1. David R Clark Director of Investment Services

2. Pop Quiz I want to start a new venture because: a)My invention/discovery will help mankind. b)I want to build a company dominant in the market. c)I want to get rich. d)All of the above

3. Recommended Documents (In order of importance) 1.Investor Presentation 2.Elevator Speech 3.Business Plan 4.Executive Summary 5.One Page Summary 6.Customer Brochure

4. Recommended Documents (Probable Chronology) 1.Business Plan 2.Elevator Speech 3.Investor Presentation 4.Executive Summary 5.One Page Summary 6.Customer Brochure

5. What they want to know 1.What is the technology? 2.How big is the market? 3.Who is on the Management Team? 4.Is this a good deal? Venture Investment 101

6. Investor Presentation Single most important aspect of fund raisingSingle most important aspect of fund raising Play to your audiencePlay to your audience Be respectful of timeBe respectful of time Business attireBusiness attire Objectives:Objectives: –Not to close the deal –Invitation to ‘talk’ –Build investor confidence in you

7. Typical South Texas Format Presentation: 20 minutesPresentation: 20 minutes Q&A: 20 minutesQ&A: 20 minutes Investor discussion: 20 minutesInvestor discussion: 20 minutes –You’re not in the room Timekeeper usually presentTimekeeper usually present BTW: This is a ‘somewhat’ universal format for angel groupsBTW: This is a ‘somewhat’ universal format for angel groups

8. Content Elements The problem?The problem? Product/ServiceProduct/Service Value propositionValue proposition MarketMarket CompetitionCompetition Competitive advantageCompetitive advantage Management teamManagement team Revenue modelRevenue model –Revenue received Funding requestFunding request Uses of fundingUses of funding Funding milestonesFunding milestones Pre-money cap tablePre-money cap table

9. Content Timing Every deal is differentEvery deal is different It’s your message and your dealIt’s your message and your deal However,However, –Management –Technology –Market –Financials

10. Coaching Tips Show passionShow passion Show confidenceShow confidence Demonstrate knowledgeDemonstrate knowledge Minimize hyperboleMinimize hyperbole –Name dropping It’s a business deal not an inventionIt’s a business deal not an invention Presentation Team membersPresentation Team members Consistent team attireConsistent team attire

11. More Coaching Tips Graphics, color, & photo’sGraphics, color, & photo’s No hard to read slidesNo hard to read slides –10-20-30 rule Do not read the slidesDo not read the slides –Watch the audience Well choreographedWell choreographed Numbers all ‘foot’Numbers all ‘foot’ Copies for audienceCopies for audience “show & tell”“show & tell” Practice timingPractice timing

12. Q&A Coaching Tips Short direct answersShort direct answers No ‘piling on’No ‘piling on’ Backup slidesBackup slides –Cheat sheet Curve ballsCurve balls –May be asked for a term sheet –Avoid technical discussions –Don’t get defensive or angry

13. Après-Presentation Do a post mortem on each presentation givenDo a post mortem on each presentation given Build an inventory of slidesBuild an inventory of slides Be prepared to give many presentationsBe prepared to give many presentations Remember you are only looking for a few investorsRemember you are only looking for a few investors Expect ‘stay in touch’Expect ‘stay in touch’

14. Why a Business Plan? Business Strategies Product Development Sales & Marketing FinancialOthers Management in sync (Equity Funding World) Sell the venture Due Diligence

15. Preliminary Remarks No proprietary warnings About 20 pages without exhibits About 6500 -7500 words 10 or 12 pt Times New Roman Spellchecker Flesch-Kincaid Readability <30 Table of Contents and page numbers

16. Technology Detailed description of the problem Set up the Value Proposition What is the solution 5 th grader rule Product Description Feature  Function  Benefit Intellectual Property State of Development

17. Market Need Market Size Competition Direct & Indirect Differentiators Pricing Strategy Sales Strategy and process Revenue sources Market

