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the essentials of a business plan. Eric Engineer Sevin Rosen Funds [email protected] what are investors looking for?. your fundraising toolbox. CONCISE & CONSISTENT. get it down to less than 15 slides. Slide 0 Title + intros + back story Slide 1 10,000 foot view

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get it down to less than 15 slides
get it down to less than 15 slides

Slide 0Title + intros + back story

Slide 110,000 foot view

Slide 2problem definition

Slide 3how you uniquely solve the problem

Slide 4product demo / case study

Slide 5market analysis + sizing

Slide 6competition + sustainable advantage

Slide 7market traction + GTM plan

Slide 8team bios

Slide 9unit economics + financial projections

Slide 10company status + funding needs/uses

Slide 11exit potential

Slide 12summary + next steps

Appendixlots of back-up slides

0 title intros back story
0: title + intros + back story

Build credibility and rapport in the first five minutes by providing context andfinding common ground:

  • Do homework on the investor (past investments, common contacts, past employers, familiarity with space)
  • Start with a reminder on how you met or why/how you were introduced
  • Provide quick bios of your founding team; focus on experiences that are relevant to your startup
  • The “founding story” is often a good segue into the slide presentation
1 the 10 000 foot view
1: the 10,000 foot view
  • “Tweet” pitch: summary of your summary
  • Problem you solve and for whom
  • Market positioning / advantage / opportunity
  • Top 1-2 accomplishments to date
  • Initial strategy as part of a long-term vision
  • How much you are raising
2 the problem definition
2: the problem definition
  • What problem do you solve?And for whom?
  • How do you know it’s a real problem?
  • How are customers handling problem today?
  • Do you speak your customer’s language?
  • Is there adoption friction?
    • Aware of the problem?
    • Urgency? Feeling pain? Medicine or Vitamin?
    • Willingness to pay? Existing or new budget?
3 how you uniquely solve the problem
3: how you uniquely solve the problem
  • How does your offering solve the problem?
  • Offering = product +go-to-market strategy
  • What’s your secret sauce?
  • How much better/unique/different?
  • What evidence do you have?
4 product demo case study
4: product demo / case study
  • Demo is NOT a features and functions walk through
  • Illustrate the customer problem and your unique solution to that problem
  • Build your demo around a “case study”
  • Provide context before starting
  • Focus on 1-2 core “use cases” that create value and differentiate your product
  • PRACTICE, PRACTICE, PRACTICE
  • Consider a video if you are not good at demos
5 market analysis sizing
5: market analysis + sizing
  • Big picture description of market dynamics
    • Why now? Why a startup?
    • Graphics are useful
  • Define and segmentyour market
    • Identify low-hanging fruit
    • Short-term vs. long-term
  • Market size estimates
    • SAM vs. TAM
    • Bottoms-up vs. tops-down
    • Consider changes over time
    • “sanity check”
6 competition sustainable advantage
6: competition + sustainable advantage
  • No competition = no market
  • “doing nothing” / “good enough” substitutes
  • What is the basis of competition?
  • How does your advantage grow over time?
      • Economies of scale
      • Network effects
      • Data scale
      • Brand
      • Distribution
      • Virtuous cycles
  • Patents are nice to have but not enough
7 market traction gtm plan
7: market traction + GTM plan
  • Evidence of “product/market fit”
  • B2B: adopters, customers, partners, press/analyst
  • B2C: users, virality, engagement, monetization
  • Go-to-market plan
    • Product Definition + Positioning
    • Marketing + Distribution + Sales Plan
    • Business Model + Pricing
8 team bios
8: team bios
  • Why are you the best team to capture this big opportunity?
  • Focus on relevant experiences
  • Don’t exaggerate or be too verbose
  • Be open and honest about your gaps and weaknesses; have a plan to address them
  • Avoid title inflation; think of the future
  • Recruit advisors to build credibility
9 unit economics financial projections
9: unit economics + financial projections
  • Demonstrate unit economics of business model
    • Pricing, acquisition costs, churn, lifetime value
    • Data points supporting your assumptions
  • 3-5 year financial forecast
    • bookings, revenues, gross margin, key operating expenses, cash needs
  • Overlay with key stages, milestones, metrics
    • # customers, product releases, new channels, cash-flow break even, financing rounds, etc
  • Nobody will believe your numbers!
    • Mechanics and key assumptions are what matters
    • Clearly identify key assumptions and why you feel confident in them
    • What drive revenues, margin, and expenses?
    • Is it consistent w/ market sizing and GTM plan
    • If you’re taking a SWAG be up-front about it and explain how you will learn more over time
10 company status funding needs uses
10: company status + funding needs/uses
  • Think of financing as a series of experiments where you learn more at each stage  reduces risk + increases value of your company
  • Each stage should have clear value-creating milestones
  • How are you going to use the funding in this stage? In future stages?
  • How much money do you need to get to cash-flow breakeven?
  • Do you have enough buffer if things don’t go according to plan?
11 exit potential
11: exit potential
  • Where is sustainable value being created?
      • Customer base / traffic / engagement
      • Partner / distribution network
      • Data / content / “real estate”
      • Unique technology / capability
      • Revenues / EBITDA
  • Who are the likely acquirers and why?
  • Are there analogs from the past?
12 summary next steps
12: summary + next steps
  • Similar to “10,000 foot view” slide but more focus on momentum, potential, & fundraising schedule
  • Do not leave meeting without defining some clear “next steps” :
    • Setting up next meeting (i.e. visit to your offices to meet other team members, meeting with other members of the firm, more in-depth product demo, meet after key milestone completed, etc)
    • Sending due diligence materials
    • If “too early”, then define what investor would need to see to consider investing in the future
    • Understand the VC firm’s “process” and make sure you’re talking to the right person in the firm
  • Add investor to “status update” emails to “friends of the company” (no more than one per quarter)
appendix
Appendix
  • Don’t be afraid to include several more slides with lots of detail
  • Group and label Appendix slides based on topic areas (product, market, financials, etc)
  • Use these slides to answer questions that come up during/after the presentation
  • Create a second version without appendix (or with subset of appendix) for “emailing” and “printing”
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