Guest post from Michael Price posted from www.connectedwest.org 

Email: michaelprice@connectedwest.org or call 720-515-7581

By Michael Price, Executive Director of the Coalition for a Connected West

Something pretty special has been brewing in Colorado recently.  It’s no secret that Boulder has become the next tech diamond in the rough—landing the top spot as a hot hub for new tech startups, other tech talent and private investment.  At Coalition for a Connected West, we sense a refreshed and serious commitment by Colorado’s lawmakers to work with the Coloradans to ensure the right regulations are in place to support expanding connectivity and flourishing innovation and private investment.  That’s why we took the opportunity to bring thought leaders, techies, and lawmakers together at the state Capitol to talk about hot legislative issues and business needs to create a more business- and tech- friendly environment in Colorado.

Last week, the Coalition for a Connected West joined the Colorado Technology Association (CTA) and Built In Denver to host “A Day at the Capitol.”  It was an opportunity to celebrate Colorado’s culture of innovation and establish a direct dialogue between policymakers and the technology community.  Nearly 200 tech leaders attended the event, which included some of Colorado’s top thought leaders in technology, all dedicated to creating connected and thriving business and tech communities in the state.

 

[Watch the  YOUTUBE VIDEO of CTA Day at the Capital Event]

Erik Mitisek, the newly announced CEO of the Colorado Technology Association and member of CCW’s advisory board, set the tone:

“Technology is the center-pivot that really is going to fuel innovation, efficiency and allow our state to be competitive in ways that we haven’t even thought of yet.”

On behalf of our partners, I moderated “Innovation and Growing Technology Companies,” a panel discussion featuring Colorado’s leading entrepreneurs and Wyoming State Senator Cale Case.  The engaging panel included Peter Hudson, CEO of iTriage; Tom Higley, CEO of Vokl; Brian Pontarelli, CEO of Inversoft; and Will McCollum, Denver General City Manager at Uber , who discussed the ingredients that lead to growth in the technology industry.

Photo credit: Inversoft
(Left to Right) Peter Hudson, CEO of iTriage; Michael Price, Executive Director of CCW; Tom Higley, CEO of Vokl; Brian Pontarelli, CEO of Inversoft; WY Sen. Cale Case; Will McCollum, Denver General City Manager at Uber.

The general consensus was that innovation needs space to thrive without burdensome regulations that could slow it down.  We also emphasized the need for Coloradans to be more involved in the policymaking process.  CCW is about generating a dialogue between the IT community and the policymakers that affect our lives and businesses.

Andrew Romanoff, former speaker of the Colorado House of Representatives, gave a presentation on how the legislative process works:

“I’m glad that you are taking the time to lift the lid on the Golden Dome and see what goes on underneath because I think it’s the only way, the best way to make this process as responsive and accountable and transparent as possible.”

During the event, the Colorado General Assembly was in the midst of the final days of the Legislative Session. Several important measures that would impact the technology community were being considered, including HB 13-1255.  The bill, authored by state Rep. Angela Williams, would create an environment conducive to encouraging investment in IP-based communications networks.  These next-generation networks are necessary to support the data-heavy traffic generated by devices like smartphones and tablets that have become central to our lives and our economy.  Similar legislation passed in Wyoming, which Sen. Case brought up during the panel discussion as a way that states with rural communities like Wyoming and Colorado could use to send a signal that they are open for tech business.

While the legislation passed unanimously in the State House (62-0), it is currently pending in the State Senate.  CCW and CTA are calling on Coloradans and members of the tech community to reach out to their senators and ask them to support the legislation.

Click here to take action!

CCW would like to thank CTA and Built In Denver for working with us to create a better future for Colorado and hosting a great event!

 

Dear reader,

This is the fifth of many blogposts in a series that I’m calling the Investor Pitch Deck Series. I am creating a post about each investor pitch slide, why it is important, the common errors, and how to communicate that you have what it takes to achieve your goals for this company.

Posts in this series

(note, this is NOT a suggested order for sides in your deck)

 


The mantra for this series is, “Above all, make sense.”


 

The Problem Slide

You can convey more information in the discussion of the problem than with any other single topic in your deck. Your company, and presumably your game-changing technology, product, or service was created to solve a pain point for someone. In your discussion of the problem, investors will be listening for hints that this problem is worth solving, that someone is willing to pay to have it solved, and that there are enough of those people out there to support a viable business.

Interestingly, your goal here isn’t to talk about the problem in detail.

If you have years of data that suggest nurses spend an alarming amount of time filling out paperwork and not enough time treating patients, then say so with a single graph. Then, move on to tell your audience how much time and money it costs one hospital, or a conglomerate of hospitals, or the whole nation each year for nurses to get their paperwork done. These staggering numbers will support the notion that you are dealing with a potentially ginormous problem.

