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.

The Angel Capital Summit 2013 Semi-finals were closed to the public. Instead, we invited some energetic student entrepreneurs to view the pitches. We know it’s hard for students to break out of their rigid schedules and ivory towers so the few who actually showed up that day are total stars. Eric Nydegger from the School of Mines attended to our semi-finals with Dr. Joy Godesiabois who understands the importance of connecting industry and academia.

Impressed with some of the questions that Eric had for the pitching companies, I caught up with him between pitches and asked him a question of my own.

“Eric, will you write about your experience here today for our online readership?”

Below is his take on the busy day:

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”] Investors will consider investing in a founder who is excited about the business[/pullquote]

As with any college experience it is necessary to get outside of the structured institution and peruse different venues for the application of education in the business environment. Recently the undergraduate and graduate students at the Colorado School of Mines in the economics and business department were provided this opportunity through an invitation to attend the Angel Capital Summit 2013 Semi-Finals to gain insight into the process of the entrepreneur pitch to angel investors.

By personally experiencing the Semi-Finals and watching the angel investor coaches and judges in action, I was able to see first-hand the mannerisms, presenting strategy, and the basics of the pitch required to gain the interest of investors effectively and succinctly.

After each pitch, judges inquired about details. From the business’ Twitter handle to the summary slide, I was quickly able to see what investors would be looking for within the first crucial seconds of the five-minute pitch and throughout the entire presentation. As efficient methods of communication of the business were addressed, the varying entrepreneurs and coaches were conducted through a quick presentation and then a Q&A session to address questions, but to also allow for the knowledgeable judges to provide guidance and recommendations for the entrepreneurs on their presentations.

Some of the presentation tips included using timeline slides when effective, addressing the exit strategy, clarifying the product and the industry in the first crucial moments of the presentation, addressing current partnerships and networks that are currently developed and advantageous to the business, and most importantly highlighting the competitive advantages.

Other guidelines for the presentation strategy included using pictures to keep interest without distracting, create “the hook” within the first 30 seconds, and present with power and enthusiasm for the business. Investors will consider investing in a founder who is excited about the business with a poor product before investing with an individual that has a great product but a poor, unenthusiastic attitude.

The atmosphere of the practice pitch session gave me an understanding of the pressure of the presentations and the composure required by the entrepreneurs in order to effectively communicate their business and product.  As a practice session and a final elimination session before presenting to the multitude of investors the following week, the setting brought on a challenge to the entrepreneurs presenting, recognizing the significance of the experience. By simply observing the professional poise of some and the shaking and bending of notecards by others, the preparation and the experience of the speakers quickly became apparent to all those observing.

Throughout the enlightening experience and in preparation for our own class presentations of our business plans it was most certainly an informative and educational experience to supplement the classroom experience. The familiarity to the situation will certainly prepare those that attended not only the pitch session but the conference as well with a new awareness and vision for the young entrepreneurs into the innovative business environment.

Part of the Rockies Venture Club mission is to help build the pipeline of great entrepreneurs in Colorado. We are excited to report that 6% of our Angel Capital Summit Attendees were students. The audience contained student representatives from the School of Mines, Regis, and CU Boulder.

 

As a mom with little time outside of childcare, I want shopping to be as painless and efficient as possible.  I don’t dare waste time in malls.

I would like to buy a Kettler Kiddi-o Air Tire Tricycle. It is sold by a multitude of websites including eBay, Amazon, Walmart.com, and so forth. After searching two hours for the best price and comparing shipping costs and coupon codes, eBay won the sale with a price of $89.99. Now I really don’t want to spend that much, but that was the best price I could find.

Brian Grega and Anthony Sanchez, veterans of sales and marketing, are coming to my rescue. Shortly after Christmas 2011, they began to discuss how they have spent their careers figuring out buyers, trying to be better guessers of who will buy what when.

Here’s the conversation that changed everything:

Sanchez, “I wish there was a way to know when someone wants to buy something so we don’t have to spend so much time and money marketing to them.”

Grega, “Why can’t we have that?”

Within the few minutes of that interaction, these guys had started the ball rolling on what would shatter the existing models of today’s online marketplace and start an e-commerce revolution with infinite possibilities in today’s environment and technology.

