenting and negotiating Checklists Managing your VC partner after the deal is done Content by Gazelles Systems

16. Presentation Tips from Guy Kawasaki 10 Slides 20 Minutes 30-point font minimum The 10/20/30 Rule Content by Gazelles Systems

17. 10 Slides: What to Cover Content by Gazelles Systems

18. Checklists (Right Tools) Funding readiness Due diligence on VC Due diligence on you Content by Gazelles Systems

19. Managing VC’s After the Deal Over-communicate –P2P (People-to-People) Board meetings –Provide financial reports early –Dashboard handful of KPI’s Content by Gazelles Systems

20. What can you share about presenting to VC’s? What was your experience during due diligence? How did you communicate with your board and VC’s on your board? Content by Gazelles Systems Experience Sharing

21. Summary & Wrap-Up Being prepared to make the pitch to a prospective investor is one of the most critical parts of the process. Almost all businesses will need an infusion of capital at some point in their life cycle. Your due diligence needs to focus on these three questions: Is your business funding ready? Do you know which investors are the right fit for your business and the opportunity? Is everything in place to meet the potential investor’s expectations? After the deal, be sure to communicate frequently to keep your investor informed and ready to help when needed. Content by Gazelles Systems