Part of the series of Equity Investment Webinars produced by the University of Essex and UEZ.
waiting for everybody to come on board you have in front of you your panel for today um myself is John Stenhouse we have Susie ker Willam Miller nit and Patel but uh for the time being we’re just waiting for people to log on we know how long it takes to get through the system and to come on board so just give it a minute or so and we’ll watch the number count as they’re coming in I don’t think you’ve got time to make a cup of coffee or a pot of tea but we’ll just see how it goes we’re just waiting for some last minute people to join us uh this is the University of Essex University Enterprise Zone investment Readiness series we seem to have a few late comers we’ll just give it another minute please be patient well I think that’s going to be it for today so I I will now start the webinar properly please be note that this webinar made available on YouTube later on but not right away it does take time for editing thank you for joining us today my name is John Stenhouse and you’re at the University of Essex the university Enterprise Zone uh which is run on behalf of the students academics and businesses in the business Community we like to uh extend our knowledge base to the business community and hope that they join us with this so we can now commence okay so the topic of today is getting investment ready the things that you need to know that investors will want to ask you about your business when you’re going forward to raise Equity investment but the same applies actually for any form of investment in your business whether it be Banks or loans or any kind of Finance you need to have a good business plan in place and the pitch deck that you put in front of investors is something which stems from that business plan but it’s not an actual business plan and William and nit our guest speakers today are well-versed in actually helping businesses prepare to be in front of investors so as I say this session is being recorded for those of you who have just joined us and it will be made available now for the purpose of today’s uh webinar it is quite detailed and it does come in two parts and there will be details of the second part which is next Tuesday shown at the end of this presentation and I do hope that you register for that as well to follow on from what we’re talking about today if you do have any questions and we do encourage audience participation I can’t emphasize that enough there’s no such thing as a silly question and we welcome all your comments as they come through but please use the Q&A which normally appears either at the bottom top or possibly the side of your screen depending on which kind of device you’re looking at um so please use the Q&A uh we do not have a chat facility um so Q&A please and we will answer those questions on your behalf at the end of the session you’ll probably find a lot of the questions will be answered during the course of the presentation now for the benefit of those of you who have not used these webinars before they are interactive and we do expect audience participation so I am now going to introduce William Miller and nit in Patel and today I believe it’s nittin who’s going to be leading on the first part of the presentation so William would you like to share your screen please and we will step out and allow you to speak thanks John just give me a few minutes to get the technology working there we go yep okay you want to go to the next slide Bill yep agenda slide I think it should be yeah and it should drop down come on right so that’s not working so let’s do it this way there we go and then yep okay let let us start uh with the process of uh talking through this webinar so myself and Bill as as we introduce ourselves when we’re doing this on a onetoone basis for the potential people who want to get onto the Essex Angels platform is that uh myself and Bill have got a strong background in Commercial Business uh and so Bill will tell you what he does when he comes to talk next uh and basically my sort of aim when I’m going through these decks is to look at how you propose to get your product into the market and that’s very keen to sort of in my background of big business launching products because generally they know the market they know the conditions they’re going to have to launch into and it’s sometimes groundbreaking sometimes it’s an extension of something as exists and so if you look at a typical Venture then they all fall into certain categories uh but they also have something different which is why you know we put it into the market to make sure that you get traction with customers so today we’re just going to talk about how you can attract investment for these Ventures and what needs to be in the deck and then we’ll summarize some of the key points Bill do you just want to add a bit to it and then we can go to the next slide okay okay my my background is from an engineering background and I used to lecture in University then I joined BT and developed uh products and services for the network which required the development of business cases and business plans and delivery plans and that kind of thing so same kind of structure as an entrepreneur seeking investment would look for and then I moved out and worked uh in the new anglea growth Hub and that was all about helping smmes get financial support so I understand from large business and small business how they need financial support and and Equity investment and that kind of thing and how to uh work so that you can get it so I’ll move on to the next slide okay so when people start talking about Equity investment the first thing they should really consider for themselves is whether it’s right for them and one of the big challenges and I used to work for a a private owner who actually told me that he would never go on the stock market or ask anyone else to invest because he didn’t want anyone to tell him what to do and that’s sort of quite a key thing because when you ask for investment and you get other people to invest in you then they have a potential of being able to be involved in that now sometimes that’s good and sometimes that’s bad but you do lose control of the overall ownership of the business so just be weary that you’re keen and you’re sort of the person who can listen uh with the guy’s input so Equity is about selling a bit of your business for cash typically that money is outlined to be used to grow the business or make the business slightly different to what it is sell it on marketing and that type of thing so you can see from the deck typically investors inv West to look for returns uh and the sort of businesses we generally talk about as startups are very early stage most of the time they don’t have big revenues but they have a potential so what we look for in the deck is how you present your sales across to them in minimizing the risks that is associated with investing in this type of business so everything we go through in making sure that the deck fits to the Investor’s eye is trying to ensure that you use the maximum of what you’ve actually achieved has a benefit to you when you’re asking someone to invest bill here the I think the important thing to remember is if you’ve decided that you are going to seek Equity investment then