Speaker: Veronika Litinski, MaRS Advisor High tech entrepreneurs need 5 essential communication tools: * the "elevator pitch" * the executive summary * the presentation * the technical white paper * the business plan This lecture focuses on how to create them, and how to use them effectively to grow your business from an idea to a funded business plan. Part of the CIBC Presents Entrepreneurship 101 lecture series. For more information on this event, including video see http://www.marsdd.com/Events/Event-Calendar/Ent101/2009/written-tools-02112009.html

2. Essential Communication Tools for
Entrepreneurs
Slide 2

3. The Idea
1:30 -2:30
http://www.youtube.com/watch?v=nkuOuxRD1Bc

4. Essential Communication Tools
for Entrepreneurs
 The ‘Elevator Pitch’
 30 second outline of business concept
 Executive Summary
 3-5 page overview of your business
 White Paper
 Layman’s summary of your technology, product(s), the uniqueness and the value
 PowerPoint Presentation
 ~15 slide outline of your business plan
 Business Plan
 Detailed description of your business plan: product plan, go-to-market strategy,
management team and financials.
Slide 4

5. How do the tools work?
 The tools EXPLAIN and ILLUSTRATE:
 What is unique about your business?
 Who cares?
 How will you execute?
DIFFERENTIATED
SUSTAINABLE
VALUE PROPOSITION
Slide 3

6. Selling vs. Planning
 Be conscious of the huge difference between communicating your
business concept and building your business plan.
 The primary purpose of the Toolkit is to communicate the value
of your business idea – EXCEPT THE BUSINESS PLAN.
 A business plan is an internal planning document seldom shown
to anyone outside the company
 The other documents are external communication documents
used to sell the value of your business idea to outside parties
Slide 6

7. Why do we need these tools?
Solicit Communicate
investment to partners
Communicate
Communicate
to employees /
to customers
potential hires
Tools
Slide 7

8. Principles for Business Planning and
Communication
No hype - factual statements. Enthusiasm will be generated
FACTUAL
by the investor realizing the opportunity on his/her own
Business planning is an iterative and adaptive process that
DYNAMIC
requires constant update and adjustment work
A clear, precise structure is a courtesy to those investing
VISUALLY
their time in reading the proposal
COMPELLING
The storyline and all the facts presented must fit together
CONSISTENT AND
and generate a well rounded impression
CONCISE
Not the quantity of analyses, but the clarity and preciseness
CLARITY
of the pack are important
Those who allocate investment resources rarely are
EASE OF
technical experts for the technology used in the proposal
UNDERSTANDING
Slide 8

9. Myths and Truths
Slide 9

10. Make your message memorable
 ENGAGE your audience
 Make information meaningful to them
 Case studies
 Address knowledge gaps
 Visuals, charts, graphs
 Let them arrive at their own conclusions
 Pace your delivery
Slide 8

11. Know your audience
 Speak to your audience in language that they understand:
 Institutional investor – do not speak ‘techie’, tie everything
back to money
 Strategic investor – may be more technical; will be interested in
your ideas as they impact their business
 Strategic Partner – mix of technical and business; understand
how a relationship will be mutually profitable to both parties
 Angel Investors - access their background; understand their
interests
 Customer – understand their industry and pain points
Slide 11

12. Case Study
Before…
Product and Technology
A prototype is currently available at www.tryme.com which monitors blogs from Blogger (Google’s
blog hosting service) which includes approximately 13 million blogs. Our proprietary crawling
technology monitors approximately 90% of the blogsphere through livejournal, wordpress,
livespaces and…
After…
Product and Technology
Inc. can collect, clean, aggregate and processes vast amounts of text
information and extract the actionable insights that these marketers and
information services companies seek. Inc.’s platform is uniquely sensitive to
changes in individual sentiment.
Slide 12

