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Assurance and Advisory Business Services October 28, 2003

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Venture Capital Advisory Group

October 28, 20031

The Perfect ElevatorPitch, Slide Show, and

Business Plan Tools for

Raising Capital

The Perfect Elevator

Pitch, Slide Show, and

Business Plan Tools for

Raising Capital

Chris Cantarella

UMD Bootcamp

October 25, 2003

Chris Cantarella

UMD Bootcamp

October 25, 20032

My Rules of Thumb forRaising Capital1. Mindset

2. Communicating with VCs

3. Cantarellas Mantra (P.S.U.C.F.)

4. Elevator Pitch

5. Slide Show

6. Business Plan

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There is NO PERFECT

elevator pitch, slide

show, or biz plan

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YOUR MINDSET is thekey.

3 STEPS to get youin the right MINDSET

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Step 1: Know YOURSELFand YOUR TEAM Your strengths/weaknesses

Your personal & teams vision

Know what you know

Know what you dont know

BE REAL/BE YOURSELF

Mindset

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Step 2: Know WHAT youseek Know your companys needs

Know what AUDIENCE you

seek

Mindset

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Step 3: Know yourAUDIENCE WHAT theyseek How they think

How they process information

How they make decisions

What THEIR NEEDS ARE

Mindset

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General VC Firm Mindset Manage Returns (IRR)

Manage TIME

Optimize current portfolio

value over time

If seeking new dealsoptimal

REWARD probability per unit

RISK

Mindset

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General VC PersonnelMindset Build their reputation/brand

Succeed in their ROLE at the firm

(new deals, raise funds, etc.)

Champion winning deals internally

Manage TIME

Mindset

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Communicating with VCs

Random one-on-one chats (Elevator

Pitch)

Referrals usually emails from their

trusted sources (Executive Summary)

VC Forums (Slide Show)

Before a Formal VCMeeting

YOUR GOAL?Attain a Formal Meeting

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Communicating with VCs

Presentation (Slide Show)

Q&A (Knowing your BusinessPlan)

Discussion (Communicate Free-style)

In 1st Formal VC Meeting

YOUR GOAL?Attain the 2nd Meeting12

Cantarellas MantraProblem Big & Painful

Solution Clear & Unique

Unfair Advantages-team,go-to-market, distribution, IP, etc.

Competition- Buyers Options

Financials Needs, Funds use,Why big return potential given risk

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Problem

How Many Buyers/Market?

How painful is it to the market?

How is the problem dealt with today?

The Audience MUST

Believe there is a Problem

worth solving in order to

keep listening!!!

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Solution

Basics of your solution

Basic unique advantage

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Unfair AdvantagesLegal and ethical but UNFAIR!!

Think aggressively here Is your team not an advantage here? If not you might need

to rethink your capital raise

Intellectual Property?

Unique Processes?

Unique position?

Unique deal/s?

Unique distribution or go-to-market advantage?

Unique advantage in operations efficiency?

Price point advantage?

Exit strategy advantages?

A lack of these should make you rethink

your business plan anyway!!!16

Competition How else can prospective buyer fix problem?

Your competitor's solution?

Build it in-house?

Wait? Status Quo?

Pretend it does not exist?

Deflect problem to a supplier etc?

Ask their present solutions provider to adapt

a temporary solution?

Your competition is ANYTHING that could hinder

your sales !!!

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Financials Funds you are asking for

Use of funds

Major Milestones/Milestones Projected

Expected capital needs thru to exit

High level 5 yr financial projections

Possible exit scenarios (possible multiples

etc.)

Why would an investor care to invest??? What is

the reward vs. risk in $???

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Elevator PitchAudience: VC (or Angel, Svc Provider, etc.)

Goal: Bait hook to attain 1stMeeting

Execution:

1. 50,000 ft levelof PSUCF

2. Focus on Sound Bites

3. Make sure so what benefits are tangible

4. Show passion

5. Plain English (KISS),

Structure: 2 minutes verbal

LESS IS MORE!

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Executive Summary

Audience: Referral Source thru to VC

Goal: Bait Hook to Attain 1stVC Meeting

Execution:

1. 30,000 ft Levelof PSUCF

2. 2-5 pages

3. Ensure to include Team info and top-line

financials

4. Plain English (KISS)

Structure: Word Document and/or PDF File

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Slide ShowAudience: VC (1stMeeting)

Goal: Create VC Champion for next Monday AM VC

mtg..attain 2ndmeeting

Execution:

1. 15,000 ft Levelof PSUCF use case examples of

problem.show impact ROI of solution

2. 10-12 slides 20 minutes worth

3. Have more detail Q&A Slides ready to go

4. Show passion

5. Plain English (KISS)

Structure: simple slides

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Business PlanAudience: VC (Helps you in discussions, DD,

planning)

Goal: 1) External to Raise Capital; 2) Planning with

credible financials; 3) Retrospective Tool

Execution:

1. 5,000 ft Levelof PSUCF

A) Executive Summary

B) Problem how many (market) & how painful

C) Solution Products/Service

D) Unfair Advantages Now and Later

E) Operational Plans

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Business Plan ContinuedF) Management & organization

G) Major Milestones

H) Structure & Capitalization

I) Financial Plan/Model where assumptions can be

changed

Ass umpt ions page

Rev enue Pro ject ions

Expense Pro ject ions

Gross Margins

Balance Sheet; Income Statement; Cash Flow

Statements

Break-even ana ly si s

Structure: 20-30 pages

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Have the Right Mindset

1. Know Yourself and your team

2. Know what you seek

3. Know your audience and what they seek

Use Plain English

Be Real/Be Yourself

K.I.S.S.

PSUCF

Know the Goal for Each Tool You Use

(Elevator Pitch, Exec Summary, Slide Show,

Business Plan)