What started in that brief exchange between Sanchez and Grega, quickly took form as the only C2B (consumer to business) online shopping model in e-commerce, Infinite Buyer. They created a site where the buyer arrives with a specific product in mind and makes an offer for it to registered sellers. Venders, in turn, respond with an acceptance, counter, or refusal of the customer’s price. In this simple exchange, Infinite Buyer has revolutionized the online market in a radical shift of power to the buyer.  Both the buyer and seller save time and money in an unprecedented way with this model.

Infinite Buyer entered a market saturated with successful online stores like Amazon and eBay. How it can contend with such formidable forces? It doesn’t have to. These big guys serve the general, uneducated shoppers at the wide mouth of a shopping funnel whereas Infinite Buyer captures the decided buyer at the narrow end of that same funnel.

Grega likes to say, “The little red book of selling will tell you that people do not like to be sold, but they love to buy.” This statement is the best testament for Infinite Buyer’s goal – create a place where buyers have the power to guide the market and sellers enjoy the profits without as much of the usual expense of earning them. Imagine that you wake in the morning with a purchase in mind and can simply enter the item on Infinite Buyer with an offer to sellers within your budget. Then you go about your day fulfilling other responsibilities and return later to find which sellers have accepted your price. Finally, you can complete the transaction quickly, wasting almost no time shopping.
Sanchez puts it this way, “There’s no more waiting for the right seller offer to pass in front of you, no more waiting for a summer sale. Everyday everything is on sale at the exact price you want.”

While the control currently lies mostly with Infinite Buyer’s consumers, sellers still reap many benefits. Without the expense of sales and marketing teams, they get feedback as to what buyers want and what they are willing to pay. And while the beginnings of Infinite Buyer focus on the consumer, the future holds many exciting possibilities for sellers. Grega and Sanchez envision capturing more and more of the funnel described earlier, moving up a bit, if you will. For example, the site will eventually allow sellers to post items for offer. When buyers use Infinite Buyer to pursue specific items, they can also submit an offer on other items sellers have displayed.

Grega, CEO of Infinite Buyer, spent the majority of his 30-year career at high tech Silicon Valley start-ups. He’s an expert at market development, sales operations, marketing, and industry pioneering activities. Sanchez, CMO of Infinite Buyer, is a former Fortune 500 Marketing Executive with 25 years of experience in marketing strategy, digital marketing, branding, website development, and entrepreneurial pursuits. He was one of Silicon Valley’s first web marketing professionals at Oracle. So you’ve got two of California’s Silicon Valley business gurus forging the way with an exciting new company in Colorado’s “Silicon Summit.”

Besides Grega and Sanchez, Infinite Buyer’s team includes experienced advisors on the Board of Directors and field experts on the Board of Advisors, such as Skip McGrath, eBay’s only endorsed Online Sales Coach. There are also technical experts and highly skilled architects in product development.

The niche Infinite Buyer has filled in the marketplace and its leadership combined to earn the company a finalist pitching spot in Denver’s Angel Capital Summit, hosted this week by Rockies Venture Club. Infinite Buyer will join many other Colorado start-ups in a quest for funding.

Grega and Sanchez see funding as a vehicle for supporting Infinite Buyer’s viral growth potential. Once monies are received, they will exercise their marketing expertise and put many features into place that will guarantee a rapid increase in the user community, platform development, and the creation of a mobile app. Additionally, funding will focus on creating loyal customers by utilizing data acquired through transactions for augmenting features and options. Grega and Sanchez envision tens of millions of buyers within 3-5 years and tens of thousands of sellers by then. The funding amount they seek now ($400K) is relatively low considering their playing field, but they say it is enough to carry them through the impending viral growth period that will, in turn, lead to enough revenue for independence.

As with any start-up, there are issues to address. Infinite Buyer faces an imminent viral growth period, one that will surely entail the need for a lot of customer support. Once a transaction is complete, there are shipping and handling, quality assurance, and other processes to ensure. Also, there are worries that buyers won’t be loyal if they aren’t experiencing successful transactions, and current sellers, in turn, expressed concern about buyers being bottom feeders. Sellers also want anonymity for brand quality assurance.

Grega and Sanchez, in their business wisdom, have addressed these issues up front. Part of the funding they seek will go to developing customer support needs and toward analyzing data to provide buyers with guidance for successful purchases. Furthermore, current data already shows that buyers are offering reasonable amounts consistently and sellers are satisfied with revenues from the site. Infinite Buyer also rates buyers based on offer and purchasing records, so sellers can have more confidence in transactions. Also, sellers’ names are not publicized, only buyers know the source of an item.