The fundamental point of your problem slide is to illustrate that you are able to solve a huge problem that will be supported by customers with the money to pay for your solution.

 


Cringe Factors

Cringe Factor #1 –  You go into detail on the limits of the current technology.

Why this makes us cringe: This would be appropriate in an industry specific talk where everyone in the room can follow the oh-so obvious problems associated with the use of a reversed biased p+-n junction. But in mixed company, you must speak plainly or you risk losing important people.

How to do it right: Stick with an eight grade understanding of your industry technology when speaking to a mixed audience. Think PBS special. Even though you might be surrounded by very smart people with PhDs, MBAs, and MDs, they probably have not kept up with the fundamentals of your specific industry and will be a little overwhelmed with an in depth tech talk. Further, the point of your investor pitch is not to discuss the technology, but to discuss the deal. Remember, everything you talk about in an investor pitch comes back to money.

 

Cringe Factor #2 – The problem is oddly specific

Why this makes us cringe: If you solve a pain point for for a very small group of people, then your business seems limited from the start.

How to do it right: If your technology helps a small group of people (women over 6’4″ tall who drive small cars), then you will have to show that your company is actually a platform for future technologies that all add up to a large target market. The Problem is a fundamental basis for your business plan, but a small initial market doesn’t have to sink your company. It’s the messaging that is important. When the long limbed ladies represent an initial market and the rest of all American car divers represent your larger target market, you will be fine.

 

Cringe Factor #3 – Your technology is in search of a problem

Why this makes us cringe: This is a notoriously common problem with products that come out of universities. The research is so cutting-edge that the technology created actually precedes the need for itself. If you invent a hammer, but the world has not yet invented nails, you will have some trouble selling that hammer.

How to do it right: Most technologies can have alternate uses. You will have to identify a marketable use for your technology (or a subset of your technology). Look for big markets with a lot of money involved. You will absolutely have to call people or meet with the folks experiencing the pain point before you can claim that your technology will help them. Really understand the problem before you go forward with developing the technology into a product.

 

Cringe Factor #4 – The problem is big, but poorly supported by capital.

Why this makes us cringe: There are very large problems in this world that are not well funded. Clean water is a big one. Poverty, child abuse, malnutrition, etc. Unfortunately, the biggest problems in this world do not have payers attached to them.

How to do it right: You must show that someone is wiling to pay for the solution that you put forth. If your company cannot show that someone will pay for the product or service you provide, then you cannot claim to be able to return money back to the investors. Instead of investors, you should seek grants and philanthropists. Problems with a significant social impact do not have to be poorly funded. If you are creative, you can find a way to many many problems lucrative enough to pursue.

 


 

The problem slide should most likely be broken into two or three slides that handle the three sides of the problem. The slide to the right helps us understand the fundamental safety importance of identification in a hospital setting.

  • Outline the problem so the audience gets it
  • Show data supporting the size, extent, or number of people affected by the problem
  • List a few financial figures suggesting the potential return on investment for the customer to stop doing things the old way and switch to your product.

 

 

Article by Nicole Gravagna, PhD, Director of Operations for the Rockies Venture Club as part of a series on the elements of an investor pitch deck. The next in the series is the Customer ROI Slide.

 

First Post by Sara Rodriguez-Lopez

For those (many) who don’t know me, I moved a few months ago to Denver where I began to volunteer at the Rockies Venture Club. After only 3 months I met a lot of interesting people and learned about so many different things that my head was ready to explode!

I earned my Master’s in entrepreneurship and I did start my own company in the past, but it was at RVC where I got to see, for the first time, how Angel investors work. Eventually, I thought “Ok, I got it! I’m starting to see the big picture” until Nicole Gravagna invited me to Pat Linden’s Anti-dilution class!

Anti-dilution, now that’s tricky stuff!

A couple of days before the class I started reading about anti-dilution… oh boy!!! Full ratchet, narrow weighted average, broad weighted average, pay to play…This stuff really made my head spin…  At the end, I think I ended up having a “more or less” clear picture about the anti-dilution provisions… So, here I am writing down what I learned (just the basics… very basic) and hoping this blog-post would help someone out!

 

What is dilution?

Dilution is the subsequent sale of shares of stock at a price per share less than that paid by the preceding investor. Therefore, to protect their rights investors usually include an anti-dilution clause in the term-sheet.

If you are an investor you may be wondering now: why when the shares are sold at a higher price it’s not considered dilution if my ownership percentage will be reduced?  Because, although it is true your ownership is being diluted, the increment on the share price implies that the valuation of the company went up. As a result, the overall value of your investment increased and you should be happy. Cool! First thing clear!

