Investor Repellers: gli Errori da NON Fare con gli Investitori
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The document outlines a workshop led by Andrea Baldini and Tomaso Rodriguez, focusing on the '10 mistakes to avoid when presenting to investors.' It emphasizes key communication strategies, the importance of metrics, market understanding, valuation, and the necessity of transparency and feedback. The workshop aims to equip startuppers with essential insights to effectively engage potential investors.
Investor Repellers: gli Errori da NON Fare con gli Investitori
- 1. Workshops Investor Repellers “10” mistakes to avoid when you present to investors Andrea Baldini – Tomaso Rodriguez
- 2. WHAT’S THIS? THIS? WHAT’S GONNA HAPPEN? HAPPEN? Short workshop on some things you should (NOT) do when presenting to investors… …with a bit of humor and theatrics… …for all the startuppers out there! FORMAT: MISTAKE RULE Presented to you by Junior Jedi 2
- 4. It’s a story I want to believe in RULE # 0 GOOD COMMUNICATIONS 4
- 5. 5
- 7. What are you going to tell me? RULE # 1 EXECUTIVE SUMMARY 7
- 8. FIRST THINGS FIRST Golden rule: Tell me what you are going to tell me, then tell me, then summarize (= tell me again) 8
- 10. What is it? What is it for? RULE # 2 IT’S THE PRODUCT, STUPID! PRODUCT, STUPID! 10
- 13. Financials will come RULE # 3 BUSINESS MODEL FIRST 13
- 14. BUSINESS MODEL Razor Blade Reverse Razor Blade 14
- 15. SOME EXAMPLES • • • • • • • • • • Advertising Add On Razor Blade Freemium Low Cost Pay as you Go Subscription model Brick & mortar vs Digital Distribution Virtual goods … 15
- 16. BUSINESS CASE • New product/service addressed needs • Breakthrough innovation nearest comparable • Business case: the reasoning for switching from the existing to the new • Always consider: Pros Cons – Laziness of people – Fear of the unknown BE CONVINCING! • ... • … • … • ... • … • … 16
- 18. investors MANAGE risk RULE # 4 SUPPORT WITH METRICS 18
- 19. METRICS • Follow business model and strategy • Financials should reflect them • VCs love measurable things – Make their job easier – Help in proving the value of a concept – Can validate an idea that «sounds good» 19
- 20. METRICS FOR A WEBCO (OLD SCHOOL) • SEM • • • • • CAC • Lead Lifetime Customer Acquisition Cost • Churn Rate • Recurring Sales • • MWA … SEO Retargeting Affiliation LTV Lifetime Value Mob Ads … LTV > CAC ??? 20
- 21. YOUR OWN STRATEGY, YOUR OWN METRICS • «old school» vs. start up VCs don’t like buying user bases • Key: acquire quality users at the lowest cost possible 21
- 22. So you got an idea? That don’t impress me much RULE # 5 EXECUTION 22
- 23. EXECUTION • • • • Idea is NOTHING without execution No plan = No money from an investor Go-to-market plan coherent with strategy Measurable performance 23
- 24. How to segment and identify my segments RULE # 6 FIND THE MARKET BEFORE IT FINDS YOU 24
- 25. THE OLD WAYS • segment = people with the same buying motive • Judging what people will buy based on: – Job – Salary – Level of employment • Largely irrelevant as: – people do not conform to stereotypes – people from all classes and occupations share similar aspirations. © Prof. Paul Fifield http://www.fifield.co.uk/ 25
- 26. THE NEW SCHOOL The best (real) segments comprise people with the same needs & motivations – these change depending on the time, place and event People share the same needs and motivations, not because of who they are, but what brings them together © Prof. Paul Fifield http://www.fifield.co.uk/ 26
- 27. HD AND THEIR BUSINESS DEFINITION © Prof. Paul Fifield http://www.fifield.co.uk/ 27