Because of its radical C2B nature, Infinite Buyer stands alone. There is a huge $250 billion e-commerce market in the US, projected to expand to $330 billion in the next five years, so it there is plenty of space for Infinite Buyer to fit without posing a nuisance. Besides, the big guys have no incentive to switch their successful models nor risk established relationships to compete in an untested market.

Interestingly, therein lies the true challenge to Infinite Buyer. Grega and Sanchez recognize their obligation to shareholders is to build this niche in the market so well that when Infinite Buyer becomes large enough to constitute a nuisance to the titans, it will have enough revenue and customers to be acquired rather than squashed.

Back to me. I’ve cancelled my purchase from eBay for the Kettler Kiddi-o Air Tire Tricycle. I’m going to offer $50 for it on Infinite Buyer. Then I’m going to bed because I don’t have to spend any more time on it. I’m sure a seller will be waiting for me in the morning…

 

Stacy Gregg is an educator, runner, reader, and mom to two energetic pre-schoolers. She joined the Rockies Venture Club at the end of 2012 to support the communications side of the organization.

By Tim Harvey,  guest writer for the Rockies Venture Club

Your smartphone is as dumb as a banana when it comes to interaction with local merchants,” says Tom Higley from his co-working space in Denver, Colorado. As CEO of Vokl, he’s ready to change that.

Smartphones are more prevalent than ever, with over 1 billion users worldwide, expected to double in the next few years. Including tablets, the worldwide market for mobile purchases is around $25 billion, and eMarketer says this will jump to $87 billion by 2016. Despite this, many local merchants rely on technology as advanced as the tried-and-true sidewalk sandwich board to attract customers in the area. It’s hard to blame them – these signs are fast, cheap, get attention, and many small business owners don’t know of a better way. They often have a hard time creating professional content online, and when they aren’t able to provide value to their customers this way, they’re missing out. The incredible market opportunity presented by mobile technology poses risks as well – especially to small and medium size companies and local merchants. The businesses that are either not aware of, or not able to capitalize on these global trends are likely to be left in the dust – while the ones that see it coming and can use it to build meaningful content and connections with their customers stand to win big.

Tom Higley has a vision for how these smaller businesses can participate. As a successful serial entrepreneur and 6-year mentor for TechStars, this isn’t the first time he’s planned to change the tech landscape. Vokl is the 6th company where he’s either been a founder or CEO, and throughout his career has raised about $35 million to return over $1 billion to investors. Working closely throughout his career with entrepreneurs like Brad Feld and Raj Bhargava, he has a unique perspective on what growing businesses need and where opportunities are within the marketplace.

Tom’s answer to this problem is an easy-to-use app for businesses to create mobile content their customers appreciate. “The consumer is the center of the value-creation universe,” he says. He believes that giving local businesses the ability to produce and deliver value to their customers will drive consumer engagement, and envisions a world where both the consumer and business could expect mobile interaction with each other. Right now, neither side expects this – and that’s what Tom plans to change.

The first stage of Tom’s plan was to create the Vokl Business app, which has been available on iOS since October 2012. This allows local merchants to easily create and share content through Vokl as well as social media, similar to how Instagram works. It has pre-built templates, and also makes it easy to do things like add text to images, for a caption or a call to action. The next step is for Vokl to release the consumer version of the app, which they expect to do within the next month or so. This will drive communication beyond content creation and consumption – users will be able to see posts businesses they follow in their feed, and they can also interact with the merchant. The last and potentially most valuable phase for Vokl will be leveraging location based content. Geo-tag technology will continue to grow, and although companies like Foursquare have been popular, they really aren’t really geared toward merchants, especially in the minds of users. It’s especially hard for businesses to create content or direct who gets it. “Eventually every place will tell a story, and what is important to me may be different than what is important to you,” Tom says. That’s why it’s so important for a business to be able to tailor their messages quickly and easily. Although the location based technology will be the most challenging piece to develop, he has experience in this area from serving as CEO of Denver-based Local Matters.

Vokl plans to fill a niche in the market that they don’t see anyone else providing. Many business owners haven’t seen much value from directory services, even when they are online. Most small businesses are on Facebook, but they are becoming increasingly annoyed with it. Often, they created a page because it was free and relatively easy to get ‘likes’, but with the implementation of EdgeRank they aren’t able to reach all of their user base they build organically without paying for sponsored posts. Whether or not they see this as a bait & switch from Facebook, many find it frustrating and hard to control.

