INVESTOR PRESENTATION

1. INVESTOR PRESENTATION SPRINGBOARD

2. OVERVIEW • The objective of the Investor Presentation is to show that your • venture is a great investment and that you and your team can • and will make it happen • Every presentation is unique but each contains essential • content in a logical progression that investors expect to see • and hear • Nobody reads a Business Plan anymore • …the Investor Presentation becomes the ever evolving • “Business Plan” • Each time you present, you will learn more, you will tweak • and adjust and improve as Q&A and feedback provide new • insights

3. FUNDING SEEKING STEPS “hook” that gets ask for Exec Summary • 90 words or less • from Ex Summary Elevator Pitch one page that gets ask for Invest Presentation Executive Summary • from Investor Pitch • Oral Exec Summary • for special events Quick Pitch 15 minute ppt. that gets a Follow Up Meeting Investor Presentation • Plus +/- 30 min Q&A • Real presentations get • hit with Q&A throughout Much deeper Q&A that justifies DD Follow Up Meeting Investor deep dives for issues • Looking for reason to say “NO” Due Diligence • Serious negotiation • $, dilution, control, • liquidation prefs Term Sheet • Must have professional • representation Funding • Milestone driven Controlled availability

4. “NO!” • The hard reality is that real investors listen to +/-1200 investor • pitches a year and invest in fewer than 6 ventures…so most of the • time they say “NO!” • Your objective is to keep them from finding a reason to say “NO!” • Saying or showing too much too early or the wrong things will • result in a “NO!” • Only reveal enough to get to the next stage • You will not get funded by doing your Elevator Pitch, your Quick • Pitch, sending your Executive Summary, or doing your • Investor Pitch • …each progresses you to the all-important Follow Up Meeting • …so DO NOT “oversell” at any of these stages

5. GET THAT FOLLOW UP MEETING! • Primarily, investors will size you up to see if they want to bet • their money on you…”might be a horse here” but can you ride it • to the winner’s circle? • Second, they need to hear if your venture and funding amount • fits their investment profile…could be outside their domain, • outside their minimum or maximum funding guidelines • A huge challenge is to get to the point on every slide • Pictures and graphics are often more effectively than words • Animation seldom works…sometimes videos work • The objective is to get an Investor Follow Up Meeting…to do this • you have to have a lot of stars in alignment • Developing a solid Investor Presentation enables the alignment

6. GET TO THE POINT! • 15 minutes is the target presentation time…any more and investors • will question your ability to get to the point in running the venture • You can have more than 15 slides, just don’t spend much time on • many of them…can come back later during Q&A • It is essential to have good “back up” slides during the Q&A…tells • investors that you resourceful enough to anticipate their • questions and have ready, good answers • Remembering your BU slides and pulling them up quickly • is a practiced art • No narrative on the slides…use bullet points • You cannot read from your slides…must keep your eyes forward

7. CUSTOMER’S CASH AS VENTURE FUNDING

8. THE INVESTOR PRESENTATION TEMPLATE Slide Content and Order Guidelines

9. BUSINESS DESCRIPTION • Clear, complete and succinct explanation of the company • FOR…(insert target customer) • WHO…(state the need or the opportunity) • THE…(insert the product name) IS A (insert the product category) • THAT…(insert statement of key benefit –compelling reason to buy) • UNLIKE...(insert the primary competitive advantage) • OUR PRODUCT…(insert statement of primary differentiation) • “FOR the bill-paying member of the family who uses a computer WHO is tired of filling out the same old checks month after month, QuickenIS A • software program THAT automatically creates and tracks all of your check • writing UNLIKE Managing Your Money, a financial analysis package, • OUR PRODUCT is optimized specifically for home use.”