13. Know your audience
 Give your audience the information they are looking for:
 Do not assume they want to see the depth of your scientific
knowledge
 Speak to them with their interests in mind, not your interests
in mind
 Whenever possible, communicate with numbers and
graphics
 “the market is huge and growing”, you could say “the total
market is $3B and is projected to grow at 12% per annum”
 show a graph of the historic and projected market size broken
down by segment
Slide 13

14. Case Study
Before…
Addressable Market Segment
Social networking and user-generated content applications have rapidly changed use and
perception of online technologies. BLOGs have been increasing at a rate of 100,000 a day and
currently range in the order of 80 million…
After…
Addressable Market Segment
The market opportunity for this technology is vast. Annual spending on
market research in the US is estimated to grow by approximately 25%
going from $8.7B 2007 to $10.9B in 2009…
Slide 14

15. Case Study
Before…
Competitive Advantage
Inc. provides brands a simple tool for real time sentiment monitoring in places like Facebook etc.
After…
Competitive Advantage
Inc.’s competitive advantage is rooted in the expertise of its principals and its
proprietary platform technology, benefits include:
First fully automated online solution for media analytics. Via simple
fully configurable dashboards, users can start monitoring their brand….
Advanced data analytics and language processing. The software utility
can efficiently track sentiment
Slide 15

16. Communication tools help you build
relationships
 Be strategic about what you provide and when
you provide it
 Not everyone should see your white paper or business
plan
 Leave some details for later, don’t give away everything in
the first meeting
 Your documentation should radiate
professionalism
 Ensure accurate grammar, spelling, diction, illustration,
layout, etc.
Slide 16

17. The Pitch
http://www.youtube.com/watch?v=nkuOuxRD1Bc 2:40 -4:30

18. The Elevator Pitch
Slide 18

19. Inc. has developed hand-held devices
that are designed to quickly assess a
patient’s brain function and
potentially identify dysfunction to help
medical professionals to prescribe
appropriate treatments.
Slide 19

20. The Elevator Pitch
 What:
 A 30 second overview of your business concept
 Why:
 To get a follow–on meeting
 When:
 In a cold call to an investor, customer, potential partner, etc.
 Good for networking at trade shows, business functions, etc.
 Dos and Don’ts:
 Do not spend forever practicing and refining this – should come naturally;
 Figure out a few key messages you would like to get across to use as a loose
script
 Distribute key messages to outward facing employees – standardize message
Slide 20

21. The Executive Summary
Slide 21

22. The Executive Summary
 What:
 3-5 page summary of your technology, product, sales plan, revenue path and
financial requirements
 Why:
 A ‘teaser’ document meant to generate a request for more information or a
meeting
 Readers will want to get their head around the concepts quickly
 When:
 When you have a ‘warm’ intro or an invitation to contact someone
 Integral first interaction with an investor
 Rides the line between confidential and non-confidential – some degree of
trust
 Dos and Don’ts:
 Has to have the right emphasis given the maturity of the business concept
 Keep it current
Slide 22

23. The Whitepaper
Slide 23

24. The Whitepaper
 What:
 A fairly concise layman’s summary of your technology, product(s), the
uniqueness of the technology and products and the value proposition
 Why:
 Helps investors to understand how a concept or technology works
 When:
 After investors are curious about details or have bought into the big picture
business vision
 Dos and Don’ts:
 Put the whitepaper on your website
 Don’t go so deep as to give away all of your trade secrets/IP – consult your IP
professional
 Keep it as short as possible and fully explain all acronyms
Slide 24

25. The PowerPoint
Slide 25

26. The PowerPoint
 What:
 A ~15 slide outline of the key aspects of your business plan
 Why:
 Provides an overview of the business plan in point form
 Allows people to absorb a lot of key information in a short period of time
 When:
 Usually the second piece of information an investor receives after the executive
summary
 Investors love these because they can flip through them very fast and get highlights
 Dos and Don’ts:
 Critical document in the fundraising process – present a sound story; make it look
good
 Practice speaking to it, preferably in front of friendly people who will ask lots of
questions
 Use graphics as much as possible
Slide 26

