university of connecticut writing a business plan n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
University of Connecticut Writing a Business Plan PowerPoint Presentation
Download Presentation
University of Connecticut Writing a Business Plan

Loading in 2 Seconds...

play fullscreen
1 / 39

University of Connecticut Writing a Business Plan - PowerPoint PPT Presentation


  • 83 Views
  • Uploaded on

University of Connecticut Writing a Business Plan. February 23, 2010. Form / grow seed-stage technology ventures Joint venture of Phoenix and CT Innovations Investments of $500K to over $1 million Focused on CT-based companies with Complete business plan Proprietary technology

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'University of Connecticut Writing a Business Plan' - yorick


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.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide2
Form / grow seed-stage technology ventures

Joint venture of Phoenix and CT Innovations

Investments of $500K to over $1 million

Focused on CT-based companies with

Complete business plan

Proprietary technology

Beta-stage prototype

Fully invested in eight portfolio companies

Two acquisitions (SignStorey to CBS, Design2Launch to Kodak)

Two remaining operating companies

Next Generation Ventures

$15 Million Venture Fund

  • Initial management team
  • Well-defined market niche
  • Clear path to revenue and profitability
slide3

Capital with experience

Our hands-on approach combines capital with operations experience and expertise

Industry Expertise

Financial Capital

Operational Skills

We build relationships of trustbased on our experience, knowledge, and ability to contribute

slide5

Introduction

Entrepreneurs rarely get it right on their first try …

Start-up survival rates over time

Number of Start-ups

VC funded 3/10

w/o VC funds 1/10

Year

slide6

Introduction

A small % of “good ideas” get venture funding

slide7

Introduction

$

Commercial

Success

Angel

$500M $500M $1,000M $5,000M $10,000M $50,000M

Seed

IDEA

Business

Formation

Development/

BETA

Finalize/

Market Entry

Market

Penetration

Growth/

Profitability

IPO/Sale

3-5 Years

Early

Funding Stages

Late

IPO

slide8

Introduction

High risk - high returns

“Angel”

“Seed Stage”

“Early”

“Late”

“IPO”

$

Valley of Death

Maturity

low level of exits
Low level of exits

Venture-backedmerger & acquisition exits 2007 to 2009

Venture-backedinitial public offerings 2007 to 2009

slide12

Overview

Nearly 3,000 companies receive venture capital funding per year in the US … over $17B in 2009!

  • Angel Investors - Friends, family and wealthy individuals
  • Seed-stage Funds - Vulcan Ventures, NextGen, Institutional angels, etc.
  • Strategic/Corporate Investor - Intel Corporation, Cisco Systems, Dell Ventures etc.
  • Private Equity Funds - JP Morgan Capital, Oak Investment Partners etc.
  • Commercial Banks - Fleet, Citigroup etc.
  • Investment Banks - Goldman Sachs, Credit Suisse First Boston etc.
most active venture investors in 4q091
Most active venture investors in 4Q09

14 Firms did ten or more deals

slide15
Limited Partners

Pension Funds

Corporations

Insurance Companies

Endowments

Angels/Individuals

Non-Profits

Public

The Funding Process

Provide Capital

Allocate Capital

Use Capital

Investors

VC Funds

Portfolio

Companies

  • General Partners
    • Professionals
  • Entrepreneurs
slide16

The Funding Process

About 85% of private equity is controlled by funds, created by pools of investors (limited partners) … General partners manage the pool and share the profits

LPs

99% of $

80%

VC Fund

Portfolio Companies

$

GPs

1% of $

20%

slide17
At NextGen we have a 5-Step review process…but the real work starts in step 5…

The Funding Process

Pre-screening

“First Pass”

Phase I DD

Present to IAB

Invest/Support

slide18
Management, Management, Management!

Proprietary technology or competitive advantage

Productivity enhancement

Provides genuine business solution

Unique, not easily imitated

Attractive market opportunity

Size and growth rate of target market

Limited competitors & alternative solutions

Ability to become a market leader

What do they look for?

Strong management is key!

slide19
Attractive financial returns

Well-developed and achievable business model demonstrating scalability and high returns (IRR > 50%)

Path to profitability

Feasibility of Plan

Path to market

Strategic partnering

Definitive stages of development

Exit strategy (know the options)

Strategic partner

Sale of company

IPO

What do they look for?

slide21

What do they look for?