 

What mechanisms can be put in place to avoid investment dilution?

There are two main formulas:

A. Weighted Average Formula: is the most common approach to anti-dilution protection and calculates the price considering the price and the amount of money previously raised as well as the price and amount of money being raised in the subsequent dilutive financing.

There are two primary variations of this formula that are basically differentiated by what constitutes “issued and outstanding common stock”

a.1) Broad based: the term “issued and outstanding common stock” includes all shares of stock outstanding, common and future stocks.

  • For Founders: This is the anti-dilution clause more “company friendly” and also the most customizable one, many investors will agree upon this formula.

a.2) Narrow based: the term issued and outstanding common stock” includes only the common stock issuable upon conversion.

  • For Investors: Narrow based is the most beneficial for you since this formula provides a higher conversion rate than the broad based.

B. Full Ratchet: “when the conversion price of the preferred stock outstanding prior to such financing is reduced to a price equal to the price per share paid in such a dilutive financing” or in other words: if you bought a share per $1 and the new price is $0.5 the conversion rate is two. For each of the “old” shares you get two of the “new ones”. Under this formula it doesn’t matter if the company raises $20,000 or $200,000,000

  • For Founders: awful, no matter how you look at it you don’t want to be here (it seriously jeopardizes your ability to raise money from new investors).
  • For Investors: it is a great deal and the most protective clause you can get, but be careful in this way you can lock down the company to future investors.

 

Is there something the company can do to mitigate the cons of an anti-dilution provision?

One of the most common clauses that companies usually include in the term sheet in order to protect their rights is the “Pay To Play”  clause that provides anti-dilution protection only for investors who will participate in the next dilutive finance. With this formula the founders incentive their investors in keeping on investing in the company and therefore, avoid some the major problems of the Full Ratchet (It can also be incorporated in the Weighted Average Formula).

 

Is there something else that helps reducing the dilution risk?

Yes, having the “right valuation” can be, for both the entrepreneur and the early investor, the best measure against dilution. Why is that? Well, the answer comes easy, having a feet-on-the-ground valuation will avoid the issuance of future stock at a lower price as well as will save money in lawyers exercising crazy clauses in crazy terms sheets. I know, valuation is hard but definitely something worth spending some time on.

 

There isn’t a better contract than the one based on trust and transparency

Founders: the Investor is now part of your team (and you aren’t giving anything away).

Investors: the founders love the company and more than anyone they want the company to succeed… they don’t want to run with your money away!

Guys, let’s work together!!

 

So…I started writing this post for my own sake, it isn’t perfect and it doesn’t cover all the points but I think now I really understand what is anti-dilution and hopefully you do too.  Now time for a “fat tire”! Hope you enjoyed your reading 🙂

 

Further information at: http://www.stanford.edu/class/e145/2008_fall/materials/The%20Venture%20Capital%20Anti-Dilution.pdf

If you came to the Colorado Capital Conference last October you may have seen Governor Hickenlooper’s keynote address. Hick’s good friend Steve Foster gave the introduction. At the time, Steve Foster was the CEO of the Colorado Technology Association. Steve Foster stepped down earlier this year to take over as head of GTRI. Now, after a short executive search, Erik Mitisek has been named the new head of CTA.

Mitisek has been associated with the startup world in Colorado for a long time for such a young man. Most recently, he’s been a driving force for grass-roots operations such as Startup Colorado, Denver Startup Week, and BuiltIn Denver.

This news of Mikisek as the head of CTA should put your mind at ease for a bunch of reasons. First of all, the CTA is the largest and most influential technology association in the state. Aside from networking and business-connecting activities, CTA works to guide public policies that affect technology businesses in Colorado. Since technology moves so quickly, it’s very hard for legislators to keep up with all the new opportunities on the horizon. Laws can hold back startups and larger businesses without meaning to. CTA opens the line of communication so that our state legislature paves the way for technology instead of standing in the way.

One of the biggest issues that faces Colorado is that of attracting companies to Colorado and retaining them once they grow. CTA supports the policies and initiatives that draw national attention to our state as a place where businesses thrive. By educating home-grown STEM talent in Colorado, we foster the ecosystem of growing technology companies. CTA is also highly supportive of initiatives that improve access to capital which is something we think about all day here at Rockies Venture Club.

Mitisek is a highly capable leader who genuinely cares about businesses in Colorado. He has an impressive resume including two stints as CEO (Next Great Place, and Claremont Information Systems) and was recently named one of Colorado’s 25 Most Influential Young Professionals by ColoradoBiz Magazine. Don’t even bother being impressed yet because this is only the beginning.

