How to Create A Killer Business Plan and

How to Create A Killer Business Plan and Financing Pitch Christine Comaford Managing Director Artemis Ventures, LLC 1998 1

Bio § Engineer, entrepreneur, venture catalyst § 5 x entrepreneur, 2 IPOs, 3 M&A, $100 million raised in last 5 years § Venture Catalyst specializing in Enterprise software & Internet enabling technologies § 1 other partner Kimball Atwood Artemis Ventures, LLC 1998 2

Did You Know? Most business plans are never read by a VC partner? Artemis Ventures, LLC 1998 3

Artemis Ventures, LLC 1998 4

Did You Know? VC investments in Internet firms by 1 H 99 were over $6 billion -- nearly 2 x of 1998 TOTAL! Source: IDC Artemis Ventures, LLC 1998 5

Did You Know? The #1 reason a startup’s valuation is cut is an incomplete executive team Artemis Ventures, LLC 1998 6

7 Steps to A Compelling Business Plan & Financing Pitch Artemis Ventures, LLC 1998 7

Know the Risks to Address § § Financial Market Technology Team Artemis Ventures, LLC 1998 8

6 Things You Must Have § § § Stable, working business models Good business plan Competent management Great vision Big markets Good team Artemis Ventures, LLC 1998 9

Business Model Components § Markets & Customers v v v Profile and Segmentation Key Pain Points Size of the Problem in Dollars Location of those Dollars Competition § Products & Services v v Product Definition Value Proposition Total Cost Analysis Add-on Product Strategy Artemis Ventures, LLC 1998 10

Business Model Components (cont’d) § Marketing & Distribution v v Marketing Strategy Sales Process Implementation Process Strategic Alliances § Financial Engine l v v Pricing Model Revenue Model Cost Structure Artemis Ventures, LLC 1998 11

1 - State Credibility § Exec team l l l Pedigree (education, past startups) Publicity (published pieces, notoriety, awards) Connections (technology advisor to White House, etc) § Well-known board members, advisors (who are betting on this company) Artemis Ventures, LLC 1998 12

Who You Need On Your Team § Visionaries (assorted positions) § Leaders (CEO, Managers) § Implementers (Sales, Marketing, Technology) § Infrastructure Builders/Supporters (Operations) Artemis Ventures, LLC 1998 13

2 - Be Clear § Have 3 key points to deliver § Show and tell your story (use words AND pictures) § Repeat the 3 key points at least 3 times § Only tell stories that enhance your points Artemis Ventures, LLC 1998 14

3 - Be Concise and Complete § Why is this a great idea? § How will it be executed? § How will risk be minimized, return maximized? § What are the sustainable barriers to entry? § 20 page plan (3 -5 page exec sum with 1 page financials) Artemis Ventures, LLC 1998 15

Complete Means… § § § Pain/Solution Opportunity/Market Size/Market Analysis Competitors: today and tomorrow Product/Service Definition & Futures Marketing Plan/Sales Strategy/Strategic Alliances § The Team: staff and extended § Financials (create a dynamic model) Artemis Ventures, LLC 1998 16

4 - Be Compelling § This is a HUGE opportunity, we’re the best to seize it, here are 3 -5 specific reasons why § You think this opportunity is HUGE today? Check it out in 2 -4 years! § There is major PAIN, we remove it -no doubt § We have the team, technology, right market, “just add water” 1998 Artemis Ventures, LLC 17

5 - Give Them a Reason to Believe § Create the excitement (greed), then… § Convey the long term vision (wow! Look at all the additional markets we can get into!), then. . . § Spell out the short term practicalities (hey - these guys look like they could actually make this happen!) Artemis Ventures, LLC 1998 18

6 - Give Them the Right Info § What is your elevator pitch? In other words if you had to tell someone about your company on a short elevator ride, what would you say? § What product or service is sold? § Who is it sold to? § How much does it cost (average sales price)? Artemis Ventures, LLC 1998 19

Right Info Cont’d § How big is the target market? § What percentage of that market do you need to penetrate to reach $30 million in sales? § What is your key competition? § What is your KEY differentiation from the competition? Artemis Ventures, LLC 1998 20

Right Info Cont’d § How long would this differentiation last? § Do you have customers? How many? § Revenue? How much? § Strategic Alliances? With whom? § Is your technology complete? If not, when? Artemis Ventures, LLC 1998 21

7 - Present Properly § Practice and know it cold § Have backup slides for key areas (such as market segmentation, financials) § Be ready with a reference list (for all key execs, both personal and customer references) Artemis Ventures, LLC 1998 22

How Long Should a Pitch Be? § A VC pitch should be 20 minutes long (goal: book next meeting) § A customer pitch should be 30 minutes long (goal: convince them to bring the decision maker in) § A recruiting pitch should be 30 minutes (goal: check them out, sell the vision, decide next step) Artemis Ventures, LLC 1998 23

Rx for Not Naturally Born Speakers § Best speech coaches: Silicon Valley: Steve Mandel 408 475 8202 Boston: Cheever Communications 781 639 1516 Artemis Ventures, LLC 1998 24

Great Entrepreneurial Resources § Read “Burn Rate” - Michael Wolff § Read “High Tech Startup” - John Nesheim § Check out www. vfinance. com, www. startupweb. com § www. artemisventures. com resources section has growing library of goodies Artemis Ventures, LLC 1998 25

Entrepreneurial Resources Artemis Ventures, LLC 1998 26

Do You Have These? § § § § Right market Right product/service Right timing Right info Right priority Right connections Right team Artemis Ventures, LLC 1998 27

Thank You Q & A/Lab Time Christine Comaford General Partner and Managing Director Artemis Ventures, LLC 1998 28

Good Idea? Bad Idea? Your startup is HOT! You do 3 VC pitches and also get some fabulous press. 10 more VCs call you, and you book meetings with them. Artemis Ventures, LLC 1998 29

Good Idea? Bad Idea? You get 2 term sheets for a $3 mil investment both from 2 high value VC syndicates. One is for a $6 mil pre money valuation and 1 board seat. The other is for an $8 mil pre and 3 board seats. There a total of 5 board seats. You choose the $6 mil pre. Artemis Ventures, LLC 1998 30

Good Idea? Bad Idea? Your startup’s product/service is nearly ready for beta. You can take $1 mil to get through the beta, sign on a few customers, and make a few key hires, OR you can take $3 mil to do even more. With the $1 mil you’ll need to start fundraising again in 3 months, with the $3 mil you’ll start fundraising in 12 months. You take the $1 mil. Artemis Ventures, LLC 1998 31

Good Idea? Bad Idea? You have a skeletal exec team -operations and technology only. You’ll hire a CEO, sales, marketing and business development once you’re funded. You set aside 15% of your pre -financing stock for the option pool. Artemis Ventures, LLC 1998 32