Looking for funding? Here is my presentation template in 15 slides

February 2, 2011 1 Comment

Raising funds is something that most startup hates doing – being very difficult (and sometimes next to impossible) as the primary reason. While not easy, getting investors on board is not as hard as you might expect. That is of course if you have taken the time to build the right business plan and have taken the time to sell your story. There are three basic rules that will make a round of funding happen. To begin is there a market (and a problem) that is big enough to invest into? Second question is do you have the right solution to that specific problem? Finally, to you have what it takes to succeed? Investors want to put their money into things that have a shot of succeeding. For any business plan they read or presentation they see, this is basically what they are trying to answer. If you succeed, you will get the funding you need. Missing anything and the road to money will be long and painful… Here is my top 15 slides that I believe need to be in any investor presentations:

Company Overview: make it short; explain where you come from and how you got to this point. What kind of experience do you have? Who are the key people in your team?

Distinctive Competences: Take a few moments to explain what makes you unique. What do you have or do that other companies would not or cannot do? This is extremely important. If you are just a “me too”, what confidence can I have that you are the right horse to bet on.

Market Problems: What are the problems that the industries you are serving have? How painful is that pain for them? Make sure to show that you are addressing a real pain, not just a nice to have.

Market Sizing: How big is that market opportunity? How many customers are there? How much would they be willing to spend? Try to have 3rd party references such as industry research and market analysis to support your hypothesis.

Solution to the problem: What kind of solution is needed to fix this problem? How complex this is? Will it take a few years or a decade in order to get there? This is as much as product agnostic as it needs to be. Focus on the solution rather than what you product does as of today.

Target Customers: The market is large and that is very good but you still need to focus. What will be the types of customers you will be targeting first? Types of customers can define this but having samples of customer names is always good.

Your product line: Ok now it’s time to put things into perspective. What is the solution you have (or plan to have) that matches best the market problems and the needs of the customers?

Product roadmap: You need to show that you know what to do for years to come. How can you demonstrate that what you have in your plans will align with the evolution of your target market?

Go to market strategy: How will you get your customers to notice you? What is your plan to get the meetings you need and the volume of business required to be financially viable? And please be specific. Just saying that you will use SEO, Adwords, Social Media and mailing list does not cut it …

Competitive landscape: Whom are you competing with? This can be a direct competitor to your products and solutions but this can also be the customers themselves (in-house development, status quo). How will you position yourself in order to have a competitive advantage?

Revenue Model: What is the pricing for your solution? Do you have plans for recurring revenues? Will you have a reseller channel? How will you monetize your web service? Sometimes a simple illustration can help visualize the flow of money and how it gets to you…

Financial Projections: How much money will you make in the coming years? How much will it cost you to get to profitability? What is the breakdown of spending per category (R&D, S&M, G&A)? Keep it simple but show numbers that fit within metrics found in your industry. For example, if you nearest competitor is running at 15% profit margins, don’t show margins at 40% (unless you have a major compelling reason that shows why you will be so different).

Exit strategy: This is not as much about selling the business as what will be the triggers that will allow the investors to get a return on their investment in the next foreseeable future.

Funds needed: How much do you need and what will you do with it? There is no problem is asking for more, just make sure that you can demonstrate how the proceeds will be spent. Money invested needs to be used to create value, not to sit in a bank account for 3 years.

Summary: Time to wrap up; this is your last chance to make a lasting first impression. What are the key take away points you want to investor to remember; no matter if they will be investing or not. People talk and you want to make sure you leave them with the right message.

I hope this will give startups looking for funding some insights into the key points that investors are looking for. Of course, I might have made it sound easier than it really is. If you need some help or just want to get some feedback, drop me a line and I would be more than happy to assist you in making a killer presentation that will help you get the funding you need.

Filed under Business Principles, Finance, General Tagged with , , , , , , , , , , , , , , , , , ,

When the fear of dilution (or desire to keep control) makes you a failure

January 30, 2011 2 Comments

Over the past two years, I have seen a numerous number of business plans, new startups and startups that have been startups for too many years. It is always surprising the see so many entrepreneurs concerned about majority control and the fear of being diluted in an upcoming round of funding. I actually believe that too many of them end up dying or selling too early for lack of proper financial support; mostly driven by this fear.

You lose control the second you need money – no matter how much

If you want to make sure you never lose control, you better have a business that never needs any form of bank loan or third party investment. No matter how little you need, you will virtually lose control of the business. Maybe not on paper, but as soon as your business will be in trouble, you will have to deal with your banker or group of investors. You want absolute control? You should never ask for money. Then again, your business better be highly profitable and cash strong to handle your growth, otherwise you will inevitably run out of money.