On Mitisek’s watch, CTA will become fundamentally integrated into the fabric of Denver. He will do exactly what he does best–connect grass-roots everyman needs with the administrative efforts of the state government and non-government community leaders. He will help focus the funding power of local foundations who state in their missions a desire to support economic development.

Most of all, Erik Mitisek will remind us that technology is not just for the proverbial software engineer. We all carry a powerful computer in our pockets everyday. We all need to understand how technology can help our businesses market products better. We all need digital security and data storage for our personal information, photos, address book, and recipes. We are all technologists. There’s no more denying it.

Write your well-wishes to Eric Mitisek (or the tasks you want him to handle first) in the comments and I’ll pass them on to him.

More coverage here:

 

Article by Nicole Gravagna, Director of Operations for the Rockies Venture Club.

 

 

An original guest post by Jay Holman, Principal of Venture to Market

101010Denver

Update: Get information about 10.10.10 on 101010denver.com

10.10.10 will Bring Big Problems to Denver

Entrepreneurs have a unique ability to see opportunity in the problems others face, and they are irresistibly drawn in by the desire to create, and sell, solutions to those problems. This is the guiding principle behind the upcoming 10.10.10 event in Denver, which will bring 10 would-be CEO’s to town for 10 days to brainstorm solutions to 10 big problems. The goal is not just to see if participants can come up with feasible solutions to the problems, but to go beyond that by turning one or more of those solutions into successful startups led by members of the group.

The brainchild of Denver entrepreneur and Vokl founder Tom Higley, the 10.10.10 is an experiment to see whether the creative genius that leads to startup success can be reproduced in a laboratory environment. Along the way, the event will highlight the positive business climate and culture of the Denver area, which was already given a boost recently when the SBE Council named Colorado one of the 10 most entrepreneur-friendly states.

The 10.10.10 is not a business plan competition; instead, it is about collaborative business plan creation. When CEO level entrepreneurs apply to participate, they will identify a problem they’d like to discuss with the other participants. They won’t suggest a solution in their applications; those suggestions will come during of a 10-day working session in Denver during which all 10 participants work on all 10 problems. If a feasible path to a solution emerges for one or more of the problems, it will be developed into a business plan.

The focus will be on big problems, as bigger problems lead to bigger opportunities. Since a primary goal for this exercise is to start one or more profitable businesses, applicants will need to provide proof that large companies or groups of consumers are willing to pay for a solution to the problem the applicant describes. That means charity projects are out (sorry Jimmy Carter, but if all goes well the participants will be in touch after their exits).

So, will it work? Like any experiment, or any startup for that matter, 10.10.10 has its risks. 10 days is not a long time to come up with a solution to a major problem, and participants won’t have much of an opportunity to gather additional information to flush out the details of their proposed solutions. Lots of problems seem easy to solve until you look at the details; hence the ubiquitous pivot.

However, there is something to be said for taking a step back, putting your head together with a group of smart people with access to capital, and looking for good opportunities that others have missed (I refuse to use the term “low hanging fruit”). How many times have you asked yourself, “why didn’t I think of that?” after you see someone strike it rich for rebranding off-the-shelf paint as liquid paper or repurposing a small box as a humane mouse-trap? There are so many solvable problems out there that I think a group of successful entrepreneurs with resources should be embarrassed if they don’t knock a few off and make a bundle in the process. Just don’t forget Jimmy on your way home from the bank.

Jay Holman is Principal of Venture to Market LLC, a Boulder based consultancy providing go to market services for new ventures in the cleantech industry.

101010 Denver 101010Denver

 

 

 

Fundraising in all its forms is about three things: having a reputation for excellence, developing true friends, and accepting failure.

Getting people to give you money is one of the hardest things on the planet. Ask anyone to give you clothing, food, time, a couch to sleep on, or their car for the day and you will likely be more successful than if you ask for money. Don’t be mistaken, it’s not about the value of the money. Frankly, time is our most precious resource. Yet, people seem very willing to offer their time. The scarcity of the resource doesn’t seem to matter.

Cash money has a universally defined value. One US dollar equals 0.76 Euro, 54.56 Rupees, and 6.38 Kronor. Across the planet, we can all agree how much our currency is worth in relation to other currency.

Applying cash value to the value of goods can get a little tricky. A watch is not always $50. You can pick one up for $14.99 at Target. Or you can get a real deal–save $43,355 on a blinged out Rolex on sale for $439,995.

Reputation for Excellence

What’s the value in the Rolex Oyster Perpetual GMT-Master II Ice timepiece versus the Merona round face watch with changeable strap? I’m going to venture a guess that it isn’t the sense of peace you feel when you walk onto a crowded subway wearing it.