27. The Business Plan
Slide 27

28. The Business Plan
 What:
 A rigorously prepared and executable description of how you will build your
business
 Why:
 This is your roadmap for how you are going to build your business
 Describes roles and responsibilities for building various aspects of the business
 When:
 When you have assembled enough solid information to write it
 Highly proprietary; later stages of diligence
 Wait for the investor to to ask for it
 Dos and Don’ts:
 Often made a condition of financing or a board action item
 Re-write with every major change in strategic direction
 Avoid the temptation to turn this into a sales tool – preserve its integrity as an
execution plan
Slide 28

29. How to build and use your toolkit?
 Do not start by building your business plan
 You will not have the information you need
 You will examine issues out of priority
 You will expose lack of understanding
 Do not offer to supply a business plan off the bat
 Use the PowerPoint Deck as receptacle for all ideas and information
that comes to light – easy to manipulate, organize and adapt
 Build your executive summary and eventually your business plan
based on your PowerPoint deck
 Give investors your exec summary and offer to walk them through
the PowerPoint slides in person or on the phone
Slide 29

30. Advice from the trenches
 Do not overload the documentation
 Try to get across a few key messages instead of telling
the whole story
 Your audience will only absorb the key messages
 Templates exist for all of these documents
 Don’t re-invent the wheel
 MaRS has developed templates based on extensive
review of industry best practice materials
Slide 30

31. Evaluation criteria for a new venture
Large and Growing
1
Market Opportunity
Your business addresses a large,
growing and global market. You
have a clear understanding of the
customer segments and competitive
landscape in the target market.
Experienced Sustainable Competitive
4 2
Management Team Advantage
Your team has people who are leaders You have a protected technology that
Key Opportunity
in their field. They have a strong will provide sustainable competitive
customer focus and specialized advantage for the business and its
Requirements
knowledge of relevant sub-sectors in customers. You have a product
the industry. Ideally, your team should development roadmap that
have people with prior experience in a addresses regulatory hurdles and
technology start-up. demonstrates your ability to grow
Financial Return on your business.
3
Investment
You have defined how the company
will make money. You have
developed financial projections that
demonstrate Value Creation based
on real-market validation and input
from paying customers.
Slide 31

32. Outline
 Executive Summary
 Company & Opportunity Summary
 Product & Technology
 Market Size and Growth
 Sales and Marketing Plan
 Competitive Overview
 Operations Plan
 Management Team
 Financials & Investment Requirements
Business Plan
Slide 32

33. Outline
 Company Description (1 paragraph)
 Company Overview, Management & Vision
(2-3 slides)
 Need & Existing Solutions (1-2 slides)
 Technology, Products and Product Rollout
(2-3 slides)
 Market Opportunity (1 Slide ,Graphical)
 Competitive Overview (1 Slide , Largely
Graphical)
 Sales Strategy & Channels (2-3 slides)
 Partnerships and/or Partnerships strategy
( 1 slide)
 Financials & Path to Liquidity (2-3 Slides
(Largely Graphical)
PowerPoint/Investor Deck
Slide 33

34. Outline
 Company Description (1 paragraph)
 Basic Need & Company Solution
(1 paragraph)
 Technology and Product(s) (1 paragraph;
diagram)
 Value Proposition (couple of bullets)
 Market Size and Growth (diagram)
 Sales Plan (1 paragraph)
 Competitive Advantages (couple of bullets)
 Management (detailed bullets)
 Revenue Growth Projections (diagram)
 Financing Requirements (1 paragraph)
Executive Summary
Slide 34

35. Advice from the trenches
 Practice, Practice, Practice
 Different versions for different people
 Management vs. finance vs. technical
 Version control
 The main idea of all of this is to entice investors/
partners to take a deeper look
Slide 35

36. http://www.youtube.com/watch?v=nkuOuxRD1Bc 5:36-6:29

37. Veronika Litinski
Director, MaRS Discovery District
T 416-673-8113
E vlitinski@marsdd.com
W www.marsdd.com