how to pitch to investors

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How to Pitch to Investors

Frank RimalovskiExecutive Director, Entrepreneurial InstituteManaging Director, Innovation Venture FundMar 4, 2017

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Topicsu When to Pitch

u Role of the Pitch

u Before the Pitch

u Elements of a Good Pitch

u Frank’s Pet peeves

u Q&A

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When to pitch?

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Venture Funding Lifecycle

4

①Discovery

②Validation

③Customer Creation

④Company Building

Test assumptions aboutcustomer needs/problem & develop MVP

SeekValidation that people are interested in your solution

Begins to builddemand & improve efficiency of customer acquisition

Drive growth aggressively & execute business model

Invention & ideation

Grants, Competitions Founders + Credit cards

GrantsCrowdfounding

CustomersSBIR/STTR + Accelerators

Friends & family

Angels Seed funds

Venturecapitalfunds

LeasingFactoring

Vendor financePrivate equityPublic markets

Valuation*

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Role of the pitch?

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Why do we pitch?

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To raise money?

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To sell shares!

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Raise money when you can raise it!Not just when you need it!

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The Other Role of the Pitch

u Investor pitch is a proxy…

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The Other Role of the Pitch

u Investor pitch is a proxy…for your ability to:

o Recruit talent & lead a team

o Sell to customers

o Attract partners

u Tell a story & engage your audience

u Cover the bases…not just your product/tech

u But, it doesn’t stop with your pitch deck

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But, you definitely will not raise money on a bad 1st pitch

You will not raise money solely on a great 1st pitch

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Goal of the pitch is to get another meeting!

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Before the Pitch

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Critical Questions to Answeru When to raise & why now?u How much to raise?u What are you looking for in an investor?u What will you spend the money on?u How long will it last?u What will you accomplish?u What are investors looking for in you?u Why should they invest in you?u How will they make money by investing?u Will you need to raise more? If so, how much &

when? What are those investors looking for?

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If you can’t answer allthose questions, you are not ready to raise!

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Exploratory/feedback meetings (aka customer discovery!)

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Investor Considerationsu Stageu Sector focusu Fund lifecycleu Recent activityu Lead or follow?u Investment paceu Typical check sizeu Potential warm introsu Value added servicesu One & done or follow-on?u Directly competitive portcos

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Information Sources

Crunchbase/CB Insights/

AngelList

Fund Websites/

Blogs

News/MediaMentors/

Coaches/Other Entrepreneurs

Service providers

Entrepreneurial Institute

Team

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Elements of a Good Pitch

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Outline1. Welcome: Your biz thesis; 10-20 secs to engage2. Problem: You solve & who you solve it for (target customer)3. Solution: Your solution with compelling, quantifiable benefits4. Product: Your product, how it works & evidence that it does5. Revenue Model: How you make money6. Market: How much money you could make if you dominate7. Competition: Who they are & why your solution is better8. Cust Acq: How acquire & retain customers, profitably & at scale9. Unit Economics: How much money you make10. Traction: Proof that customers/users love your product11. Team: Experience/expertise to own this opportunity12. Funding: How much, uses, accomplishments & runway13. Summary: Market + Differentiation + Team + Traction

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Welcome

GleamrA m a rke taUber for mobile auto details

“Get an affordable, professional auto detail wherever you are, whenever you want”

Copyright2015Gleamr.CreatedbyPitchDeckCoach.com

On demand

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ProblemProblem 2

Busy consumers lack an easy way to get their car professionally detailed at their home or office

• No single view of currently available detailers• Few reviews to guide selection• Little opportunity to negotiate prices• Visiting a detailer’s shop takes too much time

Mobile auto detailers spend too much time/money finding customers when they would rather be detailing cars

• Spend ~$12K/year on marketing (National Auto Detail Assoc.)