It also isn’t really about the way the watch looks. I have an expensive watch that was given to me as a gift. It was a hand-me-down from someone who can afford the luxury of an expensive watch, two actually, since I gained ownership of this one when they bought a new fancier version. I’m not known for my lavish income and I’m guessing that people have no idea that it’s expensive. To that point, the Rolex serves to reinforce a person’s brand, not create it. A poor man wearing a Rolex looks like a poor man with a knockoff. However, for the right man, the Rolex Oyster will serve to reinforce the idea that he is doing very well indeed.

This brings me to my first point about fundraising. Rolex has developed a reputation for excellence. The value of a  Rolex is higher than that of Merona which has a reputation for affordability. Those who shop for Rolex don’t question whether the particular watch is worth the price tag (of course it isn’t). They are paying for an item that will support their personal brand.

Whenever you are fundraising, you have to have the reputation for excellence so that the person giving you money will feel as though you are supporting their personal (or business) brand.

Make True Friends

Sometimes you will get very lucky and a random person holding cash will knock on your door to tell you that they want to give you the money. Ok, you’re right. That never happens.

You must create a relationship with a person (or institution) before you can ever hope to get money out of them. Apply this in your head, right now across all the situations where people exchange money.

  • Customers want to know the business and product will be around for a while and that they can depend on it.
  • Donors want to be (or feel) involved with the mission and activities of the organization.
  • Investors want their money back in 5-7 years, and they want to have a successful portfolio to chat about at cocktail parties.

Think about it on a personal level. How often do you buy a brand you’ve never seen or heard of before? How many charity causes have you given money to? Let me guess, someone you knew was running a race or otherwise raising money for the charity and you gave to support Breast Cancer research, but deep in your heart, you gave because you wanted to see your friend happy.

Investors give money to the people they like. They have to qualify their investments by calculating whether the investment has the possibility of making them a lot of money. But it’s not the future trips to Tahiti that make them sign the check. It’s the knowledge that they get to be involved in the company as it grows, if only to drop knowing comments about the company’s burgeoning success to their friends.

You can get a lot closer to your fundraising goals by developing real relationships with the people who can help you access capital. I’m not talking about the, “let’s do lunch” schmoozing stuff here. I’m talking about remembering birthdays, being genuinely curious about how someone’s child did in their big soccer game, and really enjoying the person for reasons that have nothing to do with money.

Learn to accept failure

Failure is almost as complicated as money. When you fail, you feel way more miserable than the failure should actually feel. A failed marriage can bring an otherwise successful person to disability and depression for a year or more before they buck up and move on. Getting fired, losing a big account, having a stock portfolio crash, all these things make people feel worse than the failure actually requires. In short, we are very bad at getting over it.

When you ask someone for money and they say no, you might feel terrible. You stuck your neck out and got rejected. You might even feel like cutting ties with them. They clearly aren’t supportive. Right? To be clear, a no is not a rejection. It’s not a failure, it’s an open ended sentence…. It’s a relationship that you need to build before you can get to the possibility of a yes.

I guarantee if you try to raise money for anything, you will hear more nos than yeses. Accepting that as a part of the process will make fundraising much easier.

 

 

 

Guest Post by Jay Holman, Principal of Venture to Market LLC

Recently declared the third most investable startup at the 2013 Angel Capital Summit, Boulder based Swift Tram wants to revolutionize public transportation by taking it high above the streets. The company envisions riders zipping along in suspended coaches 20 feet off the ground, gliding unimpeded over traffic jams, accidents, and icy roads to reach their destinations quickly and predictably. And, perhaps best of all, Swift Tram expects construction of its routes to cost less and take less time than adding light rail or bus lanes to existing travel routes.

With such an attractive set of benefits, observers could be excused for wondering why no one has gone down this road before. In fact, they have: a suspended coach system (also called a suspended monorail) built in Wuppertal, Germany in 1901 is still running today. More recently, Siemens completed one in 2003, and Aerobus is supposedly building one in Weihai, China, but its current status is unclear. However, despite these examples and a number of others not listed, suspended coaches have played a very minor role in public transportation to date.

What makes Swift Tram different? According to Founder and CEO Carl Lawrence, it’s the cumulative effect of many recent technological advancements all incorporated into a new, modern design. Swift Tram has filed two provisional patents covering advancements intended to, among other things, improve the speed, efficiency and reliability of suspended coach systems while reducing operating costs. Understanding the company’s innovations first requires a general explanation of their new approach to an old method of transportation.

The Swift Tram system consists of coaches suspended beneath large tubular guideways that are supported by regularly spaced towers (see image above). Drive bogies travel through the inside of the hollow guideways and connect to the passenger carrying coaches beneath them through a channel that cuts through the bottom of the guideways (see image below). The bogies are the true heart of the system: they contain motors powered by electricity delivered through the guideways, and house the intelligence that enables the fully automated system.