Keeping control, no matter how much you own

Instead of focusing on your ownership of the business and who has majority control of the business, concentrate your efforts in building a realistic business plan and spend your time on making it happen. No investors want to change a winning combination (well unless you have a serious personality clash with them – and that’s a whole other discussion). If your business is hitting the key milestones and is providing the value/ROI your investors are looking for, then you will be in charge and your Board and shareholders will let you do your job.

When was a very successful business been ever over capitalized?

It is funny to see so many discussions about the valuation of Facebook, Twitter, Groupon and other companies lately. People are spending all their time wondering about what valuation multiples are being applied. The resulting effect is very much like the dot com bubble where people worry about valuation (and ultimately the dilution that would occur for a round of funding). Startups worry too much about what they are worth instead of looking at how much they really need for run the business. Focus on the money you can get and what it will give you. At the end, I don’t recall a company where the executive team does not get properly rewarded upon being highly successful.

Get as much money as you can and make your business grow

Entrepreneurs should not think about how little they need in order to un-dilute themselves. Think instead of what that extra million dollars would allow you to do. Could you accelerate your product development? Could you expand faster in international markets? Could you acquire other business that complements your solution? Again, I am more curious to see what Facebook will do with the latest 1.5B$ of funding. The game is about building a long term sustainable and growing business. No matter how much we talk about the price of gas, you would never drive for a long distance without doing a proper fill up of your gas tank. Who is in sane mind drives a car and fills up for a few gallons/liters every couple of miles/kilometers? Getting funding should not be different.

So if you are thinking about raising more funds, focus on creating value, don’t think about the valuation, how much you are getting diluted (well, just make sure you are not getting screwed…) and build the right plan to wisely spend that money. If you are truly successful as your business plan says, there will be plenty of money (and ROI) for everyone …

Filed under Business Principles, Finance, General Tagged with , , , , , , , , ,

New year’s resolution: under promise and over deliver

December 30, 2010 Leave a comment

As we are about to begin a new year, most of us get in the habit of making resolutions; things we want to achieve in the coming year, things to stop doing, or simply things that will make us a better person. It is usually a process that makes us highly optimistic where many of these resolutions will never happen and most of them rapidly forgotten only a few weeks later. So my suggestion as you make you list is quite simple: under promise and over deliver.

No matter what you pick, set yourself for success with simple goals and objectives; milestones you have a high degree of chances of achieving. Be realistic. If all of us pick items that can be done, it will be a fantastic year. You want to achieve a million dollar revenue year? Aim slightly lower but make sure you will deliver above expectation. You might still get the million dollar mark but if it comes as an over achievement, it will be even more rewarding.

In reality, under promising and over delivering should be all our first resolution; then any other ones you pick will be gravy on top. :-)

With that in mind, I want to wish all my readers a great 2011, enjoy the rest of the holidays and if you are drinking, do it in style with a fantastic bottle of wine …

Michel

 

Filed under Business Principles, General Tagged with , , , , , , , , , , ,

The target customer

December 20, 2010 Leave a comment

It’s a lot easier to build great technology than it is to properly identify your target customer and ideal market. Sure you may have found a market that has great potential. Once deployed, your solution will have a significant impact on the industry – or will it?

Who has the pain?

Before getting a chance of successfully selling a product, you need to have a very good idea of the target customer. This is the person that has the pain (or the need) that your product will solve (or satisfy). If there is not a well defined pain or need, there is limited chance that your solution has value; besides selling to a few people. Of course, the greater the pain, the bigger (and value) is the market opportunity.

Who has the money?

Without revenue, there is no business. One common problem of a lot of startups is a lack of strategy around getting money out of the hands of your customer (a.k.a. monetization). You need to draft a path from where the money will come from. The simplest form is the customer giving you a fat check. The more challenging one is indirectly making money from sponsors, adverts – that is if you have the right kind of volume.

When is your solution needed?

Even after finding a market and how you will monetize, you still need to know about time to market. As an example, tablet PC that came out 8 years ago are obviously not as popular as today’s iPad … It is so important to have a clear understanding on when the critical mass of your customers will be ready to buy your product. It is always better to delay than to simply burn money on a market that is yet not ready to purchase.

Are you too close to the problem?

