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Nuts and Boltsof
the Executive Summary and the Pitch
Joe Hadzima(MIT S.B., M.S. in Management; J.D. Harvard Law)Senior Lecturer, MIT Sloan School of Management
President and Co-Founder, IPVision, Inc.Founding Judge of MIT $10K/50K/100K Chairman Emeritus MIT Enterprise Forum
2011-2012, Joseph G. Hadzima, Jr. All Rights Reserved Presented at GIST in Jakarta Indonesia April 2012
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Nuts andBolts of
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Summaryand Pitch
Apri l 2012
A Peek Inside the MIT 100K
Judging ProcessWhat Judges Look For:
From the $100K Website:What do the judges look for in a plan? The judges look at many different issues whenevaluating executive summaries and business plans, including:
Is the business opportunity as presented both highly attractive and clearly realistic? Is the business defensible from competitors?
What is the business model?
What comparisons are there to past success stories that indicate this venture will succeed?
What is the amount of up-front capital investment required?
Do the market and financial projections demonstrate that the team understands its business?
How long will it take from the current stage of development to bring this to market?
Can this venture achieve a leadership position in i ts market?
Has the team gone out to the market already to test its ideas?
Who will be the first customer(s)?
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Nuts andBolts of
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Apri l 2012
A Peek Inside the Judging ProcessWhat Judges Look For (continued)
What do the judges look for in a plan? The judges look at many different issues whenevaluating executive summaries and business plans, including:
Is the team of suff icient breadth, balance and quality to make its ideas happen?
Will the ego of the founder(s) get in the way of success?
Is the team focused on its target market?
What is the expected time and amount of pay-off to investors?
Is the reader famil iar with and interested in the given market space?
Is the plan clear and well-written?
Does the team have the necessary communications ski lls to present a compelling story? What roles will the team members play in the venture?
Are the team members dedicated to the venture and their roles in the group?
Does the team have a clear plan for spending the investment money it receives?
Why is this business going to be around and a real world winner in 5 years?
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Summaryand Pitch
Apri l 2012
How Investors Think:
What are the 2 Basic Investor/Human
Emotions that You Have toUnderstand?
FEAR That you wil l lose the money
GREED That they will miss the deal of the
century
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Executive
Summaryand Pitch
Apri l 2012
The Executive Summary
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Nuts andBolts of
Executive
Summaryand Pitch
Apri l 2012
What is an Executive Summary?
It is the First Thing Investors/Judges Read
It is a Resume for your Full Plan
Goal is to get the Interview to Give the Pitch
What Do Judges/Investors Really Look For?
The 3 Whys
Why This?
Why Now? Why This Team?
The 4th Why:
Why Wont This Work/Succeed?
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Summaryand Pitch
Apri l 2012
BUSINESS PLAN BASICS
The Business Plan -A SUPPORTED VISION
Tec
hno
logy
Intellec
tua
l
Property
Marke
t
Ana
lys
is
Compe
titive
Ana
lys
is
Sa
lesan
d
Distribu
tion
Team
Financ
ial
Pro
jec
tions
DetailedSupport/Foundation
Full Business Plan
PowerPoint Presentation
Executive Summary
Elevator Speech
Mission/Vision Statement 1 paragraph30 seconds
2-5 pages
10slides/20minutes/30pt
20-30 pages
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Nuts andBolts of
Executive
Summaryand Pitch
Apri l 2012
The Executive Summary
An Executive Summary is
NOT an introduction NOT a preface
NOT a random collection of highl ights
An Executive Summary IS the BusinessPlan in miniature
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Executive
Summaryand Pitch
Apri l 2012
The Executive Summary
Size
Two pages (preferable) to five pages (max) The Executive Summary must be
Logical
Clear
Interesting/Exciting
The Executive Summary is like a RESUME If it gets the readers attention, the rest getsread
The Elevator Speech is to the Exec Summaryas the Exec Summary is to the Full Plan
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The Executive Summary
The Executive Summary tells What the Market/Opportunity is
How Big Is It or Wil l It Be? Who You Are What your strategy/vision is
What you are doing and/or propose to do How many $$$$ do you need and what will you do
with them What yourSUSTAINABLE COMPETITIVE
ADVANTAGE is
When the reader is finished he or she should be able totell someone what you are up to.