The bogies will be designed to carry the coaches at average speeds of 45 to 75 mph, and will be fully automated, so no driver will be required in the coaches. The ability to operate without drivers is key to the operational efficiencies Swift Tram is counting on to make its approach economical. Not only does it allow the company to save the labor costs associated with drivers, but it significantly reduces the overhead associated with running smaller, more frequent coaches. By running coaches more frequently Swift Tram would reduce wait times for passengers, leading to happier passengers and, ideally, increased ridership.

Efficiency gains in the bogies would come from incremental improvements over historical designs, such as the use of regenerative braking and smaller, more efficient motors. At the system level, smaller motors would enable smaller bogies and smaller guideways, cutting construction and material costs. Swift Tram plans to pursue additional system level efficiencies by designing smart bogies that can coordinate their activities to minimize power draw system wide. In addition to using less electricity than traditional suspended coach drive mechanisms, they also would reduce the size of the electric grid required to support the system, again cutting construction and material costs.

By incorporating these and other design improvements drawn from recent developments in the smart grid, electric vehicle, and related industries, Swift Tram hopes to pull together a system that overcomes the challenges that have slowed widespread adoption of suspended coaches to date.

Currently, Swift Tram is focused on establishing the partnerships it will need to realize its vision. The company plans to manufacture the drive bogies, outfit the coaches, and develop the software for the control centers in-house, while manufacturing and construction of other system components will be outsourced. An in-house prototype of the bogie is under development, and Swift is raising a $1M seed round to support the engineering design of the total system. The company anticipates raising a couple of additional rounds to support prototyping, testing, and manufacturing before it sees initial revenue in 2016.

If Swift Tram is successful in helping public transportation rise above the fray, the ramifications could be significant. Metropolitan areas all over the world suffer from severe traffic congestion, and a cost effective solution that reduces travel time without adding to the ground-level footprint of transportation infrastructure has a lot of appeal. The array of approaches to suspended coaches that have come and gone without catching on provide a testament to the challenges Swift Tram faces, but if the company overcomes them it should find lots of riders who have been waiting for a better transportation option. Waiting in traffic jams, waiting for trains that aren’t scheduled to arrive for another 30 minutes, and waiting for buses that should have arrived 10 minutes ago.

Jay Holman is Principal of Venture to Market LLC, a Boulder based consultancy providing go to market services for new ventures in the cleantech industry.

 

We hear from a lot of companies who request our staff time to have coffee. It’s a common getting-to-know-you routine here in Denver as in many other towns. We used to be able to do this regularly, but as our investment numbers reached $15M in 2012, and the word got out that companies can get funded through RVC, we simply don’t have time to drink that much coffee!

Included in RVC’s mission is an important bit about helping entrepreneurs attain their goal of meeting angels. Sorry, we cannot simply send you a list of angels email addresses. Apply to pitch!

[pullquote align=”right” textalign=”|right” width=”30%”]We are a non-profit, and we really are here to help. Please check out our resources first, then come to us with your remaining questions. [/pullquote]

On a daily basis both Peter and I get between 1 and 8 emails from companies who want to get involved or get noticed by investors. I’m not even counting Linked-in messages. I don’t know how Peter feels, but I get a pang of guilt every time I have to tell an entrepreneur that I can’t spend an hour at a coffee shop telling them how RVC works. I wish I could!

What a grand luxury it would be to walk each company through the RVC process. We’d have to raise our event prices to exorbitant rates to get that kind of people-power. We are lucky to get more deal-flow than some of the local venture capital offices and it’s hard to directly meet with each person who wants information.

We are a non-profit, and we really are here to help. Please check out our resources first, then come to us with your remaining questions.

We post information on this website guiding you along. Read Peter’s 12 Ps of preparedness, find out why we charge pitching companies for their tickets at conferences, read the ongoing Investor Pitch Deck Series, or what happens after you pitch to investors at RVC. If you still have questions, feel free to send me an email nicole@rockiesventureclub.org so I can point you in the right direction.

There are four ways that entrepreneurs can get positive RVC attention:

  1. Read up on our process. (see links above) Requesting our undivided staff time to tell us about your company isn’t really fair until you’ve done your own homework on us so you know if we can help you.
  2. Take the self-assessment so you know what your company’s strengths and weaknesses are. BE HONEST. No company is perfect. Find your opportunities for improvement.
  3. If you are ready to raise money, apply to pitch. There is no way around this. We need your company’s information in a standard format so we can use it in investor meetings. If you don’t fill out the application, we will be looking at a blank form when your name comes up on the agenda.
  4. Come to events!  We have events all the time – between classes, pitch meetings, and mastermind meetings, there are a lot of ways to show us your face. Besides, you should probably get to know the community if you expect to ask for money.