Too broad

• quantify problem/frequency

• quantify downside of “too much time/money”

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SolutionSolution 3

Gleamr iPhone app and website. “Get an affordable, professional auto detail

wherever you are, whenever you want”

SAVETIME

detailers come to their home or office

SAVEMONEY

detailers compete for their business

GREATJOB

detailers work hard for great reviews

CONSUMERS

SAVETIMEless time

chasing customers

MOREMONEY

more timedetailing cars

GROWFASTER

great reviews + great prices = more work

DETAILERS


Show me the Money

Show me the Money

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ProductProduct 4

2. COMPARE REVIEWS & PRICES

1. BROWSE AVAILABLE DETAILERS

3. SELECT, BOOK & PAY

Amazing screenshot

Amazing screenshot

Amazing screenshot

• Option to add tip after job• Review required after job

• Standardized services & prices• Detailer can discount (bid) on

the fly based on demand

• Filter by date/time/availability/ratings/reviews/bid

2 patents pending


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Revenue Model/Unit EconBusiness ModelHow we make money

5

We charge detailers a 15% transaction fee


GleamrJob $75.00Detailer $63.75Gleamr $11.25

Gleamr’s fee is a cost of revenue w/ guaranteed ROIvs. a marketing expense w/ no guaranteed ROI

COGS ?

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MarketMarket Top Down – USA only

7a

$36Billion

TOTAL USAUTO DETAILING

Source: [Some reputable source]

$12Billion

MOBILE US AUTO DETAILING

Source: [Some reputable source]

~$2Billion

GLEAMR MARKET OPP15% transaction fee


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MarketMarket Bottom Up – USA only

7b

US Autos on the Road1 270 Million

Total Detailed @ 33%2 90 Million Total Mobile @ 33%3 30 Million

Mobile Details per Auto per Year 6

Total Mobile Detailed per Year 180 Million

Average Mobile Detail Price4 $75

Total Mobile Detail Sales per Year ~$14 Billion

Gleamr Opp. per Year @ 15% ~$2 Billion

1. [Some reputable source]2. [Some reputable source]3. [Some reputable source]4. [Some reputable source]


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CompetitionCompetition 8

MORE CONVENIENT

LESS CONVENIENT

LESS EXPENSIVEMORE EXPENSIVE

Gleamr

CompetitorLogo

CompetitorLogo

CompetitorLogo

CompetitorLogo

CompetitorLogo

CompetitorLogo


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Customer AcquisitionGrowth Strategy How we will scale our business

9

• Online marketing inc. SEM, SEO, SMM, daily deals

• Refer-a-friend discounts for consumers

• Volume/loyalty discounts for consumers & detailers

• Incentive programs for HR and office managers

• Dedicated customer service reps for each DMA

• Gleamr staffed community message boards for consumers (public) and detailers (login required)

• Consumer Product Advisory Board to drive consumer features

• Detailer Product Advisory Boardto drive detailer

features

• Add Android App

• Add Website

MARKETING& SALES

Acquiring customers

CUSTOMERSERVICE

Keeping customers

PRODUCTDEVELOPMENT

Staying competitive


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TractionTractionDetailers and consumers love our service…

6

Detailers Users Jobs GrossRevenue

GleamrRevenue

LAUNCH0 0 0 $0 $0

June10 100 90 $6,750 $1,013

July50 500 450 $33,750 $5,063

August200 2,000 1,800 $135,000 $20,250

Sep400 4,000 3,600 $270,000 $40,500

Oct800 8,000 7,200 $540,000 $81,000

Nov1,600 16,000 14,400$1,080,000 $162,000

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

1 2 3 4 5 6

RevenuebyMonth

Key Metrics


LTV = 5x CAC

More ofthese

Less ofthese

Nice touch, but unsubstantiated

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Team

JonDoh(Founder/CEO)Co-founder/CEO@ArtFinder(soldtoEbay).Prev.LinkedIn

TrishTaylor (Founder/VPEngineering)Co-founder/VPEng.@ArtFinder(soldtoEbay).Prev.Facebook

BenBrando (VPSales/Marketing)Prev.HubSpot

WillWachon (Advisor)Founder/CEO@SpeedyK(Mobile autodetailing franchise)

SueSmead(Advisor)SVPCorpDev@Ebay

MegMitchum(Advisor)CMO@HubSpot

TBH(Director,CustomerService)

Team 11

Nicetouch

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FundingFunding 12

Bootstrapped by founders thru MVP and first 6 months

Seeking $2M Series A• Target close by EOQ3• $600K committed

So we can• Reach $48M in sales• Scale/refine marketing/customer acquisition• Scale customer service (detailers)• Scale infrastructure


Length of runway ?