- 28. IN WHICH BUSINESS ARE YOU IN? “Product led” Company Motor Cycles Watches Electric Motors Electronics Watches Cosmetics Coffee Shops Leather/Luggage Encyclopedias Harley Davidson Swatch B&D Sony Rolex Revlon Starbucks Louis Vuitton Britannica Our Product? Our Company © Prof. Paul Fifield http://www.fifield.co.uk/ “Market led” Big Boys’ Toys Fashion Accessories DIY = Do It Yourself Entertainment Jewelry “Hope” The Third Place The Art of Traveling Parental guilt Our Business 28
- 29. MARKET ≠ ADDRESSABLE MARKET • • • • • • • • Sector / niche Segmentation Geography Distribution Legal constraints Competition Barriers to entry … 29
- 30. Where does taht number come from… RULE # 7 VALUATION 30
- 31. SHOW ME THE MONEY • For VCs and investors valuation comes out of many elements (strategy, focus, market, metrics, biz model, etc., etc., etc.) • Investors are (usually) in for the long term • Market (usually) wins • VCs reason BACKWARDS (exit and dilution) • Incentives needs to be aligned • CAVEAT: be certain to know what you are buying with a certain valuation 31
- 33. We are gonna find it out anyway… RULE # 8 BE TRANSPARENT 33
- 34. SECURITY BY OBSCURITY IS NO GOOD • Be transparent on TEAM, don’t hide missing pieces, be practical • Be transparent on COMPETITORS, which one keeps you awake at night? • Be transparent on LOCK-IN, how you avoid losing ground and user base or customers? • Be transparent on anything, there is going to be a Due Diligence if everything goes well… 34
- 35. Feedback is good, secrets are not RULE # 9 GET CHALLENGED BEFORE PRESENTING 35
- 36. IRIDIUM CASE • 66 low earth orbiting satellites • Allowing subscribers to make phone calls all over the world • Cost of the project over $6 bln • IPOed in June 1997 for $20 / share, in less than one year price increased to $ 72.19 / share • In November 1998 the service was launched 36
- 37. IRIDIUM CASE (cont.) (cont.) • In May 1999 share price was just $ 3.06 • Bankruptcy in August 1999 “We’re a classic MBA case study in how not to introduce a product. First we created a marvelous technological achievement. Then we asked how to make money on it.” Iridium Interim CEO John A. Richardson, August 1999 Source http://lfp-blog.com/how-themighty-fall Hey! Did somebody tell these guys that the product is too bulky??? 37
- 38. LESSONS LEARNED (AT HIGH COST) Always get challenged, feedback is good! DON’T FALL IN LOVE WITH YOUR PRODUCT/IDEA, OR YOU’LL SEE ONLY WHAT YOU WANT TO SEE 38
- 40. One size doesn’t fit all RULE # 10 GET INFO ON VC BEFORE PRESENTING 40
- 41. GET INFO ON VCs BEFORE PRESENTING • VCs will provide «smart» money for your business • But every VC has its own expertise in terms of: – – – – – – Geographies Sectors Network Markets Stages of growth … • Getting financed by a VC is like getting married, you have to choose accurately! 41
- 42. One size doesn’t fit all RULE # 10+ DON’T BE (TOO) BULLISH 42
- 43. THERE ARE NOT MANY GOOGLES AND FACEBOOKS OUT THERE Need of cash € 500 k Planning to sell the company at 15 x EBITDA in 4 years at € 1,2 B 43
- 44. Feature 8 Feature 7 Feature 6 Feature 5 Feature 4 Feature 3 Feature 2 Feature 1 COMPARISONS SHOULD BE FAIR ENOUGH MyProduct 44
- 45. Thank You! You! Investor Repellers “10” mistakes to avoid when you present to investors Andrea Baldini – Tomaso Rodriguez
- 47. Next workshop: Finanziamento VC: capire un term sheet Pierantonio Luceri , Matteo Panfilo 28 giugno 2012 @ StartMiUp Register on EventBrite!
- 48. Q&A
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- 51. EXAMPLE OF BAD EXECUTION • Ben-Gay is a cream to relieve pains very successful in US • When the company decided to launch the Aspirin it was a flop • It was just a naming problem… would you swallow a Ben-Gay? 51