 

 

Dear reader,

This is the fourth of many blogposts in a series that I’m calling the Investor Pitch Deck Series. I am creating a post about each investor pitch slide, why it is important, the common errors, and how to communicate that you have what it takes to achieve your goals for this company. This is the fourth in the series and it’s about your final pitch deck slide. The Final slide, Fourth post, and it’s March. Get it?

Posts in this series

(note, this is NOT a suggested order for sides in your deck)

 


The mantra for this series is, “Above all, make sense.”


 

The Summary Slide

This is the slide you put last in your deck. Your final slide. The MOST important real-estate of your whole deck because it’s the first thing that your audience will see after you have completed your amazing pitch. Your audience just spent 5, 10, maybe even 20 minutes watching your mannerisms, hearing your voice, feeling your message, probably all for the first time. They are in a bit of a daze. Even if they zoned out during your pitch, when you beseech the audience for feedback, they tend to tune back in. With the single word, “questions?” lost audience members snap back to life.

Heads snap up, hearts feel guilty because they missed the last three slides. They might whisper to each other, “How much is he raising?” “Any patents?” “Did they say they were local?”

Your job is to answer those questions and keep them engaged during Q&A. I’ve seen two great ways to do this.

  1. You can create a summary slide with all the highlights of your deal including the ask, your patents, contact info, team info, major partnerships, or whatever makes your deal amazing.
  2. Or you can play a slideshow of your deal highlights that will play on behind you as you answer questions.

TrekPak, for their pitch at the Angel Capital Summit 2013, compiled their customer satisfaction into a beautiful slideshow. Each slide was a tweet from a real customer paired with a high resolution photo (provided by the customer) of the TrekPak hardware storage product in use. This simple slideshow acted as a 20-foot tall poignant declaration of success. The audience instantly understood that the company is selling their product. Customers are using the product and are happy enough to take pictures and tweet about it. That’s traction, my friends.

Cringe Factors

Cringe Factor #1 –  Your slide just says “Questions?”

Why this makes us cringe: This is a huge waste of a slide. You have a chance to grab the audience by the horns and engage with them in some valuable Q&A and you are trying to inspire them with the word “Questions?”. Yawn!

How to do it right: Inspire, engage, at the very least – inform. Choose something that you didn’t have time to convey in the pitch proper and really hit the audience over the head with it graphically. TrekPak knew that the two founders look young and it was important to convey their company’s traction. Another company might choose to focus on the powerful partnerships they’ve made, or to reiterate the strength of the team, or the pizazz of the marketing strategy.

Cringe Factor #2 – You’ve put only your contact information on your slide.

Why this makes us cringe: It’s better than the word “Questions”, but not much. Use your real estate!

How to do it right: If you want to keep it simple, create a static slide broken into 4 or 6 squares. Put the highlight information about your deal on that slide. Imagine the audience members lifting their phones in synchrony to take a picture of your final slide. This is the slide they can refer back to when they talk about your deal with other investors or their spouse later in the day. Your highlights are different than those of the company pitching before you so I can’t tell you exactly what goes on this slide. Intellectual property protection, sales to date, FDA approval, team years or experience, a photo of your product, the ask, other details about your deal, potential 5 yr ROI (be careful), your Fortune 500 mentor, time to break even. Spend an hour with your team to determine which are the most exciting parts of your company.

Cringe Factor #3 – You dash off the stage when no one attacks you with questions

Why this makes us cringe: You are missing whole minutes of opportunity to connect with the very people who can give you the resources your company desperately needs.

How to do it right: It’s the rare audience member that is squirming in their seat to ask a question. Audience members are listening, dozing off, complacent, and protected by the anonymity of being an audience member. They might be curious, but it takes a little time to form a question and raise a hand. Give them a minute. Count to ten in your head slowly. If they still haven’t come up with something, then have a question ready. Say, “I bet you are all wondering about our marketing plan. Here’s why we think it’s a strong plan.” I don’t care how blank their faces are. Keep sharing details about your company and your deal. Know your time limit for Q&A before you get on the stage – then use it all.

I searched the world wide internets and could not find a single example of an information-rich final slide. Having one seems like a BIG way you can stand out from all the other pitches at your next entrepreneur pitch event. Use the real estate!

I made this silly joke final slide to illustrate my point. My fake team is awesome, David Ducovney, Alicia Silverstone, Bill Clinton, and Bill Gates. What could do wrong? Haliburton has promised to acquire us in a few years and in the mean time, investors get free trips to Oahu for board meetings. Investors, you better make sure your stock contains voting rights so you need to be in those meetings!

