Business Plan Pitch

From the Oklahoma Commercialization Model

How To Create a Sellable Business Plan Presentation

2007

i2E, Inc.

Table of Contents
1) 2) 3) 4) 5) 6) 7) 8) 9) Title Slide Market Problem Your Solution Business Model & Sales Market Demand Competition Growth Opportunity Management Team Financial Projections 10) 11) 12) 13) 14) 15) 16) 17) 18) Financial Projections Chart Investment Strategy & Use of Funds Company Milestones Milestones Past & Future Business & Financial Valuation Chart Risk Assessment Liquidity Rules for the Pitch Key Questions to Answer

Resources: The Oklahoma Commercialization Model Angel Capital Education Foundation Tech Coast Angels i2E Team 2007 i2E, Inc.

Title Slide
Share the company history and why you are there. Remember you have little more than one minute for each slide. Use this slide to position the company to the audience.

Key Points to Include:

Company name and corporate graphics. One sentence (four words if possible) describing what the company does (the elevator pitch). Presenter s Presenters name(s) and title(s). title(s)
2007 i2E, Inc.

Market Problem
Clearly communicate the "problem" in the market and lay the foundation for the following slides slides. Provide two examples that will relate to the unfair advantage that your solution has in the next slide.
Key Points to Include:

How do you know that there is a problem or pain in the market? pain Explain your knowledge of the market needs. What is the problem costing the market? This ill ll Thi will allow you to set up ROI for you solution f l i in the next slide.
2007 i2E, Inc.

Your Solution
Ease the pain. Describe the essence of y p your p product or technology and how it solves the current problem in the marketplace.

Key Points to Include:

Summarize your solution emphasizing the uniqueness of your product or technology. Position your solution within the customers needs What is the problem costing the market? Outline the ROI for the customers and the time it takes to recoup their investment. The protection on your product or solution.
2007 i2E, Inc.

Business Model and Sales

Describe how the product which solves the market problem generates revenue for the business. The more simplistic the business model the better.

Key Points to Include:

Demonstrate how you generate revenue. Describe how you reach initial customers.

2007

i2E, Inc.

Market Demand
Communicate why someone would want to pay for your solution. The market demand should be communicated i a l ti Th k td d h ld b i t d in quantifiable and verifiable manner.

Key Points to Include:

Quantify the estimated market size including customers and potential sales and segments. p g Identify the key attributes of the target customers. Quantify the number of prospective customers. Explain the market growth including size of growth and why its growing.
2007 i2E, Inc.

Competition
Use a comparison guide of competitors. Its key to include the large competitors as well as the smaller innovative companies in the market.

Key Points to Include:

Describe your strongest barriers to competition including you knowledge o large co pet to s a d c ud g your o edge of a ge competitors and smaller innovative companies. Identify what it will take to get customers to g y g y change what they are using today. Dont underestimate or forget to mention the better funded and better known competitors.
2007 i2E, Inc.

Growth Opportunity
Use your research and knowledge of the market to illustrate the nature of the market growth. Is it in decline, stable or growing?
Key Points to Include:

Define the characteristics of the key segments of the broad market. Illustrate through research that the market is growing. growing Show the urgency of the product or service need. Demonstrate the company growth potential after initial launch launch. Specify what is needed to achieve positive cash flow. 2007 i2E, Inc.

Management Team
Utilize concise bullet points to describe the key experience of the management team. Experience in target market, growing sales, building teams and managing capital are a must.
Key Points to Include:

CEO: Prior entrepreneurial experience and/or years in similar business or market market. CTO or CMO: Track record in core product or technology area, knowledge of the target markets and relationships with industry. CFO: Prior experience including with acquisitions and other exit events. Others to include: BOD and BOA highlighting their strategic value. t t i l Be sure to include who is full-time and part-time.
2007 i2E, Inc.

Financial Projections
Focus on the bottom line, amount of capital needed to reach break even and profitability. Project realistic revenues profitability revenues. Your projections must be based on the assumptions g generated from the market study and analysis. y y

Key Points You Must Be Able to Explain:

Immediate market adoption and penetration. Dramatic or h k stick growth. D ti hockey ti k th Margins beyond the norm. Long periods of negative cash flow.

2007

i2E, Inc.

Latest Actual Financials Projected Year 1 Projected Year 2 Projected Year 3 Projected Year 4 Projected Year 5

Revenues

128

1,200

5,400

13,600

24,300

36,000

Cost of Goods Sold

82

650

2,200

5,200

9,100

13,300

Gross Profit

46

550

3,200

8,400

15,200

22,700

Gross Profit %

35.9%

45.8%

59.3%

61.8%

62.6%

63.1%

Operations/G&A

151

540

1,780

3,600

6,300

8,100

Income/Loss bef. Tax

(105)

10

1,420 1 420

4,800 4 800

8,900 8 900

14,600 14 600

Inc./Loss bef. Tax %

-82.0%

0.8%

26.3%

35.3%

36.6%

40.6%

Be prepared to explain logic and justification of the projected numbers and margins. Be prepared to explain unit costs, sales costs, and G & A costs.

