David Rose On Pitching Your Business To Investors

David Rose on pitching your Business to Investors Thursday, March 12, 2009, 6-8p Fordham University School of Law McNally Amphitheatre, moderated by Charlie O'Donnell. Quick Bio: David Rose is Chairman of NY Angels , an investment group of 66 member who are entrepreneurs, CEO's, venture capitalists and business leaders David is an entrepreneurial executive and investor with extensive experience in high technology and communications, angel investments, finance and government.

Notes by Chris Cho David’s presentation was divided into two sections: raising money and pitching presentations. Part I: Raising Money – Grants: Free money from the government ○ www.grants.gov ○ Seek for SBIR/STTR grants. They typically invest $100K - $400K, depending on stage. ○ Local NYC agency ITAC helps find money for you – Self-financing (“bootstrapping”) is best – Banks ○ Bank loans: Not viable unless you have collateral, tremendously risk adverse ○ SBA loans = typically for merchants for working capital – Raising equity means, selling your company and gaining a partner – Your idea? You should invest first. Then ask friends and family. – Angel Investors did approx 49000 deals in 2008 ○ Typically wealth individuals, need to be accredited investors ($1m in assets or $200k in income for 2 consecutive years) – Venture Capitalists did approx 3400 deals in 2008 ○ Institutional investors, very risk adverse – Typical IRR = 25-30% ○ For every 10 investments, 5 go bankrupt, 2 break even, 2 return 3x ROI, and 1 must deliver 30x ROI <- will your next startup produce 30x?? Aim for it! – Factors angels look for: ○ Large and growing market ○ Scalable business model ○ Competitive advantage ○ External validation ○ Reasonable valuation ○ GREAT PEOPLE – The most important person in the startup is the entrepreneur – Investors look for: ○ Integrity ○ Trust ○ Passion ○ Experience like serial entrepreneurs

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Knowledge (domain expertise) Skill (sales, marketing, fundraising) Leadership (must inspire, ability to assemble effective team) Commitment Vision Realism “Coachability” Ability to COMMUNICATE

Part 2: Presentations – Forms of pitch communications: ○ Business plan (typically won't be read in its entirety) ○ Executive summary (Will be read!) ○ One pager (Get sample online @ Angelsoft) ○ Email (By-way-of introductions more effective) – How to get it out: ○ Network! ○ LinkedIn ○ Angelsoft – Elevator pitch: ○ Share something exciting about your company ○ What you do ○ Who you are ○ Keep it simple ○ 30 seconds ○ Have it down cold! Rehearse, rehearse, rehearse. – Video pitch can be effective too. (You can submit on Angelsoft.) – Presentation components: ○ Name and logo ○ Context setter ○ Logically organized ○ Management ○ Market ○ Pain points addressed ○ Product ○ Business model ○ Customers ○ Go to market ○ Competition ○ Barriers to entry ○ Financial overview ○ Capital and valuation ○ Review – The presentation actions: ○ Use photos ○ Talk about it then show it ○ Rehearse ○ Most important: investor look at u

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David's Top 10 Pitch Tips: ○ Only CEO can give money pitch ○ Check equipment 60/20 rule. ○ Pace presentation smoothly ○ Don't stroll or fidget ○ Don't tell jokes. ○ Hand outs are not your presentation (give them out last) ○ Always use a slide remote control (buy it!) ○ Don't do a live demo EVER ○ Don't read your pitch ○ And #1) Never look at the screen!