 

 Article by Nicole Gravagna, PhD, Director of Operations for the Rockies Venture Club as part of a series on the elements of an investor pitch deck. The next in the series is The Problem Slide.

Guest Post by James Lester, Managing Consultant with Cleantech Finance

When investors, policy makers, and the media discuss the best ways of reducing greenhouse gas (GHG) emissions that cause climate change, most attention is paid to increasing renewable energy and reducing the usage of fossil fuels. A key driver of climate change that is often overlooked is tropical deforestation, which accounts for nearly 20 percent of global GHG emissions. These native forests act as global carbon sinks (they absorb carbon emitted by energy production), but rapid deforestation in tropical regions due to unsustainable timber harvesting, farming and livestock practices in developing countries have devastated natural forests, reducing the ability of the planet to absorb emitted GHGs.

CO? Forestry Corp, a Colorado-based developer of sustainable forestry and carbon offset projects, is addressing this critical area, a relatively low-cost target sector for emissions reduction. CO? Forestry is deploying investment capital to design, plant, and manage Brazilian eucalyptus timber assets, and develop marketable and verifiable carbon offsets for sale to strategic partners. Its founder, Reed Pritchard, has over 25 years of experience in commercial real estate and renewable energy project development. The company has purchased high quality, Verified Carbon Standard (VCS) carbon credits developed in the Peruvian Amazon and recently announced a partnership with Ride the Rockies, a hugely popular annual bike tour through the Colorado mountains. Ride the Rockies will use the carbon credits from CO? Forestry to offset its carbon footprint and highlight the tour’s sustainability efforts.

CO? Forestry is currently engaged in efforts to develop its own sustainable forestry projects that take advantage of the dramatic transformation occurring in the charcoal supply market. Approximately 55% of charcoal production in Brazil comes from logging native forests for the Brazilian steel industry with a value of over $500 million annually. Charcoal is one of the main sources of energy used in the production of pig iron for steel in Brazil. The vast majority of the current charcoal production is from unsustainable and often illegal harvest of native forests, leading to severe environmental degradation and deforestation. While there have been efforts to reduce unsustainable practices, institutional barriers have prevented wide adoption of sustainable forest plantations for charcoal. CO? Forestry’s business plan is poised to overcome these barriers.

CO? Forestry’s projects will help to replace native forest destruction with a renewable, more environmental friendly source of charcoal for iron ore reduction. In the Brazilian charcoal market, eucalyptus hardwood timber receives premium pricing and produces a better, faster, more consistent charcoal product than native forest timber and is less expensive than the alternative, imported coking coal. The company sees the additional income provided by the new area of carbon credits and carbon finance as having a significant impact on the barriers to sustainable development. CO? Forestry describes its sustainable forestry project in greater detail on its website.

CO? Forestry is proposing the development of a three-phase 24,000 acres plantation project with total development costs of approximately $45 million and 14 year project life. The company is currently seeking around $800,000 from investors to cover the upfront development costs and operating losses of the initial pilot project over the next 36 months. The income produced from the sale of both timber and carbon credits developed by CO? Forestry will create a long term, lower risk, stable investment return for CO? Forestry’s strategic partners, as well as other investors such as pension funds, college endowments and private individuals. According to Pritchard, an investment in CO? Forestry should appeal to the longer term investor looking for solid, stable, lower risk returns in the area of 20% IRR’s (unleveraged).

Brazil is one of the fastest growing markets worldwide with a rapidly expanding middle class demanding the building blocks (lumber and steel) of a developing economy.  A sustainable, local, and reliable, supply of carbon neutral charcoal provides a competitive cost advantage and hedge for the Brazilian steel industry. The resulting CO? Forestry carbon credits will be sold into the $576 million (2011) global voluntary carbon market. It should be noted that the potential growth of the market for carbon credits may soon expand as  international bodies along with the U.S. are currently discussing various policies to reduce carbon emissions from deforestation and forest degradation (also known as REDD).

Pritchard began the company because he sees a tremendous opportunity for himself and potential investors to realize significant investment returns as well as create a profitable, positive and significant change to the current trajectory of the planet’s carbon balance. If you are interested in learning more about the potential opportunity that sustainable forestry and carbon credits can provide, please contact Pritchard at rdpritchard@co2-forestry.com.

James Lester is a Managing Consultant at Cleantech Finance, which is an analytics group that reports on the intersection of finance, cleantech, and policy. James is an experienced author and has contributed to industry journals such as the Pew Center on Global Climate Change which is now called the Center for Climate and Energy Solutions.