Investment Strategy and Uses of Funds

Outline the amounts of capital needed to achieve profitability. Refer to the Capital Lifecycle and split your capital needs into the appropriate rounds with k milestones to b completed. h i d i h key il be l d Simply outline how you plan to use the raised capital. Use of funds should focus on revenue generating activities revenue-generating activities.

Key Points to Explain:

Include a Capitalization Table. Identify th Id tif the major uses of funds for each round j ff d f h d prior to acquisition or alternative exit scenario. Identify current burn rate. i2E managed funds and sources of capital invest in pre-money valuation ranges of $1M-$3M.
2007 i2E, Inc.

Provide Funding Amounts Sought and Valuation information Similar to this:

Amount of Pre-Money Valuation Funding Sought Post-Money Valuation Founders Seed Round Investors VC Round 1 Investors VC Round 2 Investors VC Round 3 Investors

Seed Round

1,250,000

500,000

1,750,000

1,250,000 71.4%

500,000 28.6%

VC Round 1

3,000,000

1,500,000

4,500,000

2,142,857 47.6%

857,143 19.0%

1,500,000 33.3%

VC Round 2

4,500,000 , ,

2,000,000 , ,

6,500,000 , ,

2,142,857 , , 33.0%

857,143 , 13.2%

1,500,000 , , 23.1%

2,000,000 , , 30.8%

VC Round 3

Identify the major uses of funds at each round. Describe the size and composition of your current "burn-rate". burn rate . Oklahoma Seed Capital Fund's target for investing is a pre-money valuation of $1.0MM to $3.0MM. Expect tough questioning in proportion to any valuation, particularly if it exceeds this range.

Company Milestones
Its important to provide a milestone chart that illustrates past and future business and financial accomplishments. p The chart should directly relate to the use of funds and the investment strategy material.

Key Points to Include:

Company formation. Technology or product achievements. Past and future rounds of capital. Break-even and cash flow. Exit.
2007 i2E, Inc.

Mar - July

July - Dec

July - Dec

Mar - July

Mar - July

Provide a milestone chart similar to the one below, and describe the use of the funds:

Company Formed $250K Proof-of-concept Product Prototype $400K Seed Round Field tests $500K Angel Round 1st Production Ship Positive Cash Flow $2M VC Round 50M Annualized Revenue IPO/Acquisition

July - Dec

July - Dec

Mar - July

Jan - Mar

Jan - Mar

Jan - Mar

Jan - Mar

Milestones- Past and Future Business and Financial

2006

2007

2008

2009

Risk Assessment
Its important to analyze your business opportunity with respect to the key areas of risk and share the assessment with potential investors investors. Include the areas of risk that keep you troubled and segment them with respect to product, market, business, finance and execution risk.
Key Points to Include:

Be open and candid. Sales-Cycle or adoption rate. Cash-flows. Personnel. Competition. Costs.
2007 i2E, Inc.

Liquidity
There are two primary positive options for an exit or liquidity event, an IPO or an acquisition. Its important to understand and relay the specifics of each and include the value proposition for the investors in your analysis.
Key Points to Include:

Acquisition

Identify at least two of the most likely buyers and why they y y y y y would be interested. Describe recent comparable transactions and value. List any relationships that are currently in place with potential acquirers. acquirers Provide recent examples of successful comparable g offerings. Be prepared to explain why your opportunity will be an IPO candidate in several years.
2007 i2E, Inc.

IPO

Rules for the Pitch

Allow a reference to arrange the meeting. Show up early and only bring key personnel. Be prepared to answer questions. Business attire only, no flip-flops. Be enthusiastic but not annoying. y g Use appropriate social skills, no off-color jokes. Practice your presentation skills, limit use of "um. Be knowledgeable of the subject presented. B k l d bl f th bj t t d Be open to audience recommendations. Target the right audience: partners, angels and VC's. Use simple pictures, graphics and avoid extremely abbreviated text. Don't read to the audience. Use 4 bullets per page and 4 words per bullet page, bullet. Let the audience know how your business makes money.
2007 i2E, Inc.

Key Questions You Should Be Prepared to Answer

What problem does your company solve? What is the market potential for your company's product or service? What makes your business different or unique? Who is the target user of the product or service offering? Why would someone purchase your product or service? Who are your competitors? What gives your company a competitive advantage? Does your company have p p y p y proprietary intellectual p p y y property? How do you plan to acquire and keep customers? What are the primary risks facing your business opportunity? When ill h Wh will the company reach break even? hb k ? What are the exit scenarios for the founders and investors? What is the planned Use of Funds"? What is it about your management team that makes it uniquely capable of executing on this business plan?
2007 i2E, Inc.

Commercialization Specialists
Contact one of these individuals for assistance in creating y g your business p plan p pitch.
Name
John Campbell Tom Francis Richard Gajan James Randall Jim Rogers David Thomison Tom Walker

Email
jcampbell@i2E.org tfrancis@i2E.org rgajan@i2E.org rgajan@i2E org jrandall@i2E.org jrogers@i2E.org dthomison@i2E.org twalker@i2E.org

2007

i2E, Inc.