18. Management Team Who is on the team Domain Expertise Entrepreneurial Experience Board of Advisors

19. Attractive Investment Pro Forma P&L – To Exit (5-7 years) Assumptions driving the numbers 20X N5 Pro Forma Balance Sheet Cap table Funding Request Pro Forma Cash Flow The ‘Deal’ and Liquidity Events Use of Funds Integrated timeline

20. Integrated Timeline ($K) Development Sales & Mkting Cash Investment AlphaBeta Production Hire Sales Sign 1 st Distr 1 st Sale $20 $150$350 $110 $15 $135$90 $205 $120 Continued Sales

21. Cosmetics & Presentation Lots of graphics and color Puppies & Kittens Professional binding with heavy paper Double sided printing May want to consider a Marketing Communications advisor The objective is make it easy to read

22. What really happens 1.Read the first paragraph 2.Look at the financials $ Revenue line 3.Look at the Management Team Is there a ‘hook’? How much & 20X N5? Can they pull this off?

23. 23 The Elevator Pitch Origins in “.com” period around 2000Origins in “.com” period around 2000 Short pitch which tells potential investor about the dealShort pitch which tells potential investor about the deal Objective is to get an invite to present the dealObjective is to get an invite to present the deal Could be investors ‘first cut’Could be investors ‘first cut’

24. 24 Key Elements Early ‘hook’Early ‘hook’ Brief description of the product or serviceBrief description of the product or service Revenue modelRevenue model Management teamManagement team CompetitionCompetition Competitive advantageCompetitive advantage Call to actionCall to action

25. 25 Sample Pitch SeekingCapital.com is changing the future of private equity investing. SeekingCapital.com is changing the future of private equity investing. Private equity is a $100 billion a year market, with over 400,000 entrepreneurs aggressively seeking capital at any given time. SeekingCapital.com offers entrepreneurs and investors an efficient and uniquely interactive method for obtaining or investing capital in pre-IPO companies. SeekingCapital.com offers entrepreneurs and investors an efficient and uniquely interactive method for obtaining or investing capital in pre-IPO companies. SeekingCapital.com is not an "Internet only" company, but supports its online community with local franchises in the United States and internationally. Our team has decades of experience in the securities industry, investment banking, private equity, and executive management. My partner and I have worked together side by side for several years co-managing and running the entire Internet operations of a publicly traded brokerage firm. Our team has decades of experience in the securities industry, investment banking, private equity, and executive management. My partner and I have worked together side by side for several years co-managing and running the entire Internet operations of a publicly traded brokerage firm. Our competitors such as XYZ Corp. and ABC Capital have had much success-ABC Capital was recently valued at $550 million... despite several limitations. Our competitors such as XYZ Corp. and ABC Capital have had much success-ABC Capital was recently valued at $550 million... despite several limitations. SeekingCapital.com isn't just a listing or matching service, we offer a community that breeds interaction, education, and discussion. We work with companies globally, through all stages of funding, and across all industries. SeekingCapital.com isn't just a listing or matching service, we offer a community that breeds interaction, education, and discussion. We work with companies globally, through all stages of funding, and across all industries. We are anticipating $XXX million this round to be used for employee building, increased office space, and marketing. We have a compelling two page executive summary that I would like to send you. Can I get your address? Hook Product/ Service Market Revenue Competition Advantage Call to action Management

26. 26 Coaching Tips Show passionShow passion Show confidenceShow confidence Minimize hyperboleMinimize hyperbole It’s a business deal not an inventionIt’s a business deal not an invention Google “elevator pitch”Google “elevator pitch”

27. Biggest Mistakes by Entrepreneurs 1.Too much on the technology 2.Too little on the Management Team 3.Failure to abide by the ‘5 th grader rule’. 4.Failure to articulate the Value Proposition 5.“There is no competition.” 6.“This assumes only a 1% market penetration.” 7.Too much or too little detail on the Pro Forma 8.Does not state ‘The Deal’

28. David Clark Director Investment Services Startech 210.458.2523 drc@startech1.org