What Startup investors are really looking for
What Are Investors Really Looking For A behind the scenes look into a VC first meeting Noam Kaiser, Venture Capital Business Development Manager June 28, 2017
© 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
So, who is this guy anyway? • • • • • • •
Liz’s husband, Jonathan, Ram and Alona’s dad VC Business Development Manager @ AWS – Israel & Iberia Principal @ Gemini Israel Ventures Investment Manager @ Naiot Venture Accelerator VP Sales & Biz Dev @ BAlink Founder & CEO @ VentureApp New Media Manager @ Yes Satellite TV, Eurocom group
So, who is this guy anyway?
22 Companies that got a “Yes” Total Valuation $2.4B
OK, so what ARE investors looking for?
ROI
NEED BUDGET
PHASE
BUSINESS MODEL WORK PLAN A GOOD STORY WITH
SOLID STORY TELLERS INTELECTUAL PROPERTY MARKET COMPETITION PITCH/DISRUPTION
The Elevator Pitch
The Elevator Pitch
The Elevator Pitch
The Team So, what do you do for the company?
I’m the founder
Oh… and you?
Co - founder I see…
The Team C SF SF PF SF PG SG
PG SG PF
C PF
I don’t mind debating you, if you choose to argue there has ever been a better team than Dream Team ‘92 . So long as you realize you’re wrong.
“But what if our team lacks experience?”
30,000,000
17 17
“But what if our team lacks experience?”
$30,000,000 Nick D’Aloisio 17 11
MVP + GTM
START STARTUP
$30, 000,000
MVP + GTM
Show me Bias for Action Elastic Beanstalk
ECS
Lambda
DynamoD B
Lightsail
Tell me 13
Need Does the need exist? Is it unmet or is it resolved? Does the need constitute a significant market?
Need “How come there’s no 7-Eleven in the middle of the Sahara?!”
Need – “Who did you talk to about it?” “In less than 3 years, social twerking will as common as liking posts” Jonathon S. , Market expert Jonathon Southam, VC Biz Dev Manager, AWS “This is exactly what our users are missing” Richard Howard, Biz Dev Manager, AWS Richard H. , CEO, Startup Shakeittillyoubreakit.io “If I had only 3 apps on my phone, they would be e-mail, calendar and a social twerking app” , Some random guy Biz Dev Manager, AWS Tim B. Boeckmann, Startup
Opportunity
Architecture matters …However… “It looks as if the blue bucket is angry at the grey people who called the police…”
We can help out here, use us a resource.
A word about Patents
Competition
Competition
What’s the difference Mistake Mistake #1 #2 “None of these pose a direct competition to us” Is it significant? Enough to win customers?
TAM – Total Available Market Global Social Twerking Market Share Facebook
17%
15%
22%
The “Top Down” Approach:
46%
Twitter Instagram Our yet to be developed technology
“Well, the global market size for Twerking on social media is estimated at $ $3B, So estimating we’ll take 15%– we expect to hit $450M in revenue within 5 years.”
TAM – Total Available Market
Think Unit Economics (Yep, we can be part of this discussion too…)
The “Bottom Up” Approach: “Here’s what it would take me, To sell these many licenses, At this price point.”
Valuation % 20% = $750K Max
25% 20%
Min
Valuation = $3.75M Pre money Valuation = $ 4.5M Post Money
15%
$500K Min
750K
$1M Max
$
Remember: It’s all about telling a good story? “A 2X ROI ?!?!”
Bottom Line
$ ?
© 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
So, who is this guy anyway? • • • • • • •
Liz’s husband, Jonathan, Ram and Alona’s dad VC Business Development Manager @ AWS – Israel & Iberia Principal @ Gemini Israel Ventures Investment Manager @ Naiot Venture Accelerator VP Sales & Biz Dev @ BAlink Founder & CEO @ VentureApp New Media Manager @ Yes Satellite TV, Eurocom group
So, who is this guy anyway?
22 Companies that got a “Yes” Total Valuation $2.4B
OK, so what ARE investors looking for?
ROI
NEED BUDGET
PHASE
BUSINESS MODEL WORK PLAN A GOOD STORY WITH
SOLID STORY TELLERS INTELECTUAL PROPERTY MARKET COMPETITION PITCH/DISRUPTION
The Elevator Pitch
The Elevator Pitch
The Elevator Pitch
The Team So, what do you do for the company?
I’m the founder
Oh… and you?
Co - founder I see…
The Team C SF SF PF SF PG SG
PG SG PF
C PF
I don’t mind debating you, if you choose to argue there has ever been a better team than Dream Team ‘92 . So long as you realize you’re wrong.
“But what if our team lacks experience?”
30,000,000
17 17
“But what if our team lacks experience?”
$30,000,000 Nick D’Aloisio 17 11
MVP + GTM
START STARTUP
$30, 000,000
MVP + GTM
Show me Bias for Action Elastic Beanstalk
ECS
Lambda
DynamoD B
Lightsail
Tell me 13
Need Does the need exist? Is it unmet or is it resolved? Does the need constitute a significant market?
Need “How come there’s no 7-Eleven in the middle of the Sahara?!”
Need – “Who did you talk to about it?” “In less than 3 years, social twerking will as common as liking posts” Jonathon S. , Market expert Jonathon Southam, VC Biz Dev Manager, AWS “This is exactly what our users are missing” Richard Howard, Biz Dev Manager, AWS Richard H. , CEO, Startup Shakeittillyoubreakit.io “If I had only 3 apps on my phone, they would be e-mail, calendar and a social twerking app” , Some random guy Biz Dev Manager, AWS Tim B. Boeckmann, Startup
Opportunity
Architecture matters …However… “It looks as if the blue bucket is angry at the grey people who called the police…”
We can help out here, use us a resource.
A word about Patents
Competition
Competition
What’s the difference Mistake Mistake #1 #2 “None of these pose a direct competition to us” Is it significant? Enough to win customers?
TAM – Total Available Market Global Social Twerking Market Share Facebook
17%
15%
22%
The “Top Down” Approach:
46%
Twitter Instagram Our yet to be developed technology
“Well, the global market size for Twerking on social media is estimated at $ $3B, So estimating we’ll take 15%– we expect to hit $450M in revenue within 5 years.”
TAM – Total Available Market
Think Unit Economics (Yep, we can be part of this discussion too…)
The “Bottom Up” Approach: “Here’s what it would take me, To sell these many licenses, At this price point.”
Valuation % 20% = $750K Max
25% 20%
Min
Valuation = $3.75M Pre money Valuation = $ 4.5M Post Money
15%
$500K Min
750K
$1M Max
$
Remember: It’s all about telling a good story? “A 2X ROI ?!?!”
Bottom Line
$ ?
