How to Pitch to Investors

@NYUEntrepreneur
How to Pitch
to Investors
Frank Rimalovski
Executive Director, Entrepreneurial Institute
Managing Director, Innovation Venture Fund
Mar 4, 2017

@NYUEntrepreneur
Topics
u When to Pitch
u Role of the Pitch
u Before the Pitch
u Elements of a Good Pitch
u Frank’s Pet peeves
u Q&A

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When to pitch?

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Venture Funding Lifecycle
4
①
Discovery
②
Validation
③
Customer
Creation
④
Company
Building
Test
assumptions
about
customer
needs/problem
& develop MVP
Seek
Validation that
people are
interested in
your solution
Begins to build
demand &
improve
efficiency of
customer
acquisition
Drive growth
aggressively
& execute
business model
Invention
& ideation
Grants,
Competitions
Founders +
Credit cards
Grants
Crowdfounding
Customers
SBIR/STTR +
Accelerators
Friends & family
Angels
Seed funds
Venture
capital
funds
Leasing
Factoring
Vendor finance
Private equity
Public markets
Valuation*

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Role of the pitch?

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Why do we pitch?

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To raise money?

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To sell shares!

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Raise money when
you can raise it!
Not just when you need it!

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The Other Role of the Pitch
u Investor pitch is a proxy…

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The Other Role of the Pitch
u Investor pitch is a proxy…for your ability to:
o Recruit talent & lead a team
o Sell to customers
o Attract partners
u Tell a story & engage your audience
u Cover the bases…not just your product/tech
u But, it doesn’t stop with your pitch deck

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But, you definitely will not raise
money on a bad 1st pitch
You will not raise money
solely on a great 1st pitch

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Goal of the pitch is to
get another meeting!

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Before the Pitch

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Critical Questions to Answer
u When to raise & why now?
u How much to raise?
u What are you looking for in an investor?
u What will you spend the money on?
u How long will it last?
u What will you accomplish?
u What are investors looking for in you?
u Why should they invest in you?
u How will they make money by investing?
u Will you need to raise more? If so, how much &
when? What are those investors looking for?

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If you can’t answer all
those questions, you
are not ready to raise!

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Exploratory/
feedback meetings
(aka customer discovery!)

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Investor Considerations
u Stage
u Sector focus
u Fund lifecycle
u Recent activity
u Lead or follow?
u Investment pace
u Typical check size
u Potential warm intros
u Value added services
u One & done or follow-on?
u Directly competitive portcos

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Information Sources
Crunchbase/
CB Insights/
AngelList
Fund
Websites/
Blogs
News/Media
Mentors/
Coaches/Other
Entrepreneurs
Service
providers
Entrepreneurial
Institute
Team

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Elements of a
Good Pitch

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Outline
1. Welcome: Your biz thesis; 10-20 secs to engage
2. Problem: You solve & who you solve it for (target customer)
3. Solution: Your solution with compelling, quantifiable benefits
4. Product: Your product, how it works & evidence that it does
5. Revenue Model: How you make money
6. Market: How much money you could make if you dominate
7. Competition: Who they are & why your solution is better
8. Cust Acq: How acquire & retain customers, profitably & at scale
9. Unit Economics: How much money you make
10. Traction: Proof that customers/users love your product
11. Team: Experience/expertise to own this opportunity
12. Funding: How much, uses, accomplishments & runway
13. Summary: Market + Differentiation + Team + Traction

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Welcome
Gleamr
A ma rke ta Uber for mobile auto details
“Get an affordable, professional auto detail
wherever you are, whenever you want”
Copyright 2015 Gleamr. Created by PitchDeckCoach.com
On demand

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Problem
Problem 2
Busy consumers lack an easy way to get their car
professionally detailed at their home or office
• No single view of currently available detailers
• Few reviews to guide selection
• Little opportunity to negotiate prices
• Visiting a detailer’s shop takes too much time
Mobile auto detailers spend too much time/money finding
customers when they would rather be detailing cars
• Spend ~$12K/year on marketing (National Auto Detail Assoc.)
Too broad
• quantify problem/frequency
• quantify downside of“too much time/money”

