1 / 25

2007 Edward L. Kaplan New Venture Challenge How to Write a Feasibility Summary Workshop

2007 Edward L. Kaplan New Venture Challenge How to Write a Feasibility Summary Workshop. Linda Darragh Ellen Rudnick January 10, 2007. Proudly Sponsored by:. EDWARD L. KAPLAN, '70 Chairman and CEO Zebra Technologies Corp. GUY P. NOHRA, ‘89. AGENDA. Review of Timeline

roddy
Download Presentation

2007 Edward L. Kaplan New Venture Challenge How to Write a Feasibility Summary Workshop

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 2007 Edward L. Kaplan New Venture ChallengeHow to Write a Feasibility Summary Workshop Linda Darragh Ellen Rudnick January 10, 2007 Proudly Sponsored by: EDWARD L. KAPLAN, '70 Chairman and CEOZebra Technologies Corp. GUY P. NOHRA, ‘89

  2. AGENDA • Review of Timeline • Key Elements of a Feasibility Summary • Dos and Don’ts • Q&A

  3. 2007 New Venture Challenge Timeline Jan. 10 Guidelines for writing Executive Summaries Feb. 5 Phase I Summaries due Feb. 26 Teams advancing to Phase II announced Mar. 5 Orientation Meeting in Hyde Park 6 – 9 pm Mar. 26 Bus. 34104, Developing a New Venture, Begins Apr. 27 Full Business Plans due May 21 Finalists announced May 24 Finals at Hyde Park Center, all day

  4. Company Mission or Objective Technology or Proprietary Aspects of the Product/Service (if appropriate) Market Information Competitive Landscape Revenue Model Operation Issues Management Team Financial Information (if available) Business Risks Key Elements of a Feasibility Summary

  5. Mission (objective) of the business What are you selling? What business problem are you solving? How big is this problem? Why should an investor read any further? What is different? Key Elements for a Feasibility Summary

  6. Example 1: The company has developed the SalivaSac™, a proprietary semi-permeable membrane that enables the collection in saliva of biochemical markers below 12 kilodaltons. The company will focus on finding those applications which meet this criteria and where there is an advantage to collecting a non invasive sample. Which is better? Example 2: The Company’s objective is to develop non invasive medical diagnostic tests. The first application is for using a proprietary saliva collection device to measure glucose levels in diabetics.

  7. Technology Describe technology if it is a key differentiator / element of plan. Is it proprietary? Are there patents? Are there key milestones in terms of development or product testing? What are the technology risks? Key Elements for a Feasibility Summary

  8. Market Information How do you define the market? Who is the customer? What is the potential size of the market? How many customers? How much do they buy? Key Elements for a Feasibility Summary

  9. Frames Surfaces: 21% or $558 Million Brushes 75% market is price sensitive 25% Prof artists or $147Million $ 2.8 Billion art supply industry Paint

  10. Competitive Landscape -- Why will you win? Who are current players in the market? Who could be your competition in the future? What are your competitive advantages / disadvantages What barriers to entry will protect you? IP Customer Development process How are you positioned with respect to the competition? Key Elements for a Feasibility Summary

  11. Analysis - Main Competitors Feature Comparison Native Document Hosting/ In-house Web-based Reporting Tracking Search Redaction *In-house, allow third party hosting

  12. Best Evaluation of Competitive Advantages • xxx • Std Calc • Online calc • PDA solution • Barcode scanners • CPOE • IV Smart Pump • Criteria/Metrics • Price • Ease of Use • Portability • Implementation Time • Integration w/other Tech • Database Integration • Functionality

  13. Operations Issues: How will you deliver this product or service? - Make internally or use external resources? Do the costs of providing this product or service provide a sufficient profit? Are there execution risks? Revenue Model / Go to Market Strategy? How will you make money? Why will the customer buy your product? What will the customer pay? - Why are you sure the customer will pay this? - Have you spoken to customers? How will you get to the customer? i.e., distribution channel. How many customers will you get? Key Elements for a Feasibility Summary