While Tom was obviously excited about developing the technology, he also has great respect for the rest of his team. He is known for for spotting talent – he hired Niel Robertson (Founder/CEO of Trada) in his early 20‘s at Service Metrics, and they went on to sell the company to Exodus Communications for $280 million in 1999. For Vokl, Tom brought on software and engineering wiz Vasily Vasinov as CTO, after finding him at the top of the CU-Boulder computer science program. Tom also had good things to say about the rest of his team – another developer and what he calls “the best UI designers in Colorado.” He talks of how his team’s experience complements each other, similar to how Steve Jobs likened his recruiting model to what made The Beatles great.

Tom is pitching at the Rockies Venture Club Rockies Venture Club Angel Capital Summit, March 19-20, 2013. The two-day conference is Colorado’s largest angel capital event, and begins with a live interview with TechStars founder David Cohen. In addition to other startup pitches, RVC will feature seminars from local experts, and a keynote speech from Jon Nordmark, co-founder/former CEO of eBags and current CEO of usingmiles.com. After last year’s Angel Capital Summit, RVC investors led $15 million of investment in 24 companies that pitched throughout the year, so this year is sure to have a positive effect on the Colorado entrepreneurial community. The event will be held at DU’s Sturm Hall and more information can be found here.

Tim Harvey is a guest writer for the Rockies Venture Club. His mixed experience with Finance and Neuroscience allows him to fit right in. If you run into him, ask him about his ‘Semester at sea’.

 

Ed note: These classes have already occurred. Please contact nicole@rockiesventureclub.org to request a class to be run again.

RVC Academy – Seed Stage Investment Education

We have two high-quality classes on the calendar in the next two weeks as we prepare for the Angel Capital Summit.

 


Follow RVC Classes on Twitter #RVCacademy


Register for Angel Capital Summit 2013

Due Diligence (9 more seats have been added!)

by Thought Leader: Lauren Costantini, Ph.D. from CID4

When: Feb 25, 4-6pm

Where: Shift Workspaces, 383 Corona Street, Denver

Investors,

  • Ask the right questions to uncover the risks that could jeopardize your investment.
  • Learn to devote a short 10-20 hours of due diligence and discover what you need to make a smart decision.

Entrepreneurs,

  • Empower your deal by gathering your due diligence materials before investors even ask for them.
  • Close your deal faster by supporting your lead investor.

Taught by Lauren Costantini, Ph.D. from CID4. CID4 is a not-for-profit organization committed to Economic Development Through Innovation Advancement in the life sciences industries, by providing investment capital and management assistance. Lauren also serves on a number of Advisory and Executive Boards for early stage companies.

 


Vetting Exit StrategiesRegister for Angel Capital Summit 2013

by Thought Leader: Tom Caltrider, Managing Director, Corporate Development Capital, LLC

When: March 4, 9-11am

Where: Holland and Hart Office: 555 17th St #3200 Denver

Stephen Covey, in his very popular book, The 7 Habits of Highly Effective People gave as his second habit:

Begin with the End in Mind

Whether you are an angel investing in a new company or a founder who is pitching to angels, it is important to your personal net worth to figure out what the End or the Exit will be for this venture. Investors and Founders will enjoy an in depth discussion on exit strategies as they relate to companies that are seeking seed stage capital.

Successful angel deals result in a return on investment in 3-7 years. To get there, we need to begin with the end in mind.

This two hour Exit Planning session will discuss the following:

  • What is an exit?
  • What are your goals?
  • How to build an exit strategy?
  • Implementing the exit.

 

Silicon Valley has sat confidently on the throne of the entrepreneurial kingdom for a long time now. We all know the reasons this region has thrived: large numbers of smart people with entrepreneurial spirit, an excellent university (Stanford) consistently producing more of them, and a great environment where these people want to stay and live.

