Whats their personality like? Fully revised and expanded for the first time in a decade, this is Guy Kawasaki's classic, bestselling guide to launching and making your new product, service, or idea a success. And Spoke had more comprehensive data because they were uploading entire address books. But in the early days, you want to use analogies to successful outcomes to describe what your company is and what its potential could be. Most technology revolutions are founded on one or two simple concepts. Do they belong to an angel investment network, or are they an individual investor? We only used inLeads as a brand in this deck. Growing your professional network should always be your goal as a founder. Our elevator pitch deck template lets you explain your business concept to prospective clients and investors in a simple way. Every time you raise a round, you should be thinking about the next round. It was hard for me to do as someone who previously lived out of old t-shirts and basketball shorts. In startup land, youre running across a minefield, so the details matter and you have to be careful with your analogies as you conceive strategy. Before we detail our revenue plans, we remind investors why the value of the network created good businesses across eBay, PayPal, and Google our previous examples of network-enabled 2.0 businesses. 2. Show your product rather than saying you intend to build a best-of-breed product. When youre pitching to investors, you need to provide solid data. The valuation analysis component is generally the most important piece of information for a company that is seeking to pursue an M&A transaction. how entrepreneurs should approach the pitch process, the consumer internet landscape in 2004 vs. today. As LinkedIn grew, so did our competitive edge, as more and more members invested activity and data into our network. Just put in a little extra effort. For example, it is unrealistic to assume that a New Manager with a small fund will do cross border deals that require complex legal management. You can reference check a wide variety of professionals including domain experts and service providers both before and after you meet them. Are their questions the same questions that keep you up at night? Avoid debating the validity of your analogies. Paying monthly makes it easy to cancel, but the user ends up paying more than they would had they bought a 1 year subscription up front. Brands who effectively use storytelling in their marketing consistently outperform those who dont, sometimes by up to 64%! The problem we chose for this example was fraud. At the minimum, you should be able to answer: And, if theyve done an interview outlining exactly what theyd like to hearlike Jason Calacanis has, you should probably listen to that, too. The first product we launched was job listings, then subscriptions which was called Network Plus. Learn how you can improve your own elevator pitch and find the best example for accomplishing this task. The Guide for Women Entrepreneurs shares important tips for women in business generally and highlights items that are important for balance during the entrepreneurial journey. Show, dont tell. Dont just say that you have five different options. VCs also write investment memos of their own, so doing the work for them is a way to incept your vision of the memo into their brains. Thats foolish and a recipe for bankruptcy. He advises founders to include market statistics early in the presentation to hook investors right away. Smart venture capitalists saw that we had interesting comparables, but didnt spend much time on this slide. My friend Mike tried this experiment, too. Put yourself in their shoes. After showing what the market is and what you can do, now you can show the people who can make it happen the key leaders of the team. Found inside Page iThis book will show you how to create a successful startup through developing an innovative product. TAM slides quote people who have incentives for artificial inflation, so entrepreneurs risk demonstrating that they have no real sense of how to take dominance of the market. To show potential revenue streams, we listed three products: ads, listings, and subscriptions. Thats okay because you dont need everyone to believe it; you only need the right people to believe it. Konstantin showed startup experience and an understanding of product-market fit. Found insideThis book will help a new generation of leaders capture the same magic. Normally, youd expect us to explain our product i.e., what professional people search 2.0 is. You dont pay for PayPals fraud system, but the fraud system enables those transactions to go through or not and to be profitable. Our underlying argument was that the network enables revenue. Above is a mockup of how InLeads, a product that wasnt built yet, could work. Just no videos. Friendsters valuation set the tone for the entire social networking space. Its unfortunate that our society is so concerned with appearance over substance, but the evidence doesnt lie. Designing the subscription product this way created more value for our members, which made the network itself more valuable. Its no secret that storytelling sells. If you have a good analogy, use it. We are the market leader in establishing the network. After your speech, make sure to connect with the person listening. Investors see a lot of pitches. Make clarity is the number one priority. Make them confident in their decision by making data a key part of your pitch. KISSmetricshas three pricing tiers that users can pay for monthly or annually. Its all managed through their dashboard on HelloBar.com with a drag and drop editor. With the revenue question out of the way, we were ready to explain our product. This guide shows you step-by-step how to build comparable company analysis ("Comps") and includes a free template and many examples. Instead, open with the investment thesis. The Series C had to be a data pitch that showed either how we could get to profitability or that we were profitable. Whats more, the sales and marketing costs of acquiring listings are expensive. Hey, I'm Neil Patel. Try to do a live demo every time, for example, if you have drones, show them the drones in the parking lot. But this was a weak effort. Sadly, many investors actually add negative value, so an investor who adds no value (dumb money) but who doesnt interfere with the operational process can sometimes be a decent outcome. Instead of merely saying that we knew product-market fit is key, we wanted to