UH Angels Presentations

If you’re going to be making a presentation to Hawaii’s UH Angels, here’s two documents you should review and use to help you prepare:

Presenter Guidelines gives a collection of bullets of topics that you should plan on including with your presentations.

Term Sheet Summary is 3 slides that detail the “deal” e.g. terms of the funds you’re raising. The info on these slides should be included w/ any presentation made to UH Angels too.

In addition, you should check out their “For Presenters” page for additional resources.

How to put together a great business plan

I go through the following steps in creating a compelling business plan:

1. Create the spreadsheet.
You’ve got to start with the numbers. How are you going to make money? What kind of volume will you need? Make sure you make this an “insane” spreadsheet that not only had tremendous depth, but also has intimately linked all the relationships into killer formulas. Ideally, I should be able to adjust the sales figures and the amount of office space required in year 3 should change.

2. Make the powerpoint presentation
Summarize your business plan in a presentation. Take a look at the other posts in the presentation category for examples and tips.

3. Make a bunch of presentations
Present your plan to anyone who will listen. On second thought, grab a few people who don’t want to listen and pitch it to them too. Listen very carefully to the questions and refine your pitch to address the issues that matter.

4. Write up the executive summary
After you’ve made tons of presentations and gotten sufficiently beat up, you by now have a pretty polished pitch. Great! Now condense the pitch to a two page (max) executive summary.

5. Write the business plan
The business plan should be an expansion of the exec summ and a written detail of the presentation. By now, you should have this so locked up that writing the plan should be pretty easy.

Keep in mind a few things:

If you’re lucky, investors will read the 1st paragraph or two. I remember one VC telling me that any “business plan” he reads has to fit on the upper part of his car’s steering wheel because he reviews new plans while stuck in traffic. DFJ says to summarize your whole plan in a paragraph and I couldn’t agree more. I like to also include the “deal” (amount of money you’re raising and the ROI) in that same space.

No one reads the business plan until the last minute
By last minute, I mean that investors will read the business plan after they have already made the decision to invest and now need to perform a collection of due diligence. You don’t need the business plan to open doors or even get in front of an investor. For that you’ll need good introductions and a great exec summary.

What VC’s look for in a business plan

Draper Fisher Jurveston posted this powerpoint presentation on a business plan competition site in India and I’ve mirrored it here. It provides a very clear collection of bullets that serves an excellent checklist of what you should have in your business plan. I would also think you should be able to summarize these things in your executive summary and presentation as well.

I suggest you download and take a long, hard look at it.

Great VC and Angel Pitch tips

Long ago I read this collection of 3 articles, “How Software Entrepreneurs can be Successful Presenters to Investors” from Angel investor Edward Harley and it really made a profound influence on how I did my own presentations. I was so impressed by this that I created a blank powerpoint slide deck that incorporated his comments in the notes section.

Anyone that feels anything less that 100% confident about their presentation should take a serious look at Edward’s articles and then if you find my powerpoint deck helpful, have at it!

Article Part 1
Article Part 2
Article Part 3
Powerpoint Slide deck embedded notes.

Where’s the Meebeef?

Three-person Meebo just got funded by Sequoia Capital at a $10mm pre-money valuation. From what I see, it’s a site that gives a web interface to IM. I think this an of itself is a really cool idea, but if I apply some very simple tests to it, it fails miserably:

1. No barrier to entry. If 3 ppl can create this, a small army of India programmers can too. Cheap.

2. No lock-in. If/when GYM (Google/Yahoo/Microsoft) launches something similar, what’s to keep the customer at Meebo?

3. No money. I didn’t see any apparent revenue model (other than perhaps seeing some ads) on their site.

Clearly, Sequoia is not stupid and they obviously see something I don’t. It will be fun to find out what that is. Right now, I can’t see how I would value this at $10M other than because they have 250k subscribers and delicious with 300k subscribers just sold for probably $30m. And if that’s the case, this is a case of more hot air inflating a bubble, meaning that one no-revenue company’s valuation is pushing up another no-revenue company’s valuation.

When you start seeing zero revenue companies getting $10m A round valuations, you can’t help but yell “Bubble!”.

Putting pants on one leg at a time

The next time you pitch to an investor, keep a simple thing in mind: this person is not a God. They are human and make huge mistakes just like you and me. The wisdom they do have (assuming they are experienced) is that they’ve seen many, many business plans and pitches cross their desk and have the experience of seeing many, many of their own investments take off and die.

This context gives them some insight to decide if they like you or not.

And just in case you ever think they are God, just read this article about the recent death of a Bubble 1.0 artifact. Read the big names. Read the big dollars invested. Read about the stupid expenses, then read about the big failure.

Then repeat the mantra: “They put their pants on one leg at a time”.

Bubble 2.0 building?

Congrats to the recent del.icio.us acquisition but I can’t but wonder: what does it indicate when a zero revenue company that has 300k hard-core geeks as non-paying customers is acquired for millions of dollars?

What kind of a signal does this send out to startup X that’s dreaming up stupid Web 2.0 app Y and pitching it to investor Z that just read about the Yahoo acquisition?

Here’s a cool quote from Paul Kedrosky’s blog that kinda says it all:

“What risk? If the company doesn’t work out, we’ll sell it for $150 million. If the company kind of works out, we’ll sell it for $500 million, and if it really works out, it’ll be worth between $2 billion and $10 billion. Tell me how that’s risk.”
— Geoff Yang, Redpoint (Fortune; 12/06/99, Vol. 140 Issue 11, p177-188)

Pricegrabber sold for $485M in cash

What’s impressive about this deal is not just the pricetag, but the fact that it was done without VC.

They hat $60mm in sales with $25mm EBIT. Nice work, ladies!

Opportunities in Search engines?

I’m reading Tech Beat, “Amazon Thinks Out of the Search Box, Again” and John Battelle’s “Alexa (Make that Amazon) Looks to Change the Game” and I’m thinking there may be some kind of an interesting opportunity here.

Alexa is essentially going to turn their whole model inside out and allow anyone to essentially pay for using their content and infrastructure. You will now be able to write code that sits atop their 100 terabytes of data and oodles of computing power to mashup your own search engine.

I can see this warranting some in-depth research for my search-engine impassioned client, for sure, and for anyone else that wants a potential piece of the current search engine frenzy market.


Then again, Here’s Jeff Clavier’s “Repeat after me: the index of a search engine is a commodity” take on it.