1-PageSummary

Multi-page Executive Summary

Full Business Plan

Business Plan Presentation

Financial Model and Projections

Term Sheet and Due Diligence

Financing Documents

slide22

1-Page Exec Summary

This template is commonly used by angel investment groups

  • The benefits are:
  • Quick overview
  • Standardized
  • Makes you think
  • The “gist” or “heart”
slide23

Full Executive Summary

  • Two to five pages long
  • The people
  • The opportunity
  • The context
    • Market trends, assumptions, competitors, comparative strengths and differentiators
  • Risk and reward
  • Exit strategies
slide24

The Powerpoint

Ten slides is sufficient

  • Title
  • Problem
  • Solution
  • Business Model
  • Underlying Magic
  • Marketing & sales
  • Competition
  • Your team
  • Financial projections
  • Status & timeline

From “The Art of the Start” by Guy Kawasaki (2004)

slide25

The Business Plan

  • A written document
  • Summarizes the purpose and strategy of your business
  • Provides details on operations, financing, marketing, sales, distribution, management
  • Describes market trends, opportunities, competition
  • Explains your business model
slide26

A Typical Business Plan

  • Executive Summary
  • Business Description
    • Product / service
    • Industry background, trends
    • Company background
    • Goals and milestones, objectives
slide27

An Typical Business Plan

  • Marketing Plan and Strategy
    • Target market and customers
    • Competition and market share
    • Pricing strategy
    • Promotion and distribution
  • Operations and Support
    • Quality targets
    • Technology requirements
    • Service support
slide28

An Typical Business Plan

  • Management Team
    • Experience and expertise
    • Organizational structure
    • Intellectual property rights (know-how)
  • Financial plans and projections
    • Income statement, balance sheet
    • Cash flow statement
    • Break-even analysis
    • Funds needs and sources
slide29

An Typical Business Plan

  • Risks and Opportunities
    • Potential problems, risks and mitigations
    • “Real” expansion opportunities
  • Appendix
    • Detailed support for financial forecasts
    • Timeline and milestones
    • Important background information (e.g. market research)
slide30

A Sound Business Model

  • Generates revenues by selling something to customers
  • Projected to make profits with revenues that exceed the expenses of generating revenue
  • Produces free cash flow by generating cash in excess of working capital and capital expenditures
slide31

A Sound Business Model

  • A concept that “makes meaning”
    • Increases quality of life
    • Rights a wrong
    • Prevents the end of something good
  • A realistic “go to market” strategy
  • Good profit margins
  • Clear path to exit for investors
    • Angels are happy to get cash flow
    • Private equity needs exits
slide32

A valuable opportunity

  • “Me Too” business plans
    • Can be copied
    • Often lead to normal “rents” … tight margins
    • May not be worth the risks
  • Unique, differentiated business plans
    • Barriers to entry (IP, distribution, operations)
    • Not easily copied
    • Higher potential for wealth creation
    • IPO = needs high growth; M&A = make vs buy
slide33

First to market

  • Can be a mixed blessing
    • Sometimes leads to sustained competitive advantage
    • Sometimes leads to higher costs, rougher road, educating the competition
  • Not sufficient as a sole differentiator
    • There’s always someone bigger, better funded out there
    • Competitors and “partners” can be brutal
slide34

Beyond cash … the Network

$ is only part of the equation ...

General Partner

VC Firm

BOD

Advisors

$

&

Mgt

Banks

Search

Portfolio

Companies

Legal

Accounting

slide35
Earn a management fee to pay for the overhead

Net realized gains from liquidity event

Share in the upside after returning original principal of limited partners

Earn a “carried interest” in the portfolio companies

Aligned incentives with portfolio companies and limited partners

Money ?

VC's only win when their companies win

Remember “the 1/3 rule”

slide37
Can they add value in your industry?

Have they been in either an operating or start-up role?

Is the chemistry right?

Do you like the person you will be working with?

What is their track record?

What do their peers think of them?

Do they have the stomach for “early-stage”

Can they lead the next round?

Are your long-term interests aligned?

VC Selection ?

The right VC can make all the difference

slide38

Conclusion

So what does it take to raise venture funding?

Perseverance

slide39
Next Generation Ventures LLC – www.nextgenven.com

Kauffman Foundation – www.emkf.org

Venture Economics – www.ventureeconomics.com

Venture Wire – www.venturewire.com

New England Tech Wire – ww.newenglandtechwire.com

Pricewaterhouse Coopers Money Tree survey – www.pwcmoneytree.com

Wharton Private Equity Boot Camp – http://wep.wharton.upenn.edu/equity/materials.aspx

Useful Links