realize that you’re selling part of your business so that’s the story that you’re presenting to the investor the story that you’re presenting to the invest investor is the business story how you are going to make money from the product or the service that you’re selling and how you’re going to deliver it into the marketplace and attract customers so that you can generate Revenue so that’s what the pitch deck is all about about and we come back to that in a moment uh it’s presenting that story to the investor but it’s a story about the business as an entrepreneur you’ll be developing products or services that will serve a market and you’ll have a certain group of customers that you’ll be aing to sell those two but that’s not the story you’re telling the investor you’re telling the investor the business Story how I’m going to use those products and services to generate money to uh get them a return on the investment they make and that’s something that you have to remember when you’re creating the pitch deck the person you’re speaking to is the investor it’s about them and if you decided to go and and do seek Equity investment then you’ve got to look and see can you satisfy the investors requirements because they’re looking for a return on their investment so are you going to be able to make enough money to satisfy that return that they’re seeking it may be that you’re creating a business that doesn’t do that but it’s going to support one or two people and it may be then what what’s called a lifestyle business and there’s nothing wrong with that that’s a good thing to do but but investors will be looking for something that grows and while we’re talking specifically about the pitch deck and the contents of it here remember that there’s other uh documents that you’ll need as part of that journey to seek investment so you’ll need to have all of your company registration details in place you’ll need to make sure that shareholders are all current shareholders are all in agreement to make sale you’ll have your articles of Association your table your term sheet being developed and if you haven’t got those then we’ve got some pre-recorded webinars available on our YouTube channel that go into that in depth and there will be some upcoming webinars that will cover some of this as well and don’t forget that there are other forms of investment available to you um such as uh debt funding we go to um a broker or a bank that will lend you the money on grants and crowdfunding which is a specialist form of equity Investments so moving on okay so your sales pitch is the pitch deck and that that’s really broken up into sort of three key areas the concept the business and delivery within that you can see for yourself on the the slide there about the sort of things that we want to make sure it contains and the problem statement is a key because most people want to know what the business is trying to solve and most solutions and problems come from people’s knowledge of that area so typically it’ll be something that you face as a person in your daily job that you can’t find an answer to or as a customer you don’t think it’s up to the standards that you want and you can do something different so generally the concept is around the knowledge you have or it could be some think as we’re finding more and more that people have studied something uh at University either cording or doing some uh physics and achieve some PhD work and that turns into a business so really even at that stage trying to identify the solution in the market is important to get across now one of the reasons as well that when people talk to myself and Bill as investment ready a lot of people would have picked in a lot of places by then but our key has been towards what the investor would look at in the deck and we simplify that a little bit by saying look he’s looking for a good idea but he’s not necessarily looking just at the idea so that’s a slightly different stage that people have in the past been looking at as a potential investment and get people who can support them but on the platform we actually look for for people already so it is much more about can they see value can they see how you’ve reduced the risk of the investment they’re going to put in and that’s about how far down the line you are before you’re talking about them investing uh the market isn’t saturated or it’s reasonably unique uh so what we tend to say is use every positive element of what you’ve done to show the investor that you’re minimizing his risk of you achieving the targets because a lot of work you’ve done up front is going to make that easier bill so all all investors are people and as we know all people are different they’ve got different interests and different things that excite them and and different experience but if you speak to investors there’s kind of three questions that they they’ll ask at a very top level so the the three questions they ask are what is the the pain point or what’s the problem that you’re solving how many people have that problem and who are they and then the second question they’ll ask if they believe that that uh is a valid solution to a problem which is the concept then they ask can can you make money from this business and that’s what we call the business validation that’s all about uh your business model you’re Marketing in sales and your Revenue so if we believe that there’s a business idea there the concept is good it money can be made then the investor will ask well can this be be delivered into the marketplace and that very much focuses on the team but is there any supporting evidence that says that H it can be delivered so that will come from your current status and then the question is what happens when it goes into the market what does the competition do and uh are they going to move towards you and can you protect what you’re doing so that’s about the competition and the IP itself so those are the three question questions is is there a paino and can it be solved can you make money and can you make this business work and you wrap that all together tell a story tell a story in such a way that there’s no technical jargon involved there aren’t any acronyms because not every investor is a specialist in your field but they may be looking for a good business idea spell check it to show that you could take care in preparing your documents try and put one idea per slide so that the investor can flow through the deck and and uh doesn’t get confused or goes off on a sid track and we’ve said that that you could should be able to get the complete picture in 15 plus or minus three slides so we’ll go through each one of those uh bullets in more detail and explain the kinds of things that we’re looking for and the kinds of information that you would want to consider putting in the the deck itself okay so the problem statement what you’ve got to do with that is really try and Associate the problem to a real world situation because today a lot of people will come along to us and say I’m creating a platform what’s the platform or what what is it going to solve so I think it’s very important that you have a very graphical understanding in your mind about what is the problem you’re solving even if it’s getting something from A to B what are the key differential between what’s happening now and what