Today, Silicon Valley continues to lead the start-up community in numbers and successes, but as in any kingdom, there are others chomping at the bit. The pool of potentials is overcrowded and extreme competition has taken its toll on its famous entrepreneurial spirit. “There is a feeling in Silicon Valley that if you win, someone else loses,” said Kimbal Musk, Co-Founder of The Kitchen Community in Boulder. “It has driven success, but it has also driven people to leave.” (New York Times)

So where do you go if you want a better place to start your business? There are many locations vying for attention. Some of the top contenders, as ranked by National Venture Capital Association, include Boston, New York City, Los Angeles, and Washington D.C. These cities not only have the money to spend, but they have brainy populations with established industries in need of new businesses’ services and skills as well. But hold your horses, don’t forget that most entrepreneurs can’t afford to set up shop and live in such expensive places. The high cost of existing in these cities has caused many start-ups to look elsewhere.

Smaller runner-ups for entrepreneurial hotspots are places like Portland, Oregon, Austin, Texas, Salt Lake City, Utah, and our own backyard. The Denver-Boulder area has made it’s own mark among the challengers. In fact, many believe Colorado is poised to become the next Silicon Valley.  You might ask why our state would be better than others considering that most of these locations have some of the same benefits as Silicon Valley too (remember the smart people numbers, smart people factory, and great environment?). Well, Colorado is succeeding for these reasons, but it has emerged as an excellent combatant against the reason people are leaving Silicon Valley – it is fostering a supportive community where entrepreneurs learn, work, and thrive together, not in isolation. Sure, there’s competition, but it’s less of a winner-loser situation with more support systems in place to boost the entire entrepreneurial community.

Colorado supports its start-up community with many educational opportunities designed to help entrepreneurs learn the process of starting, funding, and running a business well. Universities in the state continue to augment their business programs and focus on community support. Many degree and non-degree opportunities exist for entrepreneurs to pursue. The focus of these programs even extends to women specifically as an entrepreneur target group. University of Colorado at Boulder’s Deming Center houses the Women’s Council is an example of forward-thinking environment the state offers. This group aims to provide role models, leadership lessons, mentoring, and coaching for female business leaders specifically, but it also involves the entire community.

Besides institutional education, many organizations continue to arise in Colorado and provide essential preparation for start-ups as well. There are organizations like Rockies Venture Club (RVC) based in Denver and serving the whole state. Besides providing a well-rounded support system for entrepreneurs and investors alike, RVC recently created a series of courses in which thought leaders provide specific expertise and foster discussion and collaboration. A Good Investment Deal, Marketing and Branding, and Due Diligence are among the offerings.

Now of course business education isn’t the only factor in Colorado’s run for entrepreneurial leadership. Many cities have the same benefits, but not all of them have the same community gatherings arranged for business success. Boulder Denver New Tech and Boulder and Denver Open Coffee Clubs are examples of regular gatherings of Coloradoans where anyone can appear to discuss tech and business. Besides helping to establish relationships with fellow business leaders, attendees can discuss issues, share updates, and talk innovation as well.

Rockies Venture Club throws its hat into this ring of community business also. Part of its well-rounded nature is that it addresses all possible needs of investors and entrepreneurs. Beyond providing educational opportunities, RVC hosts monthly meetings in which local start-ups have the opportunity to pitch their business, mingle with other entrepreneurs and investors, and get feedback and possible funding. Pitch coaching proceeds these gatherings and investor forums follow, creating a cycle of support and leadership.

Now let’s be honest. The aforementioned reasons for Colorado popularity as a start-up destination are valid, but not totally unique. The picture would not be complete without the mountains. Nobody can deny the absolute beauty of the Rocky Mountain state. Lifestyle is a huge factor is deciding where to establish a business. If your employees can enjoy an affordable life and have the great outdoors and fantastic weather to boot, they are more likely to stay and thrive. As David Cohen, CEO of TechStars, put it, “If you visit, you might love it and decide to never leave. That’s what happened to me.” David Cohen will be a keynote speaker at the Angel Capital Summit on March 19th.

And of course, Colorado rise to the top of contenders for the tech hub title is not without it’s issues. Nobody can deny that Silicon Valley remains the center of the tech universe and money flows there more than anywhere else. Incumbent tech companies dominate there also, and they still lure tech brainiacs away from small and/or new start-ups elsewhere. Furthermore, Doug Dwyre, the CEO of Mocapay, a mobile payments company, thinks while being in Colorado has its pluses, “it’s harder being a start-up here,” he says. “You have to prove your business model 10 times over. Your ZIP code makes a difference for a start-up.”