10. MAKING MONEY Using graphics, show what you provide to whom and how the money flows back to your business P Users • Design • Manufacture • Assemble • Stock P Distributors P Users Users $ P $ NOTE: Unless listeners “get it” in these 1st two slides…understand the fundamental “business model” or basis of the business, they will miss much of the rest of your presentation as they struggle trying to figure it out. You will lose them

11. OFFERING 5.5 times money in 5 years is a recent average RETURN OF HOW MANY $$$$ in ___ ? YEARS TO INVESTORS ASKING FOR $$$ ? List the entire amount needed to reach breakeven …tranches ok • State how the investors will get their money back • Likely an acquisition by: • Alliance Partner • Competitor • Supplier • Customer • NO IPO unless at least a $300mil valuation NOTE: Investors need to know if the amount you are seeking and the return fits their Investment Profile. When they do, they listen closer. When not, unless you are really captivating, they relax and do other work…i.e., emails

12. THE STORY…60-90 SECONDS OF YOU • …narrate your personal story about what caused you to want to • start this venture • Appropriate photo or video in the background NOTES: This is your chance to connect with the audience as a person …who has a passion for the business and has personal reasons to carry the venture forward Lots of great inventions, technologies, science, and ideas out there but few “driven,” capable people and teams exist to turn them into valuable businesses for themselves and investors

13. PRODUCT…Pain and Solution • Explain why people will see compelling value in your offering • Describe very specific target customer “suffering” today…and • how intense a motivation it is for them to seek a solution • OR describe the “desire” you will create and how strong • it will be….people did not know they desired iPods and iTunes • Now describe the solution(s) your offering provides • in direct relation to the pain(s) • Describe what will compel people to buy considering • their alternatives • NOTE: doing nothing is an alternative

14. COMPETITION …Matrix • Y AXIS…important and relevant offering features • X AXIS…your current and future competitors • Then, checkmark showing who is advantaged on which points NOTE: Every business has competitors for their target customer’s $$$... both direct and indirect alternatives Example: Southwest Airlines claims they compete with cars, buses, trains.

15. SUSTAINED COMPETITIVE ADVANTAGES List and concisely describe your long-term competitive advantages that are not easy to duplicate or surpassable by existing and future competitors

16. BARRIERS TO ENTRY • Describe the key differentiators that will protect the enterprise for • the next 12-18 months or longer • Patents….describe status and key IP • Trademarks, Trade Secrets • Strategic Alliances • First Mover advantage…land grab • Entrenchment • Stickiness NOTE: While trying to grow the business, describe what keeps it from getting irrelevant by an entrant that can out-resource you, out-think you, out-run you?

17. PRODUCT…Validation • Show that your offering actually works and has appeal • Actual sales, customers…quantify • Results of market test, customer experience, clinical trials • Letters of Intent… to purchase, distribute, etc • Memorandums of Understanding… to join forces, etc • Significant testimonials • Other validations NOTE: Validation…just having good ideas and patentable technology is no longer enough to attract investors. You must be able to demonstrate that it actually works …and that proof must be credible

18. MARKET SEGMENTATION • TAM...Total Available Market…show the total size of the market in • the area of the product or service…Nerf ball is total sports • equipment market • SAM…Served Available Market…show the market segment to be • directly addressed…Nerf ball is the segment that desires a • soft ball that will not cause injuries or damage • GROWTH TREND….How much bigger, when and why? • SHARE…What % of the served market is needed for success? NOTE: Investors need to see the Size of the “sandbox” and its Growth rate. The bigger the “real” SAM, the higher the growth rate, and the smaller the % of the SAM that needs to be captured to be successful, the more compelling the venture…

19. GO TO MARKET…Customer Acquisition • and Retention • Describe how will you capture and “own” your defined, ideal, target Customers? Constituents? • The progression is to create, in order… • Awareness • Interest • Trial • Use • Repurchase • Recommendations and referrals • Chart your cost of customer acquisition over 5 years NOTE: Truly knowing your customers better than the competitors and then acting of that knowledge better and faster is, fundamentally, what separates successful ventures from the rest….Prove that you can do this and you will get investor attention

20. STRATEGIC RELATIONSHIPS • Describe Alliances you have or will form to… • Provide needed resources and markets • Give credibility and comfort for you customers • Knock down regulatory • Underwrite patent infringement • Provide a ready exit NOTE: An alliance partner is more likely to share your vision, understand your business, markets and customers and see more value in you and your enterprise than a purely financial investor

21. FINANCIALS …Basic Business Economics • Show unit Costs of Goods Sold • Show unit prices through your channels to the end buyer • Show Gross Margins at each channel step • Justify your pricing and compare it to competition NOTE: This leads to and must precede the Financial Overview

