Communication Tools for Entrepreneurs: How to make your idea credible and understandable

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Why do we need the tools?

B-plan Exec

Summary PPT Deck

White paper

Communicate to employees

Solicit investment

Communicate to partners

Communicate to customers

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Communication tools: how to make your idea credible and understandable

  Investors must understand what you do and who cares

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Investment Opportunity

Clear Message

Focused Company

Strong Management &

http://www.youtube.com/watch?v=nkuOuxRD1Bc

1:32-2.28

Guest Speaker 1

How do the tools work?

  The tools EXPLAIN and ILLUSTRATE:

  What is unique about your business?

  Who cares?

  How will you execute?

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DIFFERENTIATED SUSTAINABLE

VALUE PROPOSITION

Selling vs. Planning

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VS.

DYNAMIC

AUDIENCE-CENTRIC

EASE OF UNDERSTANDING

CONSISTENT, CONCISE, CLEAR

VISUALLY COMPELLING

No hype. Let investors become enthusiastic on his/her own

Business planning is an iterative and adaptive process

A clear, precise structure is a courtesy to those investing their time in reading the proposal

The storyline and all the facts presented must fit together and generate a well rounded impression

Acknowledge style, recognize knowledge gaps and biases

Those who allocate investment resources rarely are technical experts for the technology used in the proposal

Principles for Business Planning and Communication

FACTUAL

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YOU are the most important communication tool

 Guest Speaker 2: David S. Rose, an Inc. 500 CEO and serial entrepreneur himself, who has been described by Crain’s New York Business as “the father of angel investing in New York”, and by Red Herring Magazine as the “patriarch of Silicon Alley”.

http://www.youtube.com/watch?v=lzDBrMisLm0&feature=related (from 1:36-5:02)

Make your message memorable

 ENGAGE your audience

  Make information meaningful to them   Case studies

  Address knowledge gaps   Visuals, charts, graphs

  Let them arrive at their own conclusions   Pace your delivery

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Example Privacy technology

to close the

$15B Gap

Expanded Market for Ad Networks

New Revenue for ISPs

Total US Advertising Local National

National Local

National Local

5%

11%

25%

12%

$295 B $95 B

$200 B

2008

2014

Source: eMarketer 2008

$5B

$15B

% of Advertising Online

Know your audience

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  Speak to your audience in language that they understand:

  Institutional investor – do not speak ‘techie’, tie everything back to money

  Strategic investor – may be more technical; will be interested in your ideas as they impact their business

  Strategic Partner – mix of technical and business; understand how a relationship will be mutually profitable to both parties

  Angel Investors - access their background; understand their interests

  Customer – understand their industry and pain points

Social media tools

 Create an engaging conversation with bloggers and customers

  Let peers, partners, journalists and investors “discover” your story through the social web

 Show what you do through images, video, links; make it easy to find through SEO;

 Many access points: LinkedIn Group, Twitter stream, YouTube, Flickr Gallery, Wikipedia

Example

http://www.youtube.com/watch?v=nkuOuxRD1Bc

2:47 – 4:22

Example: Total Addressable Market

Source: Based on eMarketer 2008 data

Total US market for our enabling technology

$0

$400

$800

$1,200

$1,600

2009 2010 2011 2012 2013 2014

Mill

ions

Local Ads

$100B

$7.5B expanded market for Ad Networks

$6B new revenue for ISPs

$1.5 Billion for our enabling technology

2014

$15B Local Gap Online Represents

By providing 3D imaging at low cost, we aim to make the procedures of the 21st century safer, faster and cheaper with better success rates, fewer complications and shorter hospital stays.

XYZ Inc. medical device startup, is based on the premise that image guidance will be a key element in the successful deployment of emerging minimally invasive therapies over the next decade.

Example: Accessible Message

Product and Benefits

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Opportunity

Communication tools help you build relationships

 Be strategic about what you provide and when you provide it   Not everyone should see your white paper or business

plan   Leave some details for later, don’t give away everything in

the first meeting

 Your documentation should radiate professionalism   Ensure accurate grammar, spelling, diction, illustration,

layout, etc.

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Myths and Truths TR

UTH

S… Choose what

tools to use and with whom Should entice the investor into asking for more Building your communication toolkit is an iterative process M

YTH

S… You only have

30 seconds to get an investor’s attention You should start by building your business plan Have all your tools ready to deploy

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The Tools

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The Tools You Need to Raise Money http://www.marsdd.com/entrepreneurs-toolkit/articles/Investor-engagement-The-tools-you-need-to-raise-money

The Elevator Pitch

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The Elevator Pitch

  What:   A 30 second overview of your business concept

  Why:   To get a follow–on meeting

  When:   In a cold call to an investor, customer, potential partner, etc.   Good for networking at trade shows, business functions, etc.

  Dos and Don’ts:   Do not spend forever practicing and refining this – should come naturally;   Figure out a few key messages you would like to get across to use as a loose

script   Distribute key messages to outward facing employees – standardize message

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ABC Inc. is a location-based advertising company focused on bringing hyper local targeting to any website.

Through a unique privacy architecture, Inc's technology allows media companies and advertising agencies to accurately reach the most relevant and responsive demographics online.