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SummarySummary 13


Big Opportunity: First mover in $36B US auto detail market

Strong Team: Deep market/technology/execution experience

Sustainable Technology Advantage: 2 patents pending

Significant Traction: 1,600 detailers, 16,000 users, $162K/mo

Seeking $2M Series to achieve $6M run rate

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The Business Model Canvas

Revenue Streams

Channels

Customer SegmentsValue PropositionsKey ActivitiesKey Partners

Key Resources

Cost Structure

Customer Relationships

Designed by: Date: Version:Designed for:

designed by: Strategyzer AGThe makers of Business Model Generation and Strategyzer

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

strategyzer.com

What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?

is your business moreCost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)Value Driven (focused on value creation, premium value proposition)

sample characteristicsFixed Costs (salaries, rents, utilities)Variable costsEconomies of scaleEconomies of scope

Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?

channel phases1. Awareness

How do we raise awareness about our company’s products and services?2. Evaluation

How do we help customers evaluate our organization’s Value Proposition?3. Purchase

How do we allow customers to purchase specific products and services?4. Delivery

How do we deliver a Value Proposition to customers?5. After sales

How do we provide post-purchase customer support?

For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?

For whom are we creating value?Who are our most important customers?

Mass MarketNiche MarketSegmentedDiversifiedMulti-sided Platform

What type of relationship does each of our Customer Segments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?

examplesPersonal assistanceDedicated Personal AssistanceSelf-ServiceAutomated ServicesCommunitiesCo-creation

What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?

categories ProductionProblem SolvingPlatform/Network

What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?

types of resourcesPhysicalIntellectual (brand patents, copyrights, data)HumanFinancial

Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?

motivations for partnershipsOptimization and economy Reduction of risk and uncertaintyAcquisition of particular resources and activities

What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?

characteristicsNewnessPerformanceCustomization“Getting the Job Done”DesignBrand/StatusPriceCost ReductionRisk ReductionAccessibilityConvenience/Usability

typesAsset saleUsage feeSubscription FeesLending/Renting/LeasingLicensingBrokerage feesAdvertising

fixed pricingList PriceProduct feature dependentCustomer segment dependentVolume dependent

dynamic pricingNegotiation (bargaining)Yield ManagementReal-time-Market

Your Pitch Canvas

Team

Team

Customer Acquisition

Unit Economics

Problem

Revenue Model

Product

Funding

MarketSize

Solution

Funding

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Frank’s Pitch Pet Peeves

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Where are you on the Spectrum?

Accentuatingthe Positive

Stretchingthe TruthExaggerating

Lying &Obfuscating

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Lies Entrepreneurs TellWe’re signing a huge contract next week!

Our round is almost fully subscribed.

We’re in over 500 accounts already!

We’re increasing our top of funnel sales

leads by 10x.

Other investors aren’t asking for this information.

Other angels are already funding.We have 3 patents.

Our CTO is full time.

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“The key to success I know not, buttrying to please everyone, the key to failure is.”

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Useless animations

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Frank’s Pitch Pet Peevesu Off target pitchesu Ideasu Typos/poor grammar/jargon/wordinessu The “big windup”u “No competition”u 100% outsourced developmentu Business plans/Long documentsu Large attachmentsu Secrets & NDAsu Defensivenessu Unresponsivenessu Useless animationsu Slides like this!

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Questions?

[email protected]@nyuentrepreneur

entrepreneur.nyu.edu16 Washington Place

how to pitch to investors

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