While you may have been thinking about these things for a while, it is sometimes beneficial to have a little distance or fresh eyes in order to find the right answers. This is where someone like me comes in. You might be surprised on the outcome if you were to consider asking the advice of someone that has many years in developing product plans and go to market strategies. And while such consulting services are not cheap, there are certainly a lot less money than to ship a product to the wrong target customers or at a bad time to market; or even worse to have forgotten how to monetize. Sales and marketing activities are many folds more expensive than product planning and building the right kind of product marketing strategy.

I would be more than happy to provide you some guidance, just drop me a line at michelbesner (at) me (dot) com …

 

Filed under Business Principles, Marketing, Product Management, Sales Tagged with , , , , , , , , , ,

The aftermath of my Twitter diet

November 22, 2010 2 Comments

It’s been three weeks already since I have decided to drastically reduce the number of people I follow. Here is a rundown of my findings since then.

Follow appreciation

I have had a few people thanking me as I continued to follow them. I guess that being more selective increases the value of each person that I follow. At the same time, I have to say that I also better appreciate each individual that contributes to my Twitter feed.

Better communication channel

With a lot less noise on my feed, I miss less pertinent information that I care about and can easily read more news that matters to me. I also spend a lot less time on Twitter as it’s easier for me to keep track of what people have tweeted about for more than just the last 5 minutes.

Easier filtering

There is still a bit of noise on my feed but now it’s a lot easier to clean in between the feeds I want to really follow. I can now simply unfollow a few people here and there when I do not enjoy the kind of news or info they provide.  I don’t mind knowing where my friends land on foursquare but don’t really like to see people that I barely know tell me every 20 minutes what they ate or been (hint to Twitter, you should have different feeds depending on the kind of info we want to tweet about …)

Impact on my audience

At first a lost a few followers but as you can see from the charts below, not to the extent that I have been trimming on my side. Perhaps I could see a bigger impact if more people start doing like me but so far, it looks like my level of Twitter influence has not been impacted.

I would love to hear your own impressions about my recent Twitter diet. I am sure there are some cons that I have not foreseen – but so far, this has been a positive experiment all around.

Filed under Business Principles, Marketing Tagged with , , , , , , ,

My Twitter 2.0: Why did I stop following more than 75% of the people I followed?

November 5, 2010 Leave a comment

I have been on Twitter for almost a year and a half and this is definitively a platform that helps me to stay informed about what’s going on. But as many folks out there, I got carried away with the whole ranking/number of followers syndrome. It gotten to a point where I was using automation tools to try to augment my number of followers, increasing of course the number of people that I follow. Earlier this week, I decided to go on a Twitter diet and reduce the number of followers by almost 75%. You may wonder why I did such a drastic cut, here’s why:

Signal to noise ratio

While I was still getting all the information I needed, the added number of people that I was following was basically creating noise on the communication channel. Implicitly, I was spending more time and checking more frequently my Twitter feed in order to catch all the tweets I wanted to see. While this is good for Twitter, this was not good on my time and efficiency. Less noise means more quality on my feed.

The importance of a Bio

One of the first things I did to start this aggressive diet was to check each Twitter account I was following and looked at their Bio. Do I know this person? Does his/her bio compel me to follow them? For each Twitter account’s bio that did not meet certain criteria, I stopped following. For me, some of the criteria were entrepreneurship, people in product management and marketing, people in the media (mostly local media that is) and Twitter accounts that were news feed or providers of valuable content (such as Mashable).

Do I know you? What do you have to say?

As part of this diet, the level of relationship I have with these Twitter account was also key. Knowing a specific Twitter account personally increased the chance for me to continue following. Also, the quality of what you had to say had a lot of weight in the balance.

When were the last times you tweeted?

Another factor was to check certain Twitter accounts for the last time they had tweeted. While some accounts had interesting tweets, if you had not tweeted for several months, you have been removed from my list. I do not want to keep following someone just in case that this person might have something to say a few times a year. If its business related, we are most likely connected on LinkedIn and I can see any status updates over there.

The result

Well, it feels like I have truly lost a lot of weight. I have now at a little over 600 people that I follow. My Twitter feed is easier to read and I am getting a lot more quality content each time I check the latest updates. It also makes it much easier to trim the last 10 pounds – I basically got into the habit to removing additional Twitter accounts as they tweet things that I don’t find interesting anymore. Also, for the first time in a lot of time, I have more followers that people that I follow.