However, start-ups are called that for a reason. You have to start somewhere. If you can’t afford Silicon Valley or other big cities, what do you do? Herein lies the potential for Colorado’s rise to the top. If you’re a tech brainiac who wants to pave your own path, you are likely to want to do it where you have affordable opportunity, a strong and supportive community, and an excellent lifestyle. Colorado offers the entrepreneur this environment, one where she can learn, grow, and thrive. It is the shining star on the horizon, one that promises to take its place among the leaders, if not overthrow the king of tech industry. Now of course there is the Animal Farm effect. To misquote George Orwell, All towns are created equal, but some are more equal than others. 

 

Stacy Gregg is an educator, runner, reader, and mom to two energetic pre-schoolers. She joined the Rockies Venture Club at the end of 2012 to support the communications side of the organization.

 

Dear reader,

This is the third 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

 


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


Team Slide

At the Rockies Venture Club we have reviewed easily 300+ company profiles in the last 12 months. We’ve noticed that the team is often very well put together, but very poorly communicated in the pitch.

It’s hard to discuss the team. In a startup, the team is made of people who work together, often intensely. For the person pitching, it’s hard to separate the investor-important nuggets from all the other stuff that makes their teammates awesome. The CFO might be a Harvard graduate with two big exits on his Curriculum Vitae, but when you know him well, all you can think about is his silly irrational fear of crickets.

Much of the material on the interwebs says that you should put the team slide early in the pitch. They do. They do. They do.  We disagree in most cases. If you are famous, or semi-famous, feel free to talk about yourself or the team early in the deck. If you are not yet famous, then leave the team slide until near the end. We have had two pitches in the last year that fit the famous model. Super angels were pitching their new companies and it made sense for them to say, “Hi, I’m Locally Famous Angel and I have a habit of growing companies and making money for investors. Here’s my newest venture.”

For the 99.9% of us who are not famous, it’s important that investors understand the context of the company before they can fully care about your team’s experience. It’s hard to care that the person pitching spent 10 years exploring submerged oil veins in Alaska until you understand that it’s exactly that person who should be leading this company’s R&D effort.

Investors are often leadership types who have done a lot of hiring. During your pitch, make them want to hire a person just like you to lead this company. Think about how relieved they will feel when you disclose that you are already on the team!

Cringe Factors

Cringe Factor #1 – Your team consists of two guys and a dog.

Why this makes us cringe: A group of devoted supporters is the first proof that a company has a good idea. If you have a group of strong supporters, why is no one helping you with this company?

How to do it right: You don’t need to pay salaries to have people on the team. Team members in an early stage company include founders, employees, mentors, advisors, and board members. Back up and think about the experience that your company needs to grow. Will you be franchising? Then you better have a franchise guru. Will you be selling your product to hospitals? Then you better have a teammate with a medical sales or medical liaison background. Find the right people and determine their desired level of involvement. Maybe a phone call every month is all they can afford to give you. If they are willing to publicly call themselves your mentor, then you are welcome to add them to the team.

Cringe Factor #2 – Your team is too complicated

Why this makes up cringe: Actually this isn’t fair. An in depth, life-story discussion about each team member doesn’t make us cringe. It puts us to sleep. Save the life stories for your memoirs.

How to do it right: Just the fact ma’am. Boil your teammate down (not literally!) into one line that describes how his or her experience will make your company succeed. Remember, the whole pitch is really about money, so try to keep a message in there about how they can make the company money.

Cringe Factor #3 – Your team slide presentation is awkward

Why this makes us cringe: Since teams are made of people and people have relationships (good or bad) there is a weird thing that happens sometimes during the presentation of the team slide. The presenter changes body position, and either says something inappropriately loving, or leaks an accidental inside joke, or makes odd gestures. It’s awkward.

How to do it right: Practice this part just as much as the other parts. Feel free to be glowing about your teammates accomplishments in his last job when he saved Oracle $2 billion dollars because he caught a mistake. Give your pitch on camera and watch it. Or do it in the mirror. You’ll notice immediately if you become a giggling schoolgirl when you talk about your developer.

How to build the side

Visually, this team has the right idea. They simply show which founder has which role. They use logos from Dow Jones, RIM, and Oglivy to give them the appropriate amount of street cred. The assumption is they worked in those places before starting this company. Name dropping is ostentatious at a cocktail party, but necessary in the team slide.

Verbally, the pitch presenter will give one line statements about how these team members are well suited to making this a successful company.

Note they have their golf handicaps on the slide. It’s a golf company, so that little tidbit is there to keep the slide branding related to the industry. No piece of this slide is random.

