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2014 | Book

The 12 Magic Slides

Secrets for Raising Growth Capital

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About this book

Author Paul Getty has seen thousands of brilliant founding CEOs present to angel investors, venture capitalists, and institutional investors. And he has seen thousands of them fail in their quest for the money they sincerely believed would lead to entrepreneurial success and riches for all. Again and again, he watched would-be tech titans fail to create a good first impression, deliver poor presentations, tell lengthy stories that put investors to sleep, and fail to address the critical issues sophisticated investors are most eager to hear about.

If only they'd read The Twelve Magic Slides: Insider Secrets for Raising Growth Capital. Getty's slide topics—developed while coaching hundreds of company founders to fundraising success—cover each of the twelve key themes investors want to know about in depth before they part with their hard-earned money: the problem you see, your solution to it, the resulting business opportunity, the amount of money you need to grow the firm, and the potential returns for investors, among others. Getty, managing director of Satwik Capital Advisors in San Jose, California, shows that properly developing each slide—and the thinking behind it—can get you the investment capital required to vault your company to the next level.

But The Twelve Magic Slides is more than a book about how raise money from professional investors. It presents a whole new way of how to think about and develop a successful startup. Regardless, it will show you better ways to accomplish your goals and increase the chances you’ll get the green light from investors.

Whether you are seeking startup funding from the angel down the street, or trying to convince investment bankers to help take you public, The Twelve Magic Slides provides a clear step-by-step process that will enable you to:

Identify the key elements of the business that must be developed to attract external capital Understand the critical dos and don’ts CEOs must know to sell their story to investors in a quick and efficient manner Create twelve perfect slides and a presentation that secures investor interest from the start and gives them plenty of reasons to write you a check You need to find money to fund your company’s growth. Investors need to find entrepreneurs and ideas they can believe in. The Twelve Magic Slides presents a proven method for attracting funds from angel investors, venture capital firms, private equity firms, and institutional investors. It will give you the knowledge and confidence you need to ask for—and receive—the capital you need to launch or grow a business.

