Presentation given by Steve Barsh of DreamIt Ventures for the Wharton Entrepreneurship Club February 2009 on techniques for identifying key assumptions and de-risking them early in a capital-efficient manner to lower risks and increase value.

1. De-Risking and
Acceleration
Steve Barsh, Managing Partner
steveb@dreamitventures.com * 215.888.2101
dreamitventures.com
barshbits.com sbarsh
1
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2. Agenda
• DreamIt Ventures
• De-risking & discovery
• Q&A
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3. Help great people
with great ideas
build great companies
• 3 month Startup
Accelerator
• Pre-Seed investment
• Expertise
• Mentorship
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4. Entrepreneurs Receive
Mentoring Professional Services
Expert Speakers Team Members
Community
Software + Resources
Capital
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5. Premises & Observations
• Money too early
• Validation from investors
• Key risks
• Out-of-box techniques
• De-risk before
• Pitching
• Building the product
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6. 3 – 7 Key Assumptions
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7. De-Risking Goals
• Convert assumptions into
knowledge
• At lowest cost
• As quickly as possible
• Decrease assumptions
to increase value
• Consume intellectual capital
before significant outside
capital
• Succeed or fail quickly
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8. Common Assumptions
Positioning / dierentiation
Demand
Market size
Feature set
Competition
Pricing / business model
Sales / adoption cycle
Team
Product development
Execution
Marketing
Financials forecasts
Financial needs
Enterprise value
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9. Common Problems
Key assumptions not
captured and no time
table
Little discussion with
potential customers
Little primary research
Weak demand
Pricing a guess
Marketing field of
dreams
Strategy alignment
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10. Stop Waving, Start Pointing!
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11. 100% Sure?
• Plans
• Presentations
• Pitches
• Financial models
• Forecasts
• Estimates
• Things with numbers or
graphs
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12. Experiment
• Hypotheses
• Prove or Disprove
• Build -- Release,
measure, learn,
iterate
• Research
• Valid proxies
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13. Key Investment Questions
• Key assumptions, dependencies,
and timetable?
• Evidence we are looking for?
• Assumptions de-risked before
further investment?
• Success criteria (e.g., market
uptake; revenue; impact,
financials, etc.)?
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14. 3 Main Takeaways
1. Key assumptions
2. Experiments
3. Convert assumptions
into knowledge
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15. More Info
• Redeye VC Blog: Failing Cheaper by Josh
Kopelman, First Round Capital.
• Common Mistakes Made by Entrepreneurs by
Mark Henricks.
• How To: Raise Money in a Down Economy by
Eric Ries at KPCB.
• Discovery-Driven Growth: A Breakthrough
Process to Reduce Risk and Seize
Opportunity (March 2009) by Rita McGrath and
Ian MacMillan (Wharton)
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16. Agenda
• DreamIt Ventures
• De-risking discovery
• QA
16
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17. De-Risking and
Acceleration
Steve Barsh, Managing Partner
steveb@dreamitventures.com * 215.888.2101
dreamitventures.com
barshbits.com sbarsh
Supporters
17
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