I will keep you posted on how my Twitter 2.0 experience pan out, so far it has been a breath of fresh air and makes me appreciate Twitter a lot more…

Filed under Business Principles, Marketing Tagged with , , , , , , , , , , , , , , ,

Big challenge in front of you? It’s the best time to re-invent yourself

October 29, 2010 Leave a comment

As an executive, it is important that you have the right picture of your business and know when things are not going as planned. No matter how great the strategy was, if you can’t be successful with your execution, something got to change. And while you might be tempted to change everything in the business, the biggest change starts with just one person: you.

First step: get real

Are you still a hopeless optimistic? How much do you understand the problems and challenges that the company has? The biggest wake up call you can have is to get real. While the transition from being an optimistic to become a realist can be quite painful – it’s a must have in the evolution of any executive. One of the challenges here is that most people perceive being real with being pessimist or negative. But if you are on cloud 9 and are completely ignoring the facts, it’s obvious that any realist will sound pessimistic. Getting real is actually about looking at facts, listening to what the others have to say, take some time to reflect and make your own conclusions. If you are usually dismissing the feedback of others in a second, you are not listening. If you are constantly providing explanations when faced with facts, reality is not sinking in.

Second step: think

Any executive needs a little bit of time to think and reflect about things. You can’t always be on the go with a thousand things to do. If the CEO is never taking the time to reflect, who will? That’s the basic fundamental behind having a business coach, mentor or advisor; it’s to help you think. Without reflection, you are just reacting to events. While this might make you feel like you are doing something, this is not sustainable in the long run. Everybody needs some down time – take this opportunity to relax and think about the real issues you need to fix.

Third step: look deep inside of you

“Are you doing everything you can?” and “What more can I do?” are often questions you may ask yourself. Try a different route. What could you do differently? Are there specific aspects that you could take a different approach?  Solutions are more often within what you could do differently, better or smarter. Challenge yourself, look deep inside of you and try to find any behaviors that you have that could benefit to change or improve. Try to find solutions that will make you a better person, a better manager, a better leader. Find a channel that will help you: coaching, mentor, read books and even attend leadership seminars.

Fourth step: re-invent yourself

This does not mean that you need to completely change your personality. But everybody can re-invent himself or herself in certain areas. The bigger the changes you make, the greater the impact on the business. As a leader, it is your responsibility to re-invent yourself in moments of crisis, try new things and challenge status quo. If you don’t, the business will go down or you will get replaced upon failure. I have to say that I have been thru this process a few times already and I have to say each time has proven to be a major boost on myself and have been amazed on the impact that this had around me. Don’t be afraid of change as you will become a better person and will make your business successful.

 

Filed under Business Principles Tagged with , , , , , , , , , , , , , ,

From ideation to realization

September 30, 2010 Leave a comment

While I was working at Autodesk, I really liked their tag line “Ideas Realized”. It was simple and had a core message to it: “how to get your ideas to become reality”.  We often link great thinkers with the ideas that came from their minds and the ones that make them a reality, visionaries.

Ideas are cheap

Don’t get me wrong, a great idea is not easy to find. But everyone in his or her own mind get once in a while a great idea; something that would be truly amazing and could change the lives of millions. I am sure there are many people that are claiming right now that they also had an idea similar to Facebook, Twitter and the iPod.

Making it a reality

An idea is just an idea. Making it a reality is quite another challenge. First, you need to ask yourself what does it take to make this happen. Are there any specific technological barriers? What kind of resources and talent do you need? How many steps are needed to your idea to work as planned? How much would it cost? How long will it take for it to happen?

Be precise about your idea

Before going crazy and try to make the impossible happen, make sure that you have a clear idea about your idea. While not always easy, try to be precise. If you are thinking about doing some cool app in the cloud, how it will work? Who will be the primary users of your idea? What problems are you solving? Taking the time to specify clearly what your idea is about will allow you to get more people on board. If you are the only genius that gets it, nobody will be able to help you in making it a reality.

Do you have a plan?

So you have a clear specification of your idea. You now need to build a plan that will get you from paper to delivery. If you need technical problems to solve, what is your plan to get them resolved? If you need funding, did you create a preliminary business plan? If things are too complex, simply start with a plan for the plan. Sounds silly but sometimes a short list of things to hammer out in order to get the plan done is the best way to get the wheels turning.

Build specific milestones

As you get ready to start realizing your idea, you nee to set proper milestones that will allow you to track your progress. As a rule of thumb, I like to have between 5 and 7 milestones for bigger initiatives. For each of the milestones, make sure that you have metrics that can help you quality your level of success. For example, get funding is not enough, you need to specify how much money you need to raise and by which deadline you want to close your round.