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Solution
Solution 3
Gleamr iPhone app and website.
“Get an affordable, professional auto detail
wherever you are, whenever you want”
SAVE
TIME
detailers come
to their home or office
SAVE
MONEY
detailers compete for
their business
GREAT
JOB
detailers work hard for
great reviews
CONSUMERS
SAVE
TIME
less time
chasing customers
MORE
MONEY
more time
detailing cars
GROW
FASTER
great reviews + great
prices = more work
DETAILERS
Show me
the Money
Show me
the Money

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Product
Product 4
2. COMPARE
REVIEWS & PRICES
1. BROWSE
AVAILABLE DETAILERS
3. SELECT,
BOOK & PAY
Amazing
screenshot
Amazing
screenshot
Amazing
screenshot
• Option to add tip after job
• Review required after job
• Standardized services & prices
• Detailer can discount (bid) on
the fly based on demand
• Filter by
date/time/availability/ratin
gs/reviews/bid
2 patents pending

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Revenue Model/Unit Econ
Business Model
How we make money
5
We charge detailers a 15% transaction fee
Gleamr
Job $75.00
Detailer $63.75
Gleamr $11.25
Gleamr’s fee is a cost of revenue w/ guaranteed ROI
vs. a marketing expense w/ no guaranteed ROI
COGS ?

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Market
Market
Top Down – USA only
7a
$36
Billion
TOTAL US
AUTO DETAILING
Source: [Some reputable source]
$12
Billion
MOBILE US
AUTO DETAILING
Source: [Some reputable source]
~$2
Billion
GLEAMR
MARKET OPP
15% transaction fee

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Market
Market
Bottom Up – USA only
7b
US Autos on the Road1 270 Million
Total Detailed @ 33%2
90 Million
Total Mobile @ 33%3 30 Million
Mobile Details per Auto per Year 6
Total Mobile Detailed per Year 180 Million
Average Mobile Detail Price4 $75
Total Mobile Detail Sales per Year ~$14 Billion
Gleamr Opp. per Year @ 15% ~$2 Billion
1. [Some reputable source]

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Competition
Competition 8
MORE CONVENIENT
LESS CONVENIENT
LESS EXPENSIVEMORE EXPENSIVE
Gleamr
Competitor
Logo
Competitor
Logo
Competitor
Logo
Competitor
Logo
Competitor
Logo
Competitor
Logo

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Customer Acquisition
Growth Strategy
How we will scale our business
9
• Online marketing
inc. SEM, SEO,
SMM, daily deals
• Refer-a-friend
discounts for
consumers
• Volume/loyalty
discounts for
consumers &
detailers
• Incentive programs
for HR and office
managers
• Dedicated customer
service reps for each
DMA
• Gleamr staffed
community message
boards for
consumers (public)
and detailers (login
required)
• Consumer Product
Advisory Board to
drive consumer
features
• Detailer Product
Advisory Board
to drive detailer
features
• Add Android App
• Add Website
MARKETING
& SALES
Acquiring customers
CUSTOMER
SERVICE
Keeping customers
PRODUCT
DEVELOPMENT
Staying competitive

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Traction
Traction
Detailers and consumers love our service…
6
Detailers Users Jobs
Gross
Revenue
Gleamr
Revenue
LAUNCH
0 0 0 $0 $0
June
10 100 90 $6,750 $1,013
July
50 500 450 $33,750 $5,063
August
200 2,000 1,800 $135,000 $20,250
Sep
400 4,000 3,600 $270,000 $40,500
Oct
800 8,000 7,200 $540,000 $81,000
Nov
1,600 16,000 14,400 $1,080,000 $162,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
1 2 3 4 5 6
Revenue by Month
Key Metrics
LTV = 5x CAC
More of
these
Less of
these
Nice touch, but unsubstantiated

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Team
Jon Doh (Founder/CEO)
Co-founder/CEO @ ArtFinder (sold to Ebay). Prev. LinkedIn
Trish Taylor (Founder/VP Engineering)
Co-founder/VP Eng. @ ArtFinder (sold to Ebay). Prev. Facebook
Ben Brando (VP Sales/Marketing)
Prev. HubSpot
Will Wachon (Advisor)
Founder/CEO @ Speedy K (Mobile auto detailing franchise)
Sue Smead (Advisor)
SVP Corp Dev @ Ebay
Meg Mitchum (Advisor)
CMO @ HubSpot
TBH (Director, Customer Service)
Team 11
Nice
touch

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Funding
Funding 12
Bootstrapped by founders thru MVP and first 6 months
Seeking $2M Series A
• Target close by EOQ3
• $600K committed
So we can
• Reach $48M in sales
• Scale/refine marketing/customer acquisition
• Scale customer service (detailers)
• Scale infrastructure
Length of runway ?