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The Executive Summary
Ideally: The Executive Summary Should
Contain: Description of the Business Concept and theBusiness
The Opportunity and Strategy
The Target Market and Projections The Competitive Advantages The Economics, Profitabili ty and Harvest Potential The Team
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EXECUTIVE SUMMARY: ELECTRONIC COMPONENTS, INC.
Electronic Components, Inc. is a start up company that will make a variety ofelectronic components, beginning with a new type of aluminum-based capacitor.This unique product, coupled with excessive demand for capacitor devices, willprovide us with an ample share of the capacitor market and numerous opportunitiesfor expansion into related electronic components.
The founders are dedicated and determined to make the venture a successfuland profitable entity. Technical expertise is provided by James F. Lynch, who hasbeen involved in designing capacitors for 11 years. He obtained a Bachelor ofScience degree in electronic engineering from the Massachusetts Institute ofTechnology.
Technology for capacitors is changing rapidly. Electronic Components, Inc.has an opportunity to capitalize on a major technological change by getting off to a
quick start and expanding quickly.
This proposal pertains to two additional phases of required financing. Thefirst phase, consisting of about $150,000 for pilot plant start-up, has been completedfrom the personal funds of the principals. The remaining financing is for thefollowing:
Phase Two: Obtain $750,000 capital for: Hiring and training production personnel;
Purchasing additional equipment necessary for appropriateproductivity;
Develop the market;
Complete the sales rep network;
Explore new markets.
Phase Three: Increase Production and Sales
Computerize manufacturing to triple output with minimal increase inlabor;
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EXECUTIVE SUMMARY: PEOPLE EXPRESS
The Eastern seaboard of the United States is ripe for the entry of a new,
superefficient, low-cost air carrier to provide quick, reliable inter-city air
transportation. Such an entity would bring to the Northeast the same benefits that
have accrued to other areas of the United States. Chief among these are:
Frequent jet commuter service between major cit ies
Prices competitive with private automobiles
Fulfil lment of the congressional goals in enacting the Airline Deregulation
Act of 1978 to have better service at lower fares.
The new company will be able to achieve these goals for the following reasons:
Aggressive, innovative management that has been tested in the field andbeen on the leading edge of innovation in air transportation marketingand systems
Equipment and facil ities designed specifically for the low-cost productionof air transportation
Manpower selected, trained, and motivated to be efficient and profitoriented
New systems to be applied to the entire business of air transportation tominimize investment in manpower and machines
All of these, when applied to the new entity, wi ll result in considerable economies
vis--vis existing air carriers.
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Nuts andBolts of
ExecutiveSummaryand Pitch
Apri l 2012
The Pitch
My Thanks to Stephen Pearse For the Inspiration for These Slides
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The Pitch - Getting Money VC Noise
Get Introduced
Memorize Elevator Pitch Forwho are dissatisfied with, is a that provides. Unlike a, we have assembled .*
One Shot
Induce Greed* Geoffrey Moore, Crossing the Chasm
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Nuts andBolts of
ExecutiveSummaryand Pitch
Apri l 2012
The Pitch: KISS *Really* Simple!
Hook Target Audience
Lowest Common Denominator Keep It Short (10slides/20minutes/30ptFont)
Pictures! Answer detail/curveballs quickly
Passion! Engage! Confidence!
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Nuts andBolts of
ExecutiveSummaryand Pitch
Apri l 2012
The Hook Pain or Huge Market Opportunity
7 Seconds Imagine a safe rubber coating that conducts
electricity
Have you ever felt threatened?
Our box is 10x smaller, faster, cheaper
Do you get poor cell phone reception at home orwork?
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Nuts andBolts of
ExecutiveSummaryand Pitch
Apri l 2012
NO Geek Speak WRONG:
Our technology is the first integrated and automatic bookscanner that will scan and digitize bound documents at aspeed of 1,200 PPM at a fraction of the cost of existing
solutions based on a disruptive digital imaging technologyinitially developed at Bell Labs and protected by 12patents.
RIGHT:
We enable sharing knowledge massively by
digitizing physical libraries at a very low cost.
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ExecutiveSummaryand Pitch
Apri l 2012
Focus of Pitch Customer Benefits NOT Tech Benefits
Tech Benefits- **SO WHAT?** Improved Network Utilization
Scalable, Adaptable Secure integration
Seamless Integration
Business Benefits- Pain Reduction!