Table of Contents

Frontmatter
Chapter 1. What Investors Want
Abstract
There are many types of investors and, at the risk of oversimplifying a complex topic, let me start with two categories: smart investors and dumb investors. That latter category includes, for example, friends and family. Dumb investors are not necessarily bad investors, since they have money and often very good intentions. They tend to invest based on fairly superficial criteria, however, including first impressions, their prior relationships to the CEO and key executives, and they tend to invest funds quickly, often without performing any significant due diligence.
Paul M. Getty
Chapter 2. Building External Validation
Abstract
In Chapter 1, I discussed the importance of including a discussion of customer validation in your investor presentations. To convince investors to back you, you need credible third-party confirmation that your solution is not just good but viable in the marketplace. In this chapter, I would like to go into greater detail on how this is best accomplished. To recap, I presented the following hierarchy of validation sources:
Paul M. Getty
Chapter 3. Identifying the Right Investors
Abstract
In late 2013, the time during which this book is being written, we are witnessing a renaissance of creative fundraising methods and options for firms of all sizes. With the passage of the 2012 JOBs Act, the Internet has been abuzz with literally hundreds of new ways of connecting entrepreneurs and investors, especially for early-stage investing. Predating the JOBs Act, firms such as Kickstarter, with their innovative prepayment funding approach, have ushered in and legitimized the process of using crowdfunding techniques to raise investment capital.
Paul M. Getty
Chapter 4. Venture Capital
Abstract
Every year, there are about half a million businesses created in the United States, and yet less than a thousand receive venture capital funding. Although this is a low percentage, the language and concepts used by the venture capital industry have come to dominate the fundraising process, regardless of the source of capital. It is therefore very important to understand basic venture capital concepts and how VCs invest, so that you can better tailor your presentation materials to any capital source.
Paul M. Getty
Chapter 5. The Elevator Pitch
Abstract
The first and perhaps most important tool in your presentation materials is the elevator pitch. In its most simple terms, an elevator pitch is a brief summary of your business that is developed to entice an investor to want to hear more. It is short enough to be told as you ride in an elevator with a prospective investor. Hence the name.
Paul M. Getty
Chapter 6. Steps to Building a Successful Investor Presentation
Abstract
Having developed and successfully used your elevator pitch to gain interest in next steps, you will need to prepare an appropriate slide presentation to go into greater depth about your firm.
Paul M. Getty
Chapter 7. Title Slide and Introductions
Abstract
Thanks to your persistence, you have secured a meeting with potential investors. The big day has arrived. You should be prepared with a professionally developed slide deck that you have memorized and rehearsed to the point that you do not need to refer to any notes. You should be so comfortable with the materials that—in a worst-case scenario—you could deliver an adequate presentation with no slides whatsoever.
Paul M. Getty
Chapter 8. Slide 1: Overview
Abstract
You’ve made a connection with your investor, noted anything out of the ordinary (such as someone you didn’t expect to be at the meeting), and told a good story. You have their attention.
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Chapter 9. Slide 2: The Problem
Abstract
Once you sense that your investors are OK with Slide 1 and that they remain interested, it is time to move on and discuss the problem that you are solving.
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Chapter 10. Slide 3: The Solution
Abstract
The Solution slide gives you the opportunity to explain your specific solution to the problem identified in Slide 2, and to explain and describe your overall business. Done well, you can accomplish both goals at once. In some cases, especially for start-ups, your solution is a description of the business.
Paul M. Getty
Chapter 11. Slide 4: Opportunity and Market
Abstract
The Opportunity and Market slide gives you another chance to build your credibility with the investor as you share your analysis of the market opportunity for your product. Remember, investors are looking for companies that address large market opportunities—typically $1 billion or more. Professional investors are also primarily focused on investing in firms that can attain revenues of $100 million or more within five years. Of course, you can expect them to be very skeptical of claims of a large market-size potential unless you can further qualify your ability to penetrate defined market segments successfully.
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Chapter 12. Slide 5: Technology
Abstract
Slide 5 (see Figure 12-1) provides an overview of your technology and intellectual property (IP).
Paul M. Getty
Chapter 13. Slide 6: Unique Competitive Advantages
Abstract
Slide 6, Unique Competitive Advantages (see Figure 13-1), is an important slide. Following the unique areas that you discussed in the Technology slide in the previous chapter, you now need to fill out the full scope of competitive advantages that you believe will help you win new customers and grow your business.
Paul M. Getty
Chapter 14. Slide 7: Competitive Landscape
Abstract
The Competitive Landscape slide (see Figure 14-1) summarizes how you are positioned against your current and potential competitors. It also provides an opportunity to demonstrate your knowledge of the overall marketplace and help convince investors that you have sufficient expertise in your area.
Paul M. Getty
Chapter 15. Slide 8: Go-to-Market Strategy
Abstract
Slide 8, which describes your go-to-market strategy, tells investors how you plan to capture market share and grow your business. Even if you are not ready to launch your product, it is important to show your understanding of future sales and marketing strategies to establish that you, as CEO, have a comprehensive understanding of how to best generate future revenues.
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Chapter 16. Slide 9: Financial Road Map
Abstract
An active professional investor receives hundreds of funding proposals a year, with many showing an average of more than $100 million in sales by Year 5. And most entrepreneurs state that their projections are conservative. As mentioned, if you are pitching a risky technology deal, $100 million is the amount that investors want to see. As a result, that’s the amount that they do see, including on your own Slide 9, the Financial Road Map.
Paul M. Getty
Chapter 17. Slide 10: The Team
Abstract
The process of presenting the team often begins well before a first meeting. Prior to a first meeting, professional investors may visit your web site and look at the general backgrounds of your team members. They may also check with their colleagues or other investors to learn more about the backgrounds of your key executive staff members. The pre-screening process is made even easier these days through the use of social networking sites such as LinkedIn and Facebook.
Paul M. Getty
Chapter 18. Slide 11: Current Status
Abstract
Like the other the slides, Slide 11, Current Status (see Figure 18-1), is important. There are three important objectives to accomplish with this slide:
Paul M. Getty
Chapter 19. Slide 12: Summary
Abstract
Remember, the primary objective of the first meeting with investors is to get a second meeting. Your goal in the Summary slide is to continue the positive momentum that you have established, while providing added due diligence and developing rapport with the investor. In this last part of the presentation, you want to do the following:
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Chapter 20. Backup Slides
Abstract
Since you can never be sure how an initial presentation may go, it is important to prepare backup slides that support the 12 Magic Slides. Before we discuss typical backup slides, let me offer a few words of caution:
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Chapter 21. After the Meeting
Abstract
The meeting has now ended. You have a good feeling about investor reaction to your presentation. They expressed interest in following up and have asked for additional items, which you believe is an indication that they wish to continue their discussions with you.
Paul M. Getty
Chapter 22. Building the Executive Summary
Abstract
The successful outcome of your initial 12 Magic Slides presentation gives the green light to go forward with the other materials required to close your funding round. Your 12 Magic Slides put you in good shape to complete these remaining materials. And with the tough job of obtaining at least some solid investor interest behind you, you are now ready to shift resources and move on to other necessary items.
Paul M. Getty
Chapter 23. You Got a Deal! Or Not…
Abstract
Congratulations on completing the prior chapters! I hope your investment of time in learning how to present the 12 Magic Slides will prove to be very profitable now and in the future. (Remember, this format works at any fundraising step, from start-up to IPO.)
Paul M. Getty
Backmatter
Metadata
Title
The 12 Magic Slides
Author
Paul M. Getty
Copyright Year
2014
Publisher
Apress
Electronic ISBN
978-1-4302-6485-9
Print ISBN
978-1-4302-6484-2
DOI
https://doi.org/10.1007/978-1-4302-6485-9