show that we did the work. Pitch by analogy but dont necessarily reason by analogy. Surprisingly, there are still few people who understand virality. The beginning is when you have the most attention, and the end is when you should return to the most fundamental topic to discuss with your investors. Your plan should include these key components: This person may change over time, but you should name the person who will take over as CEO from you. In our first slide, we answer three questions: Although we knew that the recruiting space would be our initial business opportunity, we believed then and know now that LinkedIn is more than just a recruiting business. We used quotes as evidence of product-market fit, showing that there were people who would actually use the value propositions of our network-based listings. eBay has a network. As a result, we knew that our pitch would need to steer into investors biggest concern: the lack of revenue. The people youre pitching to have their own success stories. CFI's Financial Modeling and Valuation Analyst (FMVA) certification will help you gain the confidence you need in your finance career. In old-school resume databases, most talented professionals didnt want or need to participate. A pitch deck that you use for in-person public speaking and an investor deck that you send by email are very different. An understanding of product-market fit? I hope you enjoy reading this blog post. However, show some maneuverability. When Im being pitched as an investor and I see such qualifiers, I make sure to ask questions about those areas because I know the entrepreneur is most nervous about them. Subscriptions became the product with the highest dollar volume faster than expected. And the hardest part is establishing the network which then has network effects as a platform for valuable businesses. One common mistake is putting the team slide early in the deck. That almost never happens with Series A projections. The CFI Investment Banking Pitchbook template is free and available for anyone to download. Your first slide should articulate the investment thesis in generally 3 to 8 bullet points. Found insideFilled with Kupor's firsthand experiences, insider advice, and practical takeaways, Secrets of Sand Hill Road is the guide every entrepreneur needs to turn their startup into the next unicorn. In concept pitches, youre selling a story, so naturally there will be people who dont believe that story. Its a presentation that covers critical company information and metrics, hoping to get investors interested in funding a company, product, or project. We want to create that works for you business size You cant just sign on the dotted line, toss over the keys, and say, Shes all yours now!. Again, because this pitch is a concept pitch, we wanted to convince investors to bet on our future. It has many stylistic errors and a few substantive ones, too that I would now change having learned more, but I realized that it still provides useful insights for entrepreneurs and startup participants outside of the Greylock network, particularly across three areas of interest: In 2004, the consumer internet was just beginning to rebound. Keep your slides focused on numbers, and use your presentation time to verbally explain your story and value proposition. Anyone who comes to pitch on Shark Tank should read this book first! Barbara Corcoran, ABC's Shark Tank I have seen literally thousands of companies trying to raise capital and know that a great pitch deck is critical. Every presentation must be tailored to its specific audience. Today, networks underlie the information reputation systems of many consumer internet companies, including LinkedIn, Facebook, and Twitter. One of the three major valuation methodologies employed by investment bankers is trading comparables analysis. It takes time to teach your protegethe ropes. So, I created Hello Bar. Good sources to find out about angel investors are AngelList, Flashfunders, and SeedInvest. Its always better to have less slides, but its much more important to have a great deck. Example: www.neilpatel.com. It must be a page turner that hooks and holds a potential investor. Garrett Suttons Writing Winning Business Plans is THE book for key strategies on preparing winning plans for both business and real estate ventures. You can also look for angel networks that focus on the region you live in. As a platform for changing the world of work and enabling individuals, jobs is one important application built upon LinkedIns professional network but its not the only one. I had no idea that the expression, Clothes make the man was so true. Show that youre paying attention to the market. Which kind you are pitching? I wanted to be able to go into my Series B presentation and say, Heres what I said before, and heres how I did. Because we beat our Series A expectations for network growth, investors could comfortably trust our promise to build revenue with our Series B financing. What's your yearly revenue? Save my name, email, and website in this browser for the next time I comment. Again, your pitching goals are to increase investors confidence in your investment thesis and lead them to a shared view of your companys problems. We were underpromising and overdelivered, ultimately giving paid accounts visibility of the entire network. Neither is a particularly good backdrop for trying to raise capital, because. Its one of the most important thingsthey want to know. Found insideThis book is based on content from the OnStartups.com blog. The story behind how the blog got started is sort of interestingbut before I tell you that story, itll help to understand my earlier story. If you want my team to just do your marketing for you, How to Pitch an Idea to Investors With Total Confidence, You're moments away from growing your traffic, We want to create a plan that works within your budget, We want to create that works for you business size. For the first 500,000 or so members, the value of the network is zero. Take feedback and refine your pitch. Facebook, by comparison, offers no paid products and is almost 100% supported by ads. At the highest level, any company in any industry will want to pursue a transaction in order, IB Pitchbook - Corporate Finance Activity, When performing an industry analysis for pitching a strategic recommendation, it is important to perform an analysis of precedent corporate finance activity of major industry competitors to determine the type of transaction that may be, IB Pitchbook - Historical Share Price Performance, By analyzing a companys historical share price performance, we can visualize the catalysts that have moved its valuation over time, and recommend transactions that will be perceived positively by the market. Yes, seed investors understand that early stage companies have many unknowns and the idea will change a lot, so they look carefully at the people to see whether the team will be able to adapt. Talk to your network to evaluate your ideas and evaluate your pitch. Investors therefore evaluate your company based on the data. What model/criteria/triggers do they use to judge whether a project will be successful or not? Instead, our strategy was to steer immediately into the revenue question because that was the top concern of investors in 2004. When you know who will be stepping in to fill senior roles, you know who youll need to hire next: people for the roles that were just vacated! Frequently, young entrepreneurs put in slides that show their business total addressable market (TAM) to establish some credibility. First, we looked at goods listings. First, understand your audience. Our overdelivery against our Series A predictions provided strong evidence to new investors that we could execute against our plan. Then, in our talking points, we would highlight some of the other businesses we can transform with our platform. There are many ways to calculate the value of a startup, some of them more controversial than others. Because we had zero revenue at the time of the pitch, it was especially important for us to give our investors confidence that our team would execute. I totaled up everything I earned from my new appearance and my initial $160k investment paid off in a big way. We showed investors a multi-year track record of data. He bought a Lamborghini. You have the most attention from investors in the first 60 seconds of your pitch, so how you begin is incredibly important. While this is geared toward consumers rather than another business, its a great example of how you can write a pitch that resonates with your prospects while offering plenty of information about what you do. A mockup is better than nothing because it increases investors confidence by showing that youre thinking concretely about the product and allows them to evaluate your plan. Found inside Page 321For example, many angel investor networks have monthly meetings to hear pitches and to pool their investments (see Chapter 19: Securing Angel Capital and He is the co-founder of NP Digital. It walks you through how to: Determine your target customers Identify underserved customer needs Create a winning product strategy Decide on your Minimum Viable Product (MVP) Design your MVP prototype Test your MVP with customers Iterate One ingredient this pitch lacks, which I now think is essential to modern pitches, is our risk factors. After posting this picture of himself on social media, Mike received 107 messages from business owners wanting his help. Planning your business future isnt like selling a car. The method is similar to the comparable, When valuing a company as a going concern there are three main valuation methods used: DCF analysis, comparable companies, and precedent transactions, This financial modeling guide covers Excel tips and best practices on assumptions, drivers, forecasting, linking the three statements, DCF analysis, more. When I was pitching SocialNet (my first startup company which was a dating service similar to Match.com), what I heard from numerous investors was this concern: If someone uses SocialNet to find a partner and succeeds, then theyre no longer a customer, which means you intrinsically have a massive churn problem. As it turns out, that signal was absolutely right. Have you pitched an idea to investors before? Given that Sequoia Capital is a top-tier VC, we gave Sequoia prominent placement (including their logo) on this slide. It looks really simple. Your differential product? The Company Overview section of the Investment Banking Pitchbook template includes: The Industry Overview section of the Pitchbook template includes: The Valuation section of the Investment Banking deck includes: The Transaction Opportunities section of the Investment Banking Pitchbook template includes: The Team Overview section of the Pitch deck template includes: The pitchbook is mean to be used as an example to build on. Know more about the document by looking at our Free 14+ Investment Memo Examples in PDF, Microsoft Word, Google Docs, and Apple Pages file formats! While they worried their early offer would be shopped, sometimes firms end up getting the deal that way, or sometimes they get to participate in the deal because of their early offer. To continue learning and advancing your career, these additional resources will be helpful: Become a certified Financial Modeling and Valuation Analyst(FMVA)Become a Certified Financial Modeling & Valuation Analyst (FMVA)CFI's Financial Modeling and Valuation Analyst (FMVA) certification will help you gain the confidence you need in your finance career. In fact, the most fundamental strategy is the financing strategy. Pay attention to whether they are being constructive during the financing process. 15. The key to a successful pitch is to be brief while still telling an engaging story about your company. Ad-based revenue models make the app free to use for consumers by displaying ads on it. No matter the outcome of your pitch, whether you receive funding, another meeting, or rejection, look for areas to improve. For many startups, not getting funding is a death sentence. Entrepreneurs often say they have no competition, assuming thats an impressive claim. And why is it new? Investor Dave Anderson says it dependson how much help the company needs. Neil is a New York Times bestselling author and was recognized as a top 100 entrepreneur under the age of 30 by President Obama and atop 100 entrepreneur under the age of 35 bythe United Nations. Tailor your pitch to be about how you can help them expand their success, whether thats financially or in a humanitarian way. This adds an additional revenue stream for the company. Another interesting example is a special committee investor presentation made to Dell shareholders prepare by JP Morgan and Evercore Partners. Adding a network to online classifieds made it valuable. Plus, it goes in both directions employees can reference check prospective managers, and managers can reference check prospective employees. 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