121005 -8-investorpreztemplate
TRANSCRIPT
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Investor Presentation [Date]
ABC Inc.
A Vision for the Future
Investor Presentation
[Date]
This is a sample template of an
Investor Presentation (IP). If
youre looking for funding, you
should have one, because sooner
or later youll have to make a
presentation.
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Investor Presentation [Date]
The Business and Product
The Market and Competition
Strategy Business Drivers and Risks
Management
Financials Funding Requirements
Overview
Its fairly typical to have a
table of contents page. This
can be done with lots of bellsand whistles to make it look
better, but the basic structure of
the presentation will usually be
something like what is shown
here.
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Investor Presentation [Date]
ABC Inc. provides [service or product] to [customers, marketsegment] helping them to [value proposition which must be betteror cheaper by at least 25%] compared to solutions available today.
Business Proposition
ABC Inc: [What were all about.]
General Rule: Four bullet points
to a page, no more than fourwords to a bullet point. Youll
note we break this rule on every
slide of this presentation.
It is sometimes good to include
summary boxes at the bottom of the
page to summarize the major message
you want to convey on the slide. The
subtext has been put in [ ]s, to give
you a sense of the general message
each page wants to convey.
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Investor Presentation [Date]
Buck Young and three friends decided to form ABC Inc.in 2001 after Buck had a chance to closely assess thewidgets market
Company has gone through an initial angel round of
finance
Company has partly developed patented technology andhad made strides in designing proprietary CRM system
History and Status
Our History and Status: [Weve been working hard andare making progress.]
This is an establishing slide,
just let the audience know a
little bit about the company and
where it stands today.
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Investor Presentation [Date]
Patented widget process
Increases effectiveness by 60%
Decreases cost by 40%
Backward compatible with legacy systems Strong expansion opportunities into additional markets
[X, Y and Z] in the future
The Product
Our Product: [Breakthrough advances with large barriersto entry for competitors.]
VCs want to see that you will
be able to protect your market
advantage in some way to
prevent entry by competitors.
A single product idea may not be the
basis of a sustainable company in the
long-run. If you have other markets that
you can expand into in the future, say so.
Faster, better and / or cheaperby at
least25% to have reasonable a chance
against established competitors.
Emphasize whatthe benefits are here,
and save the 90-slide technical
discussion on how it is accomplished
for later due diligence.
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Investor Presentation [Date]
Forrester says that billions and billions of widgets in our industrywill be sold, and growth will be infiniteforever.
Weve surveyed 20 companies in-depth, which are in our targetmarket. Summary results:
Approx. 120 such companies in our market Company sales revenues from $10-70 million, co.s mostly profitable
Annual widget purchases/co.: $1-12 million, median $3 million
Growth of widget purchases: about 17%/year for last three years
Market in volatile phase currently, due to technology change
Total Market potential: $350 million (based on bottom up analysis)
The Market
Our Market: [Its big enough for youand growing fast.]
Most presentations start with a top down estimate
of the market, generally provided by a respected
source. You want to emphasize basic market
dimensions and growth prospects. Many tech start-
ups stop here, but top down is not enough.
You also have to do a
bottom up marketanalysis, actually doing a
survey of potential clients,
or a thorough
segmentation breakdown.
The bottom up market
will tell you how many
potential clients are
actually relevant to you.
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Typical Customer
Sales of $30 million per year
Spends $3 million/year on widgets
Profit margins low, under pressure to cut costsand widgets are a
major cost item. Purchasing conducted by Purchasing Dept, but only with approval of
Dir. Of Manufacturing. Topic is high priority for CEO.
Supplier relationships reviewed only once a year, in September
New product distributions systems (NokEric) are causing market
volatility Cost will be key factor in determining supplier choice.
Customer Characteristics
Our Target Customer: [Open for a changeto us.]
Many VCs really like to see specific
customer knowledge, not only about
whatthe customer will buy, but who
specifically is the client (CEO, Mfg.
Dir. may not be the same!), and how
the decision is made. Thinking about a
prototypical client can help you
understand the business.
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Investor Presentation [Date]
Ukr-Maf Inc.: Have developed personalized incentiveplan that supports aggressive sales force strategy, butproduct quality is poor.
NokEric Inc.: Have developed 3G-based widget sales
concept, with very high quality, but can only bedelivered through MMS
Competition
Our Competition: [Theyre tough. And nasty.]
You should have a pretty good idea
of your competitors business
models. If they have strengths, it is
OK to say so, because it will also
give insights into their structuralweaknesses. Be dont expect VCs
to believe that your competitors are
total fools, or that they wont react
ever, no matter what you do.
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Investor Presentation [Date]
ABC Inc Strategy:
Focus on Middle Market Customer segment
Avoid dark alleys late at night, but
Provide personalized service
ABC market share: 12%
Projected steady state revenues: $40 million/year
Strategy
Our Strategy: [We deliver something better or cheaper for aspecific market segment.]
Your strategy is your approach
to the market based upon
opportunities, on the one hand,
and the capabilities of your
competitors, on the other. If
youve done your math right,
you should be in a position toestimate your market share, and
thus your revenues.
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Investor Presentation [Date]
Sustaining Competitive Advantage Ukr-Maf will self-destruct due to legal enforcement
NokEric will ignore this market, because $40 million is tablecrumbs for NokEric, but
NokEric will continue to develop MMS-based widget sales, and
will move aggressively on our market with remote sales in2004
Critical Success Factors
Unique, sophisticated CRM system to insure bid at appropriatemoment
R&D Dept. will reduce mfg. costs by 50% to insurecompetitiveness using patented Shrink-O-Widget technology.
Business Model Drivers
Our Model: [No matter what they do, we win.]