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Summary
Summary 13
Big Opportunity: First mover in $36B US auto detail market
Strong Team: Deep market/technology/execution experience
Sustainable Technology Advantage: 2 patents pending
Significant Traction: 1,600 detailers, 16,000 users, $162K/mo
Seeking $2M Series to achieve $6M run rate

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The Business Model Canvas
Revenue Streams
Channels
Customer SegmentsValue PropositionsKey ActivitiesKey Partners
Key Resources
Cost Structure
Customer Relationships
Designed by: Date: Version:Designed for:
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What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
is your business more
Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)
Value Driven (focused on value creation, premium value proposition)
sample characteristics
Fixed Costs (salaries, rents, utilities)
Variable costs
Economies of scale
Economies of scope
Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
channel phases
1. Awareness
How do we raise awareness about our company’s products and services?
2. Evaluation
How do we help customers evaluate our organization’s Value Proposition?
3. Purchase
How do we allow customers to purchase specific products and services?
4. Delivery
How do we deliver a Value Proposition to customers?
5. After sales
How do we provide post-purchase customer support?
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?
Who are our most important customers?
Mass Market
Niche Market
Segmented
Diversified
Multi-sided Platform
What type of relationship does each of our Customer
Segments expect us to establish and maintain with them?
Which ones have we established?
How are they integrated with the rest of our business model?
How costly are they?
examples
Personal assistance
Dedicated Personal Assistance
Self-Service
Automated Services
Communities
Co-creation
What Key Activities do our Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
categories
Production
Problem Solving
Platform/Network
What Key Resources do our Value Propositions require?
Our Distribution Channels? Customer Relationships?
Revenue Streams?
types of resources
Physical
Intellectual (brand patents, copyrights, data)
Human
Financial
Who are our Key Partners?
Who are our key suppliers?
Which Key Resources are we acquiring from partners?
Which Key Activities do partners perform?
motivations for partnerships
Optimization and economy
Reduction of risk and uncertainty
Acquisition of particular resources and activities
What value do we deliver to the customer?
Which one of our customer’s problems are we helping to solve?
What bundles of products and services are we
offering to each Customer Segment?
Which customer needs are we satisfying?
characteristics
Newness
Performance
Customization
“Getting the Job Done”
Design
Brand/Status
Price
Cost Reduction
Risk Reduction
Accessibility
Convenience/Usability
types
Asset sale
Usage fee
Subscription Fees
Lending/Renting/Leasing
Licensing
Brokerage fees
Advertising
fixed pricing
List Price
Product feature dependent
Customer segment
dependent
Volume dependent
dynamic pricing
Negotiation (bargaining)
Yield Management
Real-time-Market
Your Pitch Canvas
Team
Team
Customer
Acquisition
Unit
Economics
Problem
Revenue
Model
Product
Funding
Market
Size
Solution
Funding

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Frank’s Pitch
Pet Peeves

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Where are you on the Spectrum?
Accentuating
the Positive
Stretching
the Truth
Exaggerating
Lying &
Obfuscating

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Lies Entrepreneurs Tell
We’re signing a
huge contract
next week!
Our round is
almost fully
subscribed.
We’re in over 500
accounts already!
We’re increasing our
top of funnel sales
leads by 10x.
Other investors
aren’t asking for
this information.
Other angels are
already funding.
We have 3 patents.
Our CTO is full time.

@NYUEntrepreneur49
“The key to
success I
know not, but
trying to please
everyone, the
key to failure
is.”

@NYUEntrepreneur57
Useless animations

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Frank’s Pitch Pet Peeves
u Off target pitches
u Ideas
u Typos/poor grammar/jargon/wordiness
u The “big windup”
u “No competition”
u 100% outsourced development
u Business plans/Long documents
u Large attachments
u Secrets & NDAs
u Defensiveness
u Unresponsiveness
u Useless animations
u Slides like this!

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Questions?
entrepreneur@nyu.edu
@nyuentrepreneur
entrepreneur.nyu.edu
16 Washington Place

How to Pitch to Investors

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