BackgroundYariv Levski
• 15 Years of Business Development, Marketing and management in 4 industries: Television, Telecom, Payment and now Digital Health
• Consulted foreign investors re investments in Israel• Former Board of Directors – TVTak (acquired), Appforma and Tekoia
• Current: CEO of Second Opinion Group
Background – Current Market Trends (Investors Market)
Thinking like an investor – chasing Unicorns
Questions Investors Ask
Ideal narrative (and pattern) investors like
Great ways to ‘turn-off’ investors
The good news are..
If an Alien would arrive Tel Aviv these days, he (or she) would think that it’s very easy for a startup to
raise money from investors, right?
In recent years,
3000+ startups try to raise money every year,
800-900 succeed (less than 30%)
only 150 would succeed in next round (17%)
BTW,
What is the most common reason for startups not succeeding in next
round?
Main Reason – not reaching a significant milestone
From investor’s point of view:
Yes, there are more opportunities
So It means
I have to be more selective!
AngelExpect to return
X3-X5 on his investment
Past – Idea phaseNow – product phase, maybe even revenue
Invest in early stages, most risky
phase
VCExpect to return
10X on their investments
Past – product phaseNow – Revenue Phase
Interested in decreasing their risk
Background – Current Market Trends (Investors Market)
Thinking like an investor – chasing Unicorns
Questions Investors Ask
Ideal narrative (and pattern) investors like
Great ways to ‘turn-off’ investors
The good news are..
1. Easy to Dismiss ideas
By the time the startup reach 1B$ valuation,The idea is understood.
But it wasn’t the case before
Easy to Dismiss ideas
Driving Black cars?
Watching other people playing video games?
A disappearing message with a picture?
Renting someone else’s couch at home?
3. Reinventing existing consumer behavior
Not innovative, but improving an existing consumer behavior
4. Untested Founders
Not without experience at all, but 75% of the founders were first time founders
The research conclusion:
There are large companies to be built by offering new, innovative and superior
customer experiences to large markets, regardless of how competitive the sector already is or how successful the founders
have been before.
As investor, does it mean that when I meet a venture with:
1. No revenue2. Easy to dismiss idea
3. Low innovation (evolution but not revolution)
4. Operate in competitive market5. First time founders
Should I invest?
Background – Current Market Trends (Investors Market)
Thinking like an investor – chasing Unicorns
Questions Investors Ask
Ideal narrative (and pattern) investors like
Great ways to ‘turn-off’ investors
The good news are..
General
1. What does the company do?2. What problem do they solve?3. Market potential
*The idea is that when you solve an existing problem, you don’t need to educate the market
* 5B$-10B$ market size
Product
1. Do users love your product? Daily average use? Monthly?
2. What are the milestones?3. Is the product unique? Chances for IP?
Competition
1. How does the market look like? How would it look in 5 years? 10 years?
2. Planned market share?3. What’s your unique
point of value?
Marketing and Customer Acquisition
1. What’s the CAC?2. What’s the TLV?3. Does the economics work?4. Traction (downloads, daily behavior,
revenue)
More..
1. Business Plan2. Size round and what would you achieve
(milestones)3. What’s the round valuation
Background – Current Market Trends (Investors Market)
Thinking like an investor – chasing Unicorns
Questions Investors Ask
Ideal narrative (and pattern) investors like
Great ways to ‘turn-off’ investors
The good news are..
Example
1. Team – served together in the army or worked in the same R&D group
(It means that they have history and know how to get a long)2. The problem they solve – ideally experienced it as users3. The value proposition is understood4. Development has started. You can show Alpha, even better Beta, even better commercial version
5. There is a momentum (train is leaving the station)
What does it mean – the train is leaving the station?
Even if the investor, (especially angels)Likes the idea, team, product
His initial motivation is to keep his money in the bank.
You need to motivate him to actually invest (and saying – “we are meeting other
investors” doesn’t work ..)
Train is leaving the station
It means that you’re in progress,And soon the train is leaving and it would be too
late - To join
Background – Current Market Trends (Investors Market)
Thinking like an investor – chasing Unicorns
Questions Investors Ask
Ideal narrative (and pattern) investors like
Great ways to ‘turn-off’ investors
The good news are..
Funding
“Once we would receive it, we would plan what to do with it”
(That’s not a good sign as well, right?)
Background – Current Market Trends (Investors Market)
Thinking like an investor – chasing Unicorns
Questions Investors Ask
Ideal narrative (and pattern) investors like
Great ways to ‘turn-off’ investors
The good news are..
The good news:
It’s really easy (and cheap) to develop a prototype. It cost more to develop a Beta – but still affordable.
Israel is a great market to develop Digital Health products (Great HMO, great health system, great doctors and more)
Foreign investors are here – it’s a global market!