22. CASH FLOW…line graph showing you will not run out of cash over the investment period 5 –YEAR PROFIT (LOSS) line graph PIE CHART…use of investor funds 5 – YEAR Pro-Forma Summary P&L REVENUES COST OF SALES GROSS MARGIN OPERATING EXPENSES R&D MARKETING AND SALES GENERAL AND ADMINISTRATIVE TOTAL OPERATING EXPENSES OPERATING PROFIT (LOSS) OTHER INCOME (EXPENSE) PROFIT (LOSS) BEFORE TAX FINANCIALS…FOUR CHARTS ON ONE PAGE NOTE: Your financials will not be accurate. But investors must know that you have gone through a reasonable process and recorded assumptions about the future of the enterprise that resulted in these financial charts and tables

23. 1 1 2,500 0 6 12 Profit (Loss) 18 Cash Flow 24 24 FINANCIALS…example 12 $ 000’s $ 000’s MONTHS MONTHS M&S 49% (100) 1,500 (150) G&A 26% (200) 500 COS 9% R&D 16% Pro forma P&L Use of Funds

24. DEVELOPMENT TIMELINE (What does the investor money buy when?) Mass Production Market Development II Pilot Test Project Milestones Ramp Up Production Market Development I Strategic Planning BREAKEVEN 2009 2010 2011 2012 2013 Financial Milestones $50k/MO FOR 12 MO. $600k $25k/MO 18 MO $450k EXIT TRANSITION Time (How much money needs to be spent when?)

25. MILESTONES …Some, to-date and future NOTE: Completed, significant items give credibility that you can accomplish planned future activities

26. ASSUMPTIONS AND RISKS NOTE: Investors need to know you are thinking about the same “gotchas” they are and are planning to “de-risk” these.

27. MANAGEMENT TEAM • Photos, Names, working positions (rather than titles) • NO CEO unless held that title at successful company • “Founder” is customary • Start up experience • Qualifications that suggest “success” • ADVISER TEAM • Especially important if management has little experience or no start up successes • Photos, Names, company logos • Successes in bringing start-ups to profitability and • exit in your market space and technologies NOTES: Above all else, investors invest in capable, agile people who can and will make the venture happen Photos make the team and advisers “real”

28. EXIT STRATEGY…paying off investors • Who is going to pay? • How much? • Why? • Provide a few relevant, credible comparables NOTE: Unless investors see a reasonably clear path to getting their target returns within an attractive time frame, they will not have much interest in your venture

29. VALUATION….a FUTURE projection An acceptable method is to identify reasonable “comparables” and imply your venture will have a similar value in the future 1. Identify companies like yours in the same space that have been acquired within the last 1-3 years 2. Show how much was paid by whom….usually expressed as a multiple of sales or EBITDA (earnings before interest, taxes, depreciation and amortization) 3. Now make sure the returns you are offering to investors is in sync with at least two of the comparables Example: Comparables sold at 4 times sales You project $10 million in sales in year 5 You can claim a value of $40 million in year 5 So you can claim a 5X return to investors providing $1 million in funding This $5 million is 13% of your company in year 5 The issue is that you do not have those sales or earnings now…so your real company value is something less….to be negotiated with the funders

30. Three to five points that tell the audience why your venture is a great investment Superior financial returns quickly Advantaged product/service with enough target customers who will be compelled to buy Product/service validation proof Solid barriers against competitors The team who will make it happen Others …..THESE MUST BE SUPPORTED DIRECTLY BY YOUR PRESENTATION SUMMARY

31. ENOUGH! …for the Intake Panel • Does not have to be perfect but you have to be coachable • and your venture has to have “minimum” viability to be • accepted into the SDSI Springboard process • To be “coachable” you have to have listen, understand, • not be defensive, do what you agree to do well and on time • “Minimum” viability means you have completed every slide • in the Template (not all the Backup slides yet!) well • enough so the Intake screeners see venture potential • Once in, you will get guidance to further develop your Investor • Presentation from experienced business strategists • One-on-one • Through Marketing, Finance and other panels