 

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  #4 – The Summary Slide

 

It’s well known that companies seeking investment pitch with RVC almost every single month. The events that unfold after the pitch are a bit more of a mystery. The RVC Investor Forums meet and discuss the deal. Ok, that makes sense. So, what happens after the Investor meeting? I’ve heard a legend that checks are delivered under the pillow of each company founder in the night. Or is it that a stork brings the term sheet? Wait, what really happens after you pitch at RVC?

You just pitched at RVC on a Tuesday night or in a conference like the ACS. People congratulated you, maybe you won a handshake from a VC or angel. You and your team make plans to celebrate over a well-deserved dinner out that week. Then what? We realize that there is no RVC handbook that tells you what to do next. We see entrepreneurs who work our system so well, we just stand in awe. Sometimes people pitch, disappear, and the next thing we hear is a rumor that they are calling us bad names for not getting them investment. Yikes!

The pitch is such a tiny part of the whole fundraising process. You need a good pitch to communicate your deal with investors, but it’s only 5% of the work you need to do. Your company has to be good, your deal has to be well thought out, and your fundraising activities have to be proactive. I promise that if you pitch and do nothing else, you have a really high chance of never raising money.

 


 

What RVC does best

  • We have built, and continue to grow a community of (250) angels who are educated about early stage investment deals. Meeting angels at our events is like shooting fish in a barrel. Investors are at a concentration of 1:3 at RVC events.
  • We educate entrepreneurs about taking investment capital. When, for what purpose, and how does that conversation sound. There is a lot to know; they don’t teach this stuff in school.
  • We make Colorado, and more specifically Denver, a place where people can find capital.
  • We don’t have an application or acceptance barrier. Anyone can come to our events and meet angels. Anyone can take our classes, learn how to raise money, and meet angels right there in class.

 


 

To clarify RVC’s purpose, we play the role of the dating service. Like Match .com we help entrepreneurs identify strengths, weaknesses, desires, and warts. Then we shop RVC companies around to investors. All the while we’ve been helping the investors identify their strengths, weaknesses, desires, and warts too. RVC exists to be a legal and safe place for investors and entrepreneurs to meet and connect. Also like a dating service, we don’t go on the date. We don’t know if you are talking with investors unless you tell us.

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]I promise that if you pitch and do nothing else, you have a really high chance of never raising money.[/pullquote]

Why is RVC valuable to founders?  Because we work really hard to make sure there is a place for accredited investors to learn how to be good angels. We give them a way to meet other angels so they can work together on deals. We vet companies so dealflow is easy to manage. These activities create an angel community that founders can tap into.

In a perfect world, both the founder and the investor are highly experienced and have been through the angel investment process before. They both know how to behave and who calls whom. But what happens if neither the angel or the investor has ever seen a term sheet? Both sides of the table to wait for the other to make a move. Don’t wait!

As a founder, your deal will close faster if you are completely prepared with a draft term sheet, a PPM, and a plan to communicate with angels. As part of the communication plan, your job is to stay in touch with RVC (through Stacy, our Communications Manager) about the details of your raise. We keep a dropbox of company files and a list of current deals. If your deal is half committed, let us know! We can post that info in the Investor-Only Newsletter that goes out once a month as a hot deal. Your company will stay on a list of active deals until you tell us the deal has closed.

What if you don’t hear anything from us or from investors after a month or two? Come to RVC networking events. Be visible. Talk to people and market that deal! It amazes me sometimes that companies put so much time and effort into the pitch and then don’t make any effort to follow up with us or the community.

 

RVC Pitch Process At A Glance

  1. Apply to pitch through Gust or Business Catapult
  2. Get invited (this can take a while, so don’t loose hope. It rarely happens immediately since we usually have a backlog of good companies.)
  3. Take our required Pitch Academy class
  4. Pitch at RVC event (example pitch event)
  5. Offer to pitch to High Altitude Investors, Open Angel Forum, Colorado Angel Investors, we aren’t the only show in town.
  6. After you pitch, your company will be the RVC Investor Forum Agenda while investors still ask to hear about it and your company is posted on the list of active RVC Deals.
  7. Each month you should consider whether your company has done anything that reduces your investment risk or increases your business traction. If so, submit an update to us!
  8. Work it! Come to RVC networking events. Be visible. Network at other events in town. Pitch elsewhere. Invite investors to talk.