  14. Basic Channel Segmentation High Sales Force Value-Added Partners Value-Add of Sale Distributors Retail Outlet Telemarketing Internet Low Cost Per Transaction Low High Source: Friedman and Furey, The Channel Advantage

  15. Management Team/Advisors/Partners Who are they? Why are they relevant for this business? Do you have any holes in the management team? How do you plan on filling these gaps? e.g. Frank Smith, our CTO, has extensive experience in managing and building data warehouses. He previously served as Vice President in charge of Thompson Financial’s database management systems, and worked as a consulting manager with IBM for organizations building data warehouses. Frank received a B.S. in computer science from MIT and an MBA from the Chicago GSB with a concentration in operations. e.g. We currently are looking for a Director of Sales. We have identified several individuals in data/information companies also selling to the Fortune 500 companies, consulting and investment firms that would be interested once we have secured our financing. Key Elements for a Feasibility Summary

  16. Financial Information (if available) What are your economics? (use unit model analysis if appropriate) What are your key assumptions? Why will you eventually make money / go cash flow positive? - When will this happen? How much money do you think you will need? How big will you get? Eventually, this section will need to get very detailed. Business Risks What are you worried about / unsure of? What do you plan to do about it? Key Elements for a Feasibility Summary

  17. Unit Economics Customer Service 13% Sales & Marketing 19% Sensors, Gateways and Other Technology 11% Maintenance, Insurance and Overhead 11% % of Company ABC Revenue Transaction Processing and Wireless Data 8% Operating Profit 38%

  18. Management Contracts: 3 45 135 267 Markets:SF LA Seattle Houston Financial Projections $17 M Revenue $17 M $15 M Cash flow positive in Q4Y2 $13 M $11 M Expenses $9 M $7 M Net Income and Cash Flow $4.1 M $5 M $3 M $1 M ($1 M) Year 1 Year 2 Year 3 Year 4

  19. Financials

  20. Revenue: Sales cycle: 6 months Installation: 50% at contract signing, 30% mid-term, 20% upon completion Annual subscription fee: $xx per seat 2 contracts signed by x/x/0x; 4 by x/x/0x, ….. Expenses Payroll: see attached table of payroll and benefits for founders, new hires and independent contractors Work virtually until x/x/ox, then move into incubator Marketing plan for ‘0x includes 2 trade shows in Feb and Sept., new trade booth purchased in January, development of collateral material, …….. Assumptions

  21. Are there comparables in the industry or other industries that validate your business model? Who are they and why have they been successful? How are they valued and how did they get funded? Have there been successful exits? Multiples Also look for the ‘corpses’. Have similar businesses failed? Why? Comparables

  22. Clichés to Avoid: We have no competition. We are the low cost provider. We only need a 5% market share. Our numbers are conservative. We have the first mover advantage. Avoid Acronyms (or at least explain them) Don’t assume everyone reading plan has your knowledge base Make sure the car has a driver. Someone should be the current CEO. OK to say you will find a permanent / better one later. Dos and Don’ts

  23. Be Clear and Brief Yes: Middleware for wireless networks No: Develops and delivers an integrated suite of packaged applications for web and wireless deployment. Global enterprises use these applications to become more competitive and profitable by establishing and sustaining high-yield interactions and transactions with customers, suppliers, and employees. Be Realistic Avoid the hockey stick effect unless you have assumptions to back it up Dos and Don’ts

  24. Capture the reader’s attention – fast Typical VC will not read past the first page Should answer the following questions in the first page - What is the opportunity? - Why does anyone care? - How will it be achieved? - What is your unique differentiator? Provide tangible examples / experiences wherever possible: Reference customers, - Actual customers best. Potential customers next best. - TALK TO CUSTOMERS. Describe what you discovered. - There is nothing more important than a customer! Focus on how you are going to get that first customer. Credible partners, suppliers, advisors, etc. Identify comparable businesses or business models Dos and Don’ts

  25. Questions?

More Related