PAIN POINT A need for…

The Elevator Pitch

VALUE PROPOSITION

Allow one to…

The Executive Summary

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The Executive Summary http://www.marsdd.com/entrepreneurs-toolkit/articles/Investor-engagement-The-executive-summary.html

The Executive Summary Template http://www.marsdd.com/entrepreneurs-toolkit/articles/Investor-engagement-Executive-summary-template

The Executive Summary

  What:   3-5 page summary of your technology, product, sales plan, revenue path and

financial requirements

  Why:   A ‘teaser’ document meant to generate a request for more information or a

meeting   Readers will want to get their head around the concepts quickly

  When:   When you have a ‘warm’ intro or an invitation to contact someone   Integral first interaction with an investor   Rides the line between confidential and non-confidential – some degree of

trust

  Dos and Don’ts:   Has to have the right emphasis given the maturity of the business concept   Keep it current

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The Whitepaper

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The Whitepaper

  What:   A fairly concise layman’s summary of your technology, product(s), the

uniqueness of the technology and products and the value proposition

  Why:   Helps investors to understand how a concept or technology works

  When:   After investors are curious about details or have bought into the big picture

business vision

  Dos and Don’ts:   Put the whitepaper on your website   Don’t go so deep as to give away all of your trade secrets/IP – consult your IP

professional   Keep it as short as possible and fully explain all acronyms

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The PowerPoint

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Elements of a Pitch Deck http://www.marsdd.com/entrepreneurs-toolkit/articles/Investor-engagement-Elements-of-a-pitch-deck

Building a Strong Presentation http://www.marsdd.com/entrepreneurs-toolkit/articles/Investor-engagement--Building-a-strong-presentation.html

The PowerPoint

  What:   A ~15 slide outline of the key aspects of your business plan

  Why:   Provides an overview of the business plan in point form   Allows people to absorb a lot of key information in a short period of time

  When:   Usually the second piece of information an investor receives after the executive

summary   Investors love these because they can flip through them very fast and get highlights

  Dos and Don’ts:   Critical document in the fundraising process – present a sound story; make it look

good   Practice speaking to it, preferably in front of friendly people who will ask lots of

questions   Use graphics as much as possible

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The Business Plan

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The Business Plan http://www.marsdd.com/entrepreneurs-toolkit/articles/Investor-engagement-The-business-plan.html

The Business Plan Template http://www.marsdd.com/entrepreneurs-toolkit/articles/Investor-Engagement-Business-Plan-Template

Business Plans for SE and SPBs http://www.marsdd.com/entrepreneurs-toolkit/articles/Business-plans-for-SEs-and-SPBs

The Business Plan

  What:   A rigorously prepared and executable description of how you will build your

business

  Why:   This is your roadmap for how you are going to build your business   Describes roles and responsibilities for building various aspects of the business

  When:   When you have assembled enough solid information to write it   Highly proprietary; later stages of diligence   Wait for the investor to to ask for it

  Dos and Don’ts:   Often made a condition of financing or a board action item   Re-write with every major change in strategic direction   Avoid the temptation to turn this into a sales tool – preserve its integrity as an

execution plan

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How to create your toolkit?

  Do not start by building your business plan   You will not have the information you need   You will examine issues out of priority   You will expose lack of understanding

  Use the PowerPoint Deck as receptacle for all ideas and information that comes to light – easy to manipulate, organize and adapt

  Build your executive summary and eventually your business plan based on your PowerPoint deck

  Give investors your exec summary and offer to walk them through the PowerPoint slides in person or on the phone

  Develop visual assets (diagrams, videos) to use on-line and in your pitch deck

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Advice from the Trenches

  Practice, Practice, Practice

 Different versions for different people   Management vs. finance vs. technical

 Version control

 The main idea of all of this is to entice investors/partners to take a deeper look

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Advice from the Trenches

 Do not overload the documentation   Try to get across a few key messages instead of telling

the whole story   Your audience will only absorb the key messages

 Templates exist for all of these documents   Don’t re-invent the wheel   MaRS has developed templates based on extensive

review of industry best practice materials

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Building Your Message

Idea# 1: “Don’t Dive Straight into the Technology” (Value Proposition)

  Don’t start with technology. Everyone has this. Instead create context.

  Understand your customer’s pain points and show them how you offer a value proposition that is FASTER, CHEAPER, BETTER

Idea #2: Maintain A Degree of Focus & Consistency in your Message (Brand)

  Focus on just a few of the really good things you can do and lead with these points.

Idea #3: “Personify your People” (Profiles)

  Profile Managers Backgrounds - Creates context for potential clients and investors.

Idea #4: “Provide Proof of Results” (Case Studies)

  Tell a story. Focus on Results and the overall customer experience. Use testimonials.

Business Plan

  Executive Summary   Company & Opportunity Summary   Product & Technology   Market Size and Growth   Sales and Marketing Plan   Competitive Overview   Operations Plan   Management Team   Financials & Investment Requirements

Outline

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PowerPoint/Investor Deck

Outline

  Company Description (1 paragraph)   Company Overview, Management & Vision

(2-3 slides)   Need & Existing Solutions (1-2 slides)   Technology, Products and Product Rollout

(2-3 slides)   Market Opportunity (1 Slide ,Graphical)   Competitive Overview (1 Slide , Largely

Graphical)   Sales Strategy & Channels (2-3 slides)   Partnerships and/or Partnerships strategy

( 1 slide)   Financials & Path to Liquidity (2-3 Slides

(Largely Graphical)

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Executive Summary

  Company Description (1 paragraph)   Basic Need & Company Solution

(1 paragraph)   Technology and Product(s) (1 paragraph;

diagram)   Value Proposition (couple of bullets)   Market Size and Growth (diagram)   Sales Plan (1 paragraph)   Competitive Advantages (couple of bullets)   Management (detailed bullets)   Revenue Growth Projections (diagram)   Financing Requirements (1 paragraph)

Outline

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http://www.youtube.com/watch?v=nkuOuxRD1Bc

4:58-6.24

Be Yourself and Have Fun

Veronika Litinski Advisor, MaRS Discovery District T 416-673-8113 E [email protected] W www.marsdd.com