The essentials of a business plan
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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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The essentials of a business plan

the essentials of a business plan

Eric EngineerSevin Rosen [email protected]


What are investors looking for

what are investors looking for?


Your fundraising toolbox

your fundraising toolbox


The essentials of a business plan

CONCISE & CONSISTENT


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”


    The essentials of a business plan

    CONCISE & CONSISTENT


    The essentials of a business plan

    Q&A


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