Increase Revenues by 60%
34% cost reduction in 12 months
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Nuts andBolts of
ExecutiveSummaryand Pitch
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Style Use best presenter
Have egghead in room Give firm answers (or none)
Look at everyone in room Do your homework
Pull Questions
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Apri l 2012
Basic Pitch Anatomy
Hook - Summary (Problem or Opportunity)
Your Solution Business Model Technical Advantage Competition Sales & Marketing Strategy
The Team Financials Road Map
The Offer
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Nuts andBolts of
ExecutiveSummaryand Pitch
Apri l 2012
Slide 1 - Summary
Introduce the project
Why is it important Timeline and key milestones
Expected business & financial results Funding requested (total amount)
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Slide 2 The Business Problem
State the problem in business terms
Business problems: production, cost, competitiveness,product, service, delivery etc
Define the market opportunity
No. buyers in the first 18-24 months, value in sales Name/identify target customers
May be teams company partner or other customers
Why the customers care
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Slide 3 The Solution
How you solve the problem for the customers
perspective
The specific value in your proposition
Specific benefits to the customer (non financial)
Financial benefits (estimates) to the customer
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ExecutiveSummaryand Pitch
Apri l 2012
Slide 4 Business Model
How will money be made or saved? How will the science team earn income?
How will the company team earn income?
What is the margin, profit, or savings?
Is the company-partner the end-user? Manufacturer?Seller?
How will the product/service be delivered to the
customer(s)? Will the product/service be sold through other companies ordirectly to end-users?
Product or service? Sold by contract?
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ExecutiveSummaryand Pitch
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Slide 5 Technical Advantage
State the special or key aspect of technology in
translated into common terms What are the intellectual property plans (if any)? What stage of development is the technology currently in
(again in common terms such as early, mid, late)? How much time and funding is needed to finish the
technology?
THIS IS THE ONLY TECHNOLOGY SLIDE Only the key technology element that relates directly to
the key business advantage matters!
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ExecutiveSummary
and Pitch
Apri l 2012
Slide 6 - Competition
What alternatives exist to your solution?
Including do nothing (low risk, cost estimate) Who else is trying to solve the problem?
Current competitors and substitutes How large/profitable are they?
Are they ahead or behind?
Matrix of features and value
NEVER SAY There is no competition
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Apri l 2012
Slide 7 Sales & Marketing
How will your team (or company partner) reach thecustomer?
How long will each sale take to close (the salescycle)?
What is the role of 3rd
party partners in marketing,distributing, and selling?
Will you sell directly, through others, or both?
How will your team inexpensively inform customers(promotion, advertising)? By word of mouth, call them, advertise (where?, how much
cost?)
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Slide 8 The Team
(Company team) Experience in the industry withcustomers, manufacturers, distributors, retailers
(Science team) Experience in technology field Management and operations
Company team: production, delivery
Science team: project management, technologydevelopment
Sales & marketing experience
Industry partners and resources Outside partners needed
Okay if you dont have them yet; important to state gaps)
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Slide 9 - Financials
Simple budget table for project
Simple budget table for marketing & sales (ifapplicable)
Key metrics People, revenues, gross profit (margin), expenses,
number of customers, average selling price, etc.
When (how fast) will you spend and earnmoney?
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and Pitch
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Slide 10 Road Map
(Where you have been and where you are going)
Accomplishments to date Major accomplishments planned and when
Technology development Business (production, sales, marketing, distribution)
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and Pitch
Apri l 2012
Wrap Up Slide or Statement
Why This Why Now
Why Our Team Thank You
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Nuts andBolts of
ExecutiveSummary
and Pitch
Apri l 2012
SESSION 1: BUSINESS PLAN BASICS
The Business Plan -A SUPPORTED VISION
Tec
hno
logy
Intellec
tual
Property
Marke
t
Ana
lys
is
Compe
titive
Ana
lys
is
Sa
lesan
d
Distribu
tion
Team
Financ
ial
Pro
jec
tions
Full Business Plan
PowerPoint Presentation
Executive Summary
Elevator Speech
Mission Statement 1 paragraph30 seconds
2-5 pages
10-15 minutes
20-30 pages
DetailedSupport/Foundation