Business model
drivers really refer to
features and abilities
that you have thatyour competitors
either cant get or
wont develop because
it doesnt meet their
business model. Ukr-
Maf cant get
respectability;
NokEric wont rework
their systems to servethis market niche.
CSFs are what
you really have to
do well to win inyour target
market. These
are endogenous
factorsthose
under your
control.
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Investor Presentation [Date]
ABC Inc. widgets are ready to ship
Reference customers are thrilled with the beta version
Best widget Ive ever owned CEO, Reference Co., Inc.
Strategic partners ready to promote our widget
We see a huge demand for ABC widgets VP Sales, Big Corp.
Value Added Resellers have been recruited
Advertising & PR plan is in place
Analyst meetings went great Major launch event scheduled at WidgetWorld Expo
Rollout
Rollout: [We can make it from here to there.]
VCs know that products
dont sell themselves, and
want to see that you have a
specific plan for getting yourproduct out to market
effectively and efficiently.
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Investor Presentation [Date]
Slow market uptake
Key man risk: Ukr-Maf retaliation
Failure of key internal initiatives (Shrink-O-Widget)
Nuclear war
Key Risks
Our Key Risks: [Not so bad. Take em or leave em.]
As a rule of thumb, you should never
have more than three key risks, and you
will not usually have less than two.
Thus, if you have 4 or more key risks,
you dont have a dealgo back to
rethink your concept. Incidentally,
there are thousands of minor riskslike
nuclear war. You dont really need toput those in the presentation.
Key risks are residual or
exogenous risksrisks that
you cant eliminate, no matter
what. Therefore, these are the
risks that you are asking toinvestor to take. If he doesnt
like these risks, then the
discussion is over, because there
is nothing you can do about them.
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Investor Presentation [Date]
CEO: Buck Young, 28 Buck has had a middle management job at NokEric, where they think pretty
well of him and hes had a chance to take a close look at the future of thewidgets market. He thinks hes smarter than everyone else, and thereforeexpects a VC to finance his scheme.
CTO: Ben Had, 54
Ben has worked all over the place, most recently at Cistel. Hes a real adultwith kids, salary, mortgage, the works. He worked with Buck a few yearsago, and Buck sure is a sharp kidespecially if he can convince a VC tofinance this project. The ideas great, well, as far as a CTO can tell. Bencarries an ABC business card, but he hasnt quit his job at Cistel yet.
CFO: Guy Big, 48
Guy is a Senior Vice President at Goldman Sachs. Buck met him at a cocktailparty and asked if he could use Guys name as a referencewhich he has.Buck reckons hed be pleased to let Guy know about his proposed positioneven offer him a jobif the VC finances the deal.
Management Team
Our Team: [Experienced. Successful. Up to the job.]
The c
Goldm
VP leavi
outfit is
and thesuspects
other
probably
Big,
somethin
looki
Benw
held a
induscounte
Buck, wh
might
jud
The management team is crucial, and you want to show
a balanced, experienced team with good credentials.
Unfortunately, this is often hard for a start-up to do.
One approach is to assemble a virtual team where
some people are expected to join if offered the job upon
fundingsometimes listed as to be hired.
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Investor Presentation [Date]
Year 1 Year 2 Year 3 Year 4 Year 5
Revenues
Annual Growth -- 14% % % %
Pre-Tax Profits
Pct of Revenues (55)% (8%) 2% 12% 11%
Cash Investment (2.1) (0.9) -- -- --
Financial Highlights
Fin. Performance: [Balanced. Achievable. Pretty appealing.]
You dont need a whole lot of detail
here. The VC is just trying to answer
the following questions: 1) How big
does it get? 2) Does the growth look
manageable? 3) Is the profitability
within norms? 4) How much cash
does it need?
Show as few decimal places as possible. So,
dont show revenues as $12,435 million: 12.4
or even 12 is fine. Same for percents. Growth
of 14.27%--how good a manager are you?
Showing growth as a simple 14% is fine. This
is not an accounting exercise, it is a decision-
making one. Approximations are fine.
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Investor Presentation [Date]
Series A Funding: $3.0M Milestones to be achieved (24 months)
Establish sales for initial product
Sales run-rate of $3.5M by end of 18 months
Profitability by the end of 24 months
Use of funds
Key management hires $400K
Other technical & support staff $500K
Product packaging & COGS $400K
Sales & marketing expense $950K
General operating expense $750K
Funding Needs
Our Funding: [Reasonable to accomplish specific goals.]
Dont forget to
include what the
investment is to be
used for. Be
reasonably specific.
Dont just say to
run the business,
but show that some
thought was put into
determining the
amount being asked
for.
You need to say how
long the money will
last, and what is
expected to be
accomplished during
that period.
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Investor Presentation [Date]
Pre-Money Valuation: $1.5 million
Cash Investment: $3 million
Exit Valuation (Yr 5): $30 million
Proposed Investor Share: 66.7%
Return to Investor (irr): 46%
Cash-on-Cash Return Investor 6.7x
Deal Summary
Investor Performance: [Fair Valuation. Good Returns.]
Not everyone likes to include a deal summary,
because it can contain transaction details which
might properly be the subject of negotiation.
However, some VCs like deal summaries
because it tells them clearly 1) how much cash is
needed and 2) what their expected returns are.
Be careful with the
pre-money valuation.
If its too high, the VC
may think youre
simply unrealistic and
not professional, and
may dismiss you out
of hand. On the otherhand, it is your
opening negotiating
position, so you want
some latitude for later
discussions.
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Investor Presentation [Date]
Questions
ABC Inc.: [Invest in us.]
By Steven Kopits, +1 508 685 1200, [email protected]&
Daryl Scott, Scott Technology Group, Inc.
[email protected], www.ScottTechGroup.com