Are you seeking funding for your next entrepreneurial venture? Do you know how to formulate a compelling pitch deck? Do you know what investors want to hear, or why companies fail to get funding? vcfo's Carter Freeman, Colorado Managing Director, and John Brenneman, Washington Practice Manager, share their expertise in developing and delivering a cohesive and effective pitch. Both John and Carter have worked with numerous start-ups, providing financial consulting, leading the funding and financing process, managing mergers and acquisitions, aiding in the development of business plans and investor presentations, and beyond.

1. Pitch to Win
Get the Edge in Capital Raising
7/16/2014 www.vcfo.com

2. Finance Human Resources Recruiting
www.vcfo.com7/16/2014
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3. Carter Freeman
Managing Director, Colorado
cfreeman@vcfo.com
John Brenneman
Practice Manager, Washington
jbrenneman@vcfo.com
www.vcfo.com7/16/2014
Panelists

4. How would you characterize your current
situation?
a) Pre-funding: developing product/service,
researching market
b) Early stage: company launched, seeking
financing to grow
c) Later stage: received some financing, but
seeking more
d) Not currently seeking financing
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Polling Question

5. • Investor landscape
• Six stages of VC funding
• Key elements of a successful pitch
• Three content pieces to get the edge
– Pitch deck
– Executive summary
– Business plan
• Top reasons that companies fail to get funding
• Q&A
www.vcfo.com7/16/2014
Agenda

6. • Very competitive landscape
• Investors funneled $9.5B (951 deals) into U.S. VC
deals in Q1 of 2014
• Q1 VC deals are off to a strong start due to a
strong pipeline reloaded in 2013
• The percentage of pitches that are funded is low,
closing one deal requires VCs to source 80-100
deals
• Pitch needs to be concise and compelling
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Investor Landscape

7. • Seed Round: Low level financing for early stage firms that need
funding for expenses associated with product development needed
to prove a new idea, often provided by angel investors. Crowd
funding is also emerging as an option for seed funding.
• Growth (Series A Round): Early sales and manufacturing funds
• Second-Round: Working capital for early stage companies that are
grabbing market share, but not yet turning a profit
• Expansion: Also called Mezzanine financing, this is expansion money
for a newly profitable company
• Exit of venture capitalist: Also called bridge financing, 4th round is
intended to finance the "going public" process
• Venture Debt: Between the first round and the fourth round, venture-
backed companies may also seek to take venture debt
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Six Stages of VC Funding

8. • Identify problem/pain the market is experiencing
• Offer a solution
• Identify unique intellectual property
• Describe business model
• Understand market viability
• Define competitive landscape
• Executive team overview
• Include financial projections
• Explain use of funds
• Provide current status and accomplishments
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Key Elements of a Successful Pitch

9. Make sure your slides tell a story and
communicate these points:
– You are building a unique product or service
addressing some compelling need
– Your market is large enough to sustain long-
term growth
– Your target market requires your product or
solution
– Your team can successfully execute
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The Pitch Deck

10. Clarify what you are asking for:
–Current investment amount
• Specifically state how much money you are
looking to raise
–Financing history
• Provide details on past investors and the
amounts that you have received
–Use of proceeds
• Provide a high‐level breakout on how you
will use the proceeds of the investment
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The Pitch Deck

11. • Company name
• Presenter’s name
• Contact information
• Explanation of what your company does
– What is the company mantra?
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Pitch Deck: Title Page

12. What is (or will be) your primary source of
funding?
a) Self-funded
b) Friends and Family
c) Angel
d) VC
e) Other or N/A
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Polling Question

13. • What problem, market pain or unmet need
are you addressing?
• Why is your solution needed?
• How big is this market pain?
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Pitch Deck: Problem or Market Pain

14. Address the solution you are providing. Your
goal is to present the following points:
– What do you sell?
– What is your value proposition?
– What is the pain the market is experiencing
and how do you alleviate the pain?
– What are your differentiators for your
competition?
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Pitch Deck: Solution

15. Include a simple graphic that shows your
product or service in a diagram
– Highlight patents or patent pending
technology developed
– Create simplistic diagram and/or graphic
should be simplistic that is easy enough to
understand by a non‐technical investor
– Highlight anything in your solution unique to
the competition or the market in general
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Pitch Deck: The Technology Slide

16. • How do you make money?
• Who pays you?
• What are the channels of distribution?
• What are the gross margins?
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Pitch Deck: Business Model

17. • Market size or potential size
– Total addressable market
– Market segmentation by demographics,
psychographics, SIC codes, etc.
– Avoid relying solely on a market study
• How you are going to reach your
customers?
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Pitch Deck: Market Viability

18. • Name the competitors and their relative
strengths and weaknesses
• Compare the service or product to the
competition
• Emphasize the sustainable competitive
advantage that will protect the company
from existing or future competitive products
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Pitch Deck: Competition

19. • Team members and experience
– If you are a seasoned team, highlight the
obvious things like your career pedigree,
companies that you worked for, successes.
– If you are a younger team, emphasize your
experience in any relevant field.
• Board members, advisors, major investors
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Pitch Deck: Executive Team

20. • Revenue (investors prefer bottom-up forecasts)
• Key metrics
• Expenses
• Profit before taxes
• EBITDA
• Cash flow (include burn rate before & after raise)
• Capital investment
• Proceeds from sale of equity
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Pitch Deck: Financial Projections

21. • Current status of your company
• Company accomplishments
• Awards company has won
• Timeline
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Pitch Deck: Current Status & Accomplishments

22. • To be used as a one-page introductory
piece to potential investors
• Pull from key elements of the pitch deck &
business plan (next section)
• Would the executive summary make the
reader want have a meeting?
• This should also be the 1st page of your
written business plan
227/16/2014
The Executive Summary

23. • Value is in the process more than the plan itself
• Some investors require, some don’t depending
on stage and investor
• Many investors will not proceed without this
information
• This section forces the management team to work
together to formalize intentions
• Remember that success comes from good
execution, not good business plans
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The Business Plan

24. • Content similar to pitch deck, but with more
detail (write the pitch deck first)
• Less than 20 pages in length
• One writer
• Print a hard copy of the .pdf with a staple or
simple spiral
• Simplify financial projections to two pages
• Include key metrics and major assumptions
247/16/2014
Business Plan

25. What has been your biggest challenge so far
in the fund raising process?
a) Proving the market viability for my
product/service
b) Getting a meeting with the decision maker
c) Articulating my business plan/value
proposition
d) Getting the proper level of funding
e) None or other
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Polling Question

26. • Market size too small
• Market timing too late or too early
• Doesn’t match investor’s focus
• Failure to relate to true pain
• Valuation expectations too high
• Lack of go-to-market strategy
• Not clearly defining competitive landscape
• Weak pitch materials
• Not adequately addressing risks
• Financial modeling mistakes
• Execution mistakes (waiting until too late to ask for funding)
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Reasons Companies Don’t Get Funding

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Q&A

28. Thanks for Attending!
Solutions for Early Stage
Companies
How to establish the infrastructure and
processes necessary to grow your start-up,
all while focusing on essential aspects like
product development, raising capital, building
the team and acquiring customers.
287/16/2014