Hope this helps you get some of your ideas to realization. Please send me feedback; I always appreciate to receive comments from the blogs that I post.

Filed under Business Principles Tagged with , , , , , , , , ,

Business Confidential: how sensitive is your data?

September 27, 2010 Leave a comment

Do you find sometimes that you are swimming in a world of non-disclosures (a.k.a. NDA), whereas most of them are not really needed? Honestly, I believe that we could live without the majority of NDA’s that we are signing. In this day and age, people qualify anything as sensitive or confidential data – including their business address and who does the cleaning – lol. But seriously, how confidential is the data you want to share? Most of the time, we spend way too much time around the definition of a NDA, only to find out that there is very little information that is being shared.

What are you really afraid of?

How much can someone else do once they learn about your secret sauce? Can they just go and do what you’re planning to do? Information that needs protection is either information that would have an impact on the market (mostly if you are a public company) and specifically hurt your business if it becomes public knowledge. General direction of a business or a vague idea about your business plan does not cut it.

What competition would do?

That’s one of the most important question you need to ask yourself. What would be the impact if your competitor were to learn about this so-called confidential information? If the impact is low or nil, then there is not much you should be concerned about. Of course, if you have specific trade secrets or revolutionary new product coming, you want to make sure to safely guard this information.

Do you have just ideas?

You are in trouble if you have just a bunch of ideas but without the ability to execute them – NDA or not. People should spend more time on execution that to worry about others stealing their ideas. Beyond accusing others of taking your ideas, focus on making your ideas and plan a reality. If you execute well, competitors should never have enough time to beat you to the market. Nothing in an NDA is stopping you from badly executing – so stop blaming the others if you failed.

How much do you really need to disclose?

Again, learn to be selective about what you disclose. We actually say less when there is no NDA in place. People have a tendency to talk a lot more because “we can do it in confidence”. Staying quiet is the best method to protect confidential information. Let me burst your bubble and let you know that people still talk even with an NDA in place. Maybe not officially but people like to talk. Companies that have a culture of staying quiet have a better chance of keeping confidential information to themselves.

Learn to sign NDA’s when they are really needed. Talk less and focus more on your execution – these are the best tricks to stay ahead of the game and keep your information confidential.

Filed under Acquisitions, Business Principles, Finance, General, Human Ressources Tagged with , , , , , , , , ,

The new CEO and understanding the company culture

September 23, 2010 Leave a comment

So you have recently joined a company as the new CEO (or President/GM). The vision is clear and you know the direction to take. But this won’t be possible unless you get the entire company behind you. If there is any reluctance to change or to accept new leadership, you won’t get very far. As the new commander, you need to make sure you will get support and help from everyone below you.

Understanding the culture

While you might have a general understanding of the company culture, there is no better tool than to just ask around and get your own idea on the matter. Take the time to sit down with the employees and simply ask them questions about themselves, the Company. Here is a simple list:

  • Three words that would describe you:
  • What do you like about your job?
  • What don’t you like about your job?
  • Where do you see yourself two years from now?
  • Three words that would describes Company:
  • What should never change at Company?
  • What needs the most improvement at Company?

Not only this will help you get a better picture of some of the problems that the Company has but also to extract the core essence of the Company – as well as getting to know more your employees. Of course, this could take a lot of time depending of how many employees you are managing but at least begin with the leaders, senior managers and key employees. Ultimately, I believe that the CEO needs to meet with each and everyone of its employees either thru one to one, group meetings or company all hands.

Leaders are not always the one we think

Let’s not confuse seniority with leadership. If you just joined the business, it is easy for you to know how long each employee has been with the Company. But determining who are the up and coming leaders is a different story. First step is to ask managers that are already in place but I also believe that the new guy can bring a lot of fresh insight into the picture. And the only way I know to find out if by watching potential leaders in how they are working and interacting on a daily basis; but to also sit down with them.

Don’t just talk, listen

Many executives like the sound of their voice, and would never refuse an opportunity to speak in front of an audience. But listening is a whole different can of beans. Listening requires that you shut up (only to ask a few questions in order to get specific information) and let the others express themselves and share their thoughts. A CEO that knows how to listen (and learn) is an amazing tool for a Company; starting by understanding the Company culture.

Filed under Business Principles, Human Ressources Tagged with , , , , , , , , , ,

← Older posts

Newer posts →

Follow

Get every new post delivered to your Inbox.

Join 1,060 other followers