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Principles of Business Finance (PBF)

Venture Pitch

Objectives

• To simply and persuasively communicate the vision of a business. • To find the most marketable aspects of a business and weave them into a credible story. • To determine how a company may approach the early stages of their company financing. • Learn proper ways to approach an equity investor.

Overview

You have opened your business using funds from your own savings and friends and family. Having been in business for a year, you have made the decision to expand and need to approach an equity investor for additional capital. Prepare a highly-persuasive and professional venture pitch with your group and present it [online = narrated keynote exported as Quicktime]. A venture pitch is an overview of an idea for a product or service. Sometimes called an “elevator pitch,” this presentation conveys the basics of who you are, what you do, and how you help your target market, all within the amount of time it takes to ride on an elevator.

Know your Audience

Your audience consists of a panel of venture capitalists (your instructor and classmates), and you have the opportunity to present your pitch during class. The main purpose of the venture pitch is to get your audience interested enough to ask you for more information.

Requirements Persuasive Pitch

Prepare a persuasive “pitch” 3-5 minutes in length. Speak professionally. Be creative but realistic.

Peer Feedback (Campus Students only – Q&A session)

• Would you invest in this company? Why or why not? • Ask at least one question to each team.

Online Students – EXPORT your narrated keynote TO QUICKTIME. Campus Students – One team member submit Keynote.

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Instructions ü Find a business idea that is entertainment-related (or use the 2Live Venue) ü Create a 3-5 minute presentation based on your company ü Answer some of the following questions that apply to your idea

• What do you do / what does your business do? Briefly explain what your

product or service is

• How much money do you need? (example, “we’re seeking $200,000 in venture financing in exchange for a 40% stake in the company).

• Who needs your product or service? a very specific narrowly-defined

target market, for example, 30-65 year-olds who live in suburban neighborhoods.

• Why do they need it? quickly explain why your target market needs what

you are offering

• What is your business model? a concise statement about how your business will generate a profit. Example, “we will sell retail products at 50% above cost”

• How are you similar to other businesses? help people understand what

competitors you’re similar to, so they can easily categorize your business.

• How are you superior to other businesses like you? help people understand your competitive advantage and what makes you stand out above others. Do you offer better quality products? Do you offer more services? Do you offer the same service at lower prices?

• What is the real opportunity? help people understand the market

conditions and trends that present you with a unique opportunity, using statistics if possible.

• Why are you the best person to deliver this product or service to this

target market? What skills and expertise do you need and do you need a team to execute your plans?

• How much money did you bring in last year in sales? Net Profit? how did

you achieve this? (example, by closing ten new consulting contracts, selling 250 t-shirts, etc.)

• What are your plans for expansion?

Important Note:

Although this project is expected to be 3-5 minutes, try focusing the opening part of your presentation on what would be considered a traditional “elevator speech.”

The Nine C’s

(source: Elevator Pitch Essentials, by Chris O’Leary) 1. Concise

2. Clear

3. Compelling

4. Credible

5. Conceptual

6. Concrete

7. Consistent

8. Customized

9. Conversational

Word limit: “most people can comfortably speak at around 125 words per minute. As a result, when it comes to a word budget for your elevator pitch, you’re talking about 25 or so words on the low side and 250 words at the absolute maximum. If in doubt, you should stay under the 250-word limit because it is much better to speak slowly and in a calm and relaxed manner than it is to be rushed. By rushing through your elevator pitch, you are more likely to damage your credibility by sounding hurried and disorganized than you are to help yourself by getting in that one extra sentence.” (Source: www.elevatorpitchessentials.com)