 

 

 

 


In this edition:

 


 

Angel Capital Summit News

The Angel Capital Summit is scheduled for March 19 and 20th at the DU Campus in Sturm Hall. This is the same location as last year. Don’t take that to mean that we are repeating the same old conference! We’ve revisioned the ACS to include suggestions from last year’s suggestion box. All the seminars will occur on one stage. No more choosing between two awesome talks. Just relax and take it all in!  Similarly, pitching companies will not compete for attention; they too will pitch on one stage.

Local Legends, David Cohen, founder of TechStars, and Jon Nordmark, CEO of eBags will both be giving Keynote addresses at the ACS. We have confirmation that many angel and venture capital investors will be in the audience. We have a growing list of VCs who will be attending so they can browse our local seed stage companies.

Pitch applications are in Executive Review through February and companies will be invited to pitch in early March. We have seen some hot new companies come through both the Gust and Business Catapult application databases. Companies will be matched with trained Pitch Coaches and the Finalists will be chosen during the week of March 11 after we’ve seen the pitches in person.

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No Pitch Event in April

Since the Angel Capital Summit is late in March (corresponding with DU’s Spring Break), we will have a bye in April. Although we won’t have new pitches in April, the investor Forum will still meet in April. This allows the Investor Forum to fully digest the large number of companies that pitched at the Angel Capital Summit. A Bye in April is good for entrepreneurs and good for RVC staff. Whew!  We will resume our normal pitch event schedule in May.

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New RVC Staff Roster

We’ve been growing!  RVC is an amazingly complex organization at the cutting edge of angel investing and private equity community development. We are so thankful to have found some amazing new staff members so we can accomplish our goals this year. As a new non-profit, we are thankful to have the deep experience of executive-level interim staff. We really are lucky to have such a great team! Here’s what our roster looks like right now…

Peter Adams, MBA – Executive Director

Known as the brave soul who took over the Rockies Venture Club in Dec of 2011, Peter is the visionary force shaping RVC today.

Kevin Andresen – Interim Staff

Most recently VP at Urban Lending Solutions, Kevin is experienced with the crazy world we call Private Equity and Venture Capital.

Patty Laushman, MA – Interim Staff

Past CEO of the Uptime group, she now calls herself a “cashed out entrepreneur”, Patty is intimate with the inner workings of start-up operations and knows the path from zero to exit.

Nicole Gravagna, MS, PhD – Director of Operations

Just like the human brain strengthens useful neural connections and removes extraneous ones, Nicole is constantly developing new Standard Operating Procedures to keep RVC running smoothly as it grows.

Stacy Gregg, MA – Communications Manager

With two advanced degrees in education, Stacy is well-suited to managing the constant stream of three-way communications at RVC.

Rebecca Wiedemer, MBA – Events Manager

Senior Financial Analyst at Standard and Poor’s by day and master of Event Management by night. Rebecca is responsible for the high quality of our monthly Pitch Event these days.

Mimi Zheng – Analyst Intern

Soon-to-be-graduate of Metro State University, Mimi is involved with Analysis at RVC this year. She’s taking a deeper look at operations, revenue, and communications to make RVC a sustainable non-profit for Colorado.

 

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Writing Venture Capital for Dummies

We have a confession. We’ve been moonlighting. Peter and Nicole are writing Venture Capital for Dummies with John Wiley & Sons, Inc. publishing company. We were excited to take on the project when Wiley approached us in the fall since we already wanted to build extensive educational curriculum around fundraising. This book will walk founders through the process of fundraising in an easy-to-grasp “for dummies” format. VC’s for Dummies will be on shelves by September 1st of this year.

 

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RVC Classes are a big hit!

Speaking of educational curriculum (see above), we have been thrilled with the quality of education and the amount of energy that arrises from each RVC Academy class. We’ve had a couple of stellar classes so far, A Good Investment Deal, Marketing and Branding, and Due Diligence. Our thought leaders bring specific expertise to the table, and the small setting allows for amazing discussion around the issues facing everyone in the room. We will try to do 2 or three of these classes every month.

We’ve had a request for a class on Anti-dilution Clauses in term sheets. These are the sticky clauses that can help early investors feel safe in their investment, but can ruin the deal for future investors if done poorly. Does anyone else want to learn about this topic? Send Nicole an email or mention your interest in the comments section at the bottom of the page.