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Pitch Perfect by Haje Jan Kamps - Coggle Diagram

- - - - Do you have what it takes to conjure this project from thin air?
      - Are you able to attract and lead people who can help you along the way?
      - Do you have what it take to keep on the right track as everything in the world conspires against your company success?
    - - Are you coachable?
    - - Do say you dont know and promise to get back back to them is the right thing to do (if you dont know what they are asking)
  - - - Gates and Callbacks
        
        Gates are elements you have to pass through in your story
        
        Loose thread, tension builds and release
    - - Remember you will be giving this pitch many, many times
        
        Be well rehearsed
        
        Failure to practice means you might end up forgetting to mention key parts of your story
    - - Mentally keep track of what the next gates is and gently guide your story in that direction. Becomes easier with practice.
        
        You slides only as a prompt, but mental checklist is important
  - - - In the morning, they may have had a board meeting with another portfolio company, and they may be slightly preoccupied with the challenges that came up there
      - They probably have two more deals they are working on at the same time, and they may have seen two other pitches already that day
      - There are
        probably three hundred emails waiting in their inbox.
      - They walk into a room, and there you are. You’ve connected your laptop to the meeting room screen.They sit down. They will probably have glanced at your deck earlier in the day, and an associate may have briefed them on what your company is doing
      - Might have lot of preconceived notions about your company
    - - Limited Partners
        
        The “problem” VCs are trying to solve is that their LPs have invested money in the venture fund, and they would like an outsize return on that investment
        
        The “solution” they are providing is the investment thesis—the theory behind why they are investing in a particular stage and type of companies
        
        Top three things investors care about are simple
        
        The quality of the team (are you the right people to solve this problem?) and the ability to attract great talent (can you attract more people to help you fulfill your mission?)
        
        The size of the market—and whether it’s growing
        
        The problem you are solving—and whether it’s worth
        solving at a venture scale
  - - - Put their laptop aside and lean in to pay attention to the pitch
- - - - Where you park your money when you are not using it
        
        Diversification of AUM
        
        Savings, Debt, Stock Market, Private Equity and VC
      - Might be high-net worth individuals, pension funds, university endowments, corporations or even governments
        
        Limited Partners (LPs)
        
        From LPs point of view they invest $10m and want $200m (at least 20x)
  - - - Do research to create an investment thesis
    - - Will explain what the VC firm believes is going to happen over the next decade and why it has a fighting chance at giving the LPs the return they so desire
      - Can be broad or narrow
    - - No product or revenue yet (pre-seed)
      - Investing early is high risk/high return
    - - Before talking to the VC firm do a research on their investment thesis
      - Ask about their LPs
      - You may not get an answer, but asking the question shows that you understand what is going on
  - - - Once investment is made the money is "locked up" until a liquidity event
        
        Exits can be of different ways but 2 obvious ones are
        
        Acquisition
        
        Acquihire is acquiring a company for the team
        
        The company buys all the shares of the other company and VCs gets a payout on the number of shares owned by them
        
        IPO
        
        Private equity to Public and the shares become liquid in the stock market
        
        No exit - No payout
  - - - If $100m is deployed over 6 years, the VC firm get 2% of $100m * 6 years = $2m per year and $12m throughout the period
      - Covers the expenses, wages, legal, accounting, office, travel and other costs
    - - Simplified version: If a $100m fund return $400m across the portfolio, then 20% of $400m is $80m cut is the carry
      - Carry is where the VC firm makes most of the money
  - - - The big hits have to make up for failures
  - - - Breakneck speed to see a return in a 7-10 year time horizon
      - VC treadmill you have to continuously raise money 12-18 months
        
        until company become self sustaining or has an exit
- - - - Difference between send-ahead deck and a presentation deck
    - - Fonts are large- readable across the room or screen without squinting
      - Font size greater than 30
    - - Think about putting graphs, because investors might be reading graphs without listening to you
    - - It is not a keynote, its a conversation, try not to include animations or builds
      - You will be clicking lot of nexts with complicated builds
    - - Opening slide summarizes everything you do: "Uber for dog-walking"(Wag); "Amazon for art" (Etsy) - Its is a good starting point
      - Final slide: Thank you OR Any Questions? with your contact details
      - Dont keep a weak final slide; like a weak GTM
- - - - For some slides you can combine together
  - - - At the end say " That's our full vision, but to get our foot in the door, we are focusing on a specific part of this problem first" which take you to the product slide
  - - - One, your product could pivot further down the line as you learn more about the market, so dont commit too hard to this implementation
      - Two, you are buried deep in the company, and the product is probably at the top of your mind. What interests the investor is how this is going to make money in the short, medium and the long term
  - - - How big is the market you are operating in?
      - Is the market growing, stable or shrinking?
  - - - this company can raise money in a single slide
  - - - Drones and VR, for example, couldn’t have happened until smartphone manufacturers moved the needle for cheap, powerful, miniaturized technology. The electric scooter rental tech became possible because it suddenly became cheap to combine GPS and controller technology with electric scooters. If regulatory, macroeconomic, or technology makes your company possible now when it would have been unfeasible 6 years ago, include that in your story.
  - - - What is the cost of goods sold? (COGS)
      - What is the bill of materials? (BOM)
      - What is CAC?
      - LTV?
  - - - Which market you tackle first, how will you reach them, and how will this help you unlock additional markets?
  - - - Ex Dishwasher
        
        Direct: Other Dishwashers
        
        Indirect: Wash by hand, disposable plates or have a maid
      - Make sure you know what they are and how they impact your business
  - - - What milestones will you hit in terms of product launches, user growth, hiring goals and other metrics?
      - Ideally the money you ask should map to your operating plan
      - If it doesnt have a good explanation for that
  - - - We are building a company for ages. We are planning for an IPO in 7 years or less and if the opportunities come up before then we will discuss it with the board"
        
        You are conveying multiple things: You are in for the long term for building a valuable company, and you know there's a dynamic in place that the board(Investors) get a say in any exit conversations
  - - - Lead with a strong point and hook the investor's attention
      - Start with something that is different from other pitches
- - - - Most funds have a minimum and maximum check size and a min/max round size
    - - Like B2C or B2C or B2B2C
    - - Some funds only invest in verticals or avoid certain verticals
    - - Some funds will only invest if they can own a certain percentage of the company
    - - Only invest in a particular school/college alumni
    - - Some firms focus on investing along demographic boundaries—young founders, older founders, Latinx founders, female founders, founders who have been in prison, and many more.
    - - Almost all investment firms have geographic boundaries for where they source deals. They may invest only within—or without—certain areas, states, countries, or regions
    - - Possibility of an outsize return. In venture capital, most funds try to make investments where there is at least a possibility that every investment “returns the fund.” In other words, if they have a $100m fund, and they make $5m investments, they can make 20 investments in total. Each of these investments should have at least the outsize possibility of a 20x return—turning the $5m investment into a $100m return on investment. If your investment is looking interesting, but the investors believe that you would be a 3x return at best, you probably wouldn’t raise money
  - - - it’s okay to ask
        what aspect of your company isn’t a good fit ?