33. BACKUP SLIDES…the real “AUDITION” • The Investor Presentation, when done properly, is only 15 minutes • However, the Q&A will run 30-60 minutes…BULK OF THE TIME! • This time is used to dive into the details that are important • to the investors and that you only skimmed over initially • Many of your “front” slides are used during Q&A • Backup slides are always used during Q&A • So it is all about anticipating the questions, preparing the • backup slides, finding them and, finally, using them to illustrate • and illuminate the answers you give • The Q&A is your real “audition”…investors get insight in how it • be to work with you

34. MARKETING • 1. BEFORE & AFTER. List buyer conditions “before and after” • buying your product/service • Show what was lacking and what got better? • Now prioritize from most to least compelling

35. MARKETING • 2. VALUE PROPOSITION. The most compelling reason for a • a potential customer to buy your product/service • Choose the most compelling Before & After case • Articulate a MANDATORY “must have” reason to purchase • State the benefit to the customer’s balance sheet • Combine the above into a succinct, single statement • Must articulate a value proposition statement for each • customer type separately

36. MARKETING • 3. DIFFERENTIATION. • Describe what is truly about your product or service. • Describe what your product does that does not exist in the • marketplace today • Verify those claims with independent data • Describe what makes that difference sustainable • Describe how competitors will be held off and for how long

37. MARKETING • 3. DIFFERENTIATION. continued. • Describe the benefits these differentiators will bring to customers • and your business competitiveness • Tell how it will save and how much • Tell how it will make money and how much • Tell how it will increase the size of the market • Tell how it will decrease risk for customers

38. MARKETING • 4. MARKET SEGMENTATION. The size of the market must be • described • TAM is the Total Available Market • Describe the total size of the market in the area of the • product or service…Nerf football is the total sports • equipment market • SAM is the Served Available Market • Describe the size of the market segment* that the company • will actually address…Nerf football is the segment of the • TAM that desires a soft football that will not injure • children or cause damage • * segment is a group of buyers who are similar in that they: • Have the same problem • Have the same buying criteria • Would see each other as credible reference in making a • buying decision • Are not “could buy” but “must buy” customers

39. MARKETING • 5. COMPETITIVE LANDSCAPE. Helps frame your product/service • and your chances for success. For each segment: • Identify the incumbent players…include workarounds, apathy, • your target customer’s internal abilities • Describe how entrenched is the status quo • Describe why your competitors are the current best solutions • Describe how the competition has framed themselves • Show your competitor’s position statements • Demonstrate how your message is different and compelling

40. MARKETING • 6. BUSINESS MODEL DETAILS. • Identify the segment with the most compelling need relative to • your differentiation in the competitive marketplace (this is the • SAM) • Show the possible revenue streams for that segment • Show and justify your pricing that fits that segment • Show your pricing relative to the competition • Explain the likely revenue mix that could be achieved • Explain the most suitable/available channel(s) to market • Show a graphic of how good flow to each customer segment • detailing how and how much money come back to you

41. MARKETING • 7. GO-TO-MARKET PLAN. Tactical issues regarding reaching • your customers and developing sales • Show the buying process…how purchases are made • Identify the real buyers and their motivations to buy • What information resources do they use to make buying • decisions • Explain how you will identify, qualify, acquire and convert • customers • Explain how your marketing tactics will move potential buyers • through the buying process • Explain how the buyer prefers to buy and therefore how you • will have to sell • Identify and justify your sales channels, show how they will • increase your sales, be compensated, be valued • Prioritize your channels and explain the order

42. MARKETING • 8. BUDGET. Show the cost of acquiring customers..5 year timeline • Now that you have developed the go-to-market plan, a price for the • cost to execute on the plan must be developed. • Develop and show the budget with detailed line items with • researched quotes and bids. • The budget must include enough capital to provide a six-month • runway of execution on the go-to-market plan. • Any media programming, P/R, advertising, trade shows, • conferences, and events must be included. • NOTE: the cost of acquiring customer must decrease over time

43. FINANCE • For 5 years show… • Detailed revenue model showing all sources of income • Detailed cost of goods sold model showing all typical costs for • this type of enterprise • Detailed operating expense model • Including detailed headcount model showing adds • to support growth

44. FINANCE

45. FINANCE

46. FINANCE

47. IP DETAILS

48. TECHNOLOGY DETAILS

49. PRODUCT DETAILS