you’re going to put in place that will make this better so it’s sometimes hard to do because in some very early stage uh startups they may not even have a the use for the solution but the solution could be good now that generally wouldn’t work at our stage because the investors who sit on the platform are looking for a business that’s a little further on but that shouldn’t stop people who watching getting into startups there’s other places you can sort of sit through and work work our way through how you entice people to help you at that early stage but this is very much about getting that problem to a level that it’s practically understood and sort of ready for the market to be wanting to start using it because you are 70 80% to delivering it bill I think one thing to said but the problem stippen is that this is really the the thing that kicks off the deck itself uh maybe some reductor information before that but the problem is starting to get into the meat of what your business is all about so you’ve got to be able to explain that in such a way that the investor will understand it um and the problem then generates the solution so the next sort of slide will be about the solution itself but if you have the problem and you can state it clearly and state it in a way that the investor will understand it then they they can themselves from their own experience begin to see what’s happening so problem creates the solution and who has the problem defines the market now it could also be that this is an emerging opportunity because there’ll be changes in the external environment you know through legislation technology and what have you so big things like reduction in plastic uh at the moment Net Zero movement uh response to electricity price races all those kinds of things can generate those opportunities for you in the marketplace but once you’ve defined the problem you need to find the solution okay so as we said in a lot of cases people actually think they have the solution and then they find the problem because as I said a lot of the ideas come from uh situation that you face yourself and you don’t think there is actually a good solution for you to use so you think about how you are going to do that hence you have a typically thought process that says I can solve that and then my idea comes along but unfortunately in a lot of cases you still got to go through the process as we outlining here because most of the people you will be looking to invest into you won’t necessarily be able to either take the time to talk to you to understand the deep understanding you have or they have so many other opportunities to look at that they pick out the ones that can see and understand easiest so hence the the step of the solution again goes back to making sure that it’s a real solution for a real problem or there’s enough in there to give the investor an indication that there is a a requirement at this sometimes we don’t know what the what the requirement is going to be and you know we’ve all heard of stories typically in in innovation that says I tried to do something else and ended up doing something that was far more uh valuable so what we don’t want to stop it is people having a goal but what we do say is make sure that you spend the time to clearly understand what you want to get across to people Bill sorry my my electricity’s died ah I’m rebirthing right can we get on to the next slide can we get to the next I think I [Music] can yep can you see the slides no oh gosh um I can I can well maybe I have to share the screen again yeah John’s sharing that sorry guys I don’t I don’t know what’s happening okay I’m online and seeing you I’m not I think we’re one slide further down maybe no sorry John the other way other way and want that’s okay okay so next one is the one you had Market y okay so the key to any business is really understanding the market and understanding the solution will fit the Market’s need or tailing the solution to ensure that it does perceive to be fitting the market need people have a go and they may have to change little things but they get an advant AG of the changes they make because as we all know most people don’t like change so if you bring something out then the change will be evaluated against the benefit they get what this is showing is people always have a big piece of the market to work into and globally for anything the market is enormous but the opportunity for a specific business comes down to a s small targeted piece of the market whether it’s a country whether it’s a function or whether it’s just one very specific product range within the overall market so what we tell people is really understand the overall market look at this Market that you can sort of work into and then pinpoint the specific Market that you’re going to use into your deck to explain to the investor that you’re going to get into this target market that’s the size of the value of the market this is how I’m going to go about trying to get into it but the other thing that needs to go with this and I think it’ll be the slide next is also the fact that you have to know your competition there’s always someone doing something similar so most people when they tell us that this is very unique or it’s first to the market they really have to be not sort of negative about what they’re doing but a bit more critical so they don’t get to the first stage in front of an investor who traditionally would see lots of these startups and so I’ve seen that two weeks ago or something similar so I think there’s always a challenge to bring out the uniqueness of your Venture and your idea and that can only happen if you know the market you want to enter really well bill can you can you hear me yes yes and if you can see it please add if not we’ll carry on I sorry I don’t know what’s happened I’ve lost my camera and so on and believe it or not I’m getting full fiber Broadband preparation done so I think they’ve done something electricity um what what I was going to say when when we see a lot of business coming to us uh and they look at um the market uh from a topdown perspective they say what’s the global value of this market and then perhaps how much of it worth how much is that worth in the UK and then I can address 3% of it so you get a number like it starts off at several hundred million and then it comes down to several tens of millions and then I’m going to get um a percentage of that which is a few Millions so that’s one way of doing it but it doesn’t actually convey a lot of information however I be I said earlier was an engineer so I kind of like to know how things are going to work so I’d like to know from a bottom up perspective how does it work so if you take an example say was Pete generated a piece of gym equipment which has got a machine learning algorithm in it which adjusts uh the resistance in in um the machines such that that tailor it tailor my exercise program exactly to me then that’s a piece of fitness equipment and then may go and look at the fitness market and see that it’s worth 300 million globally and it’s worth 20 million in the UK and it’s I’m going to grab 3% of that and that turns out to be that number that I’m going to go for but another way of looking at it is how many people are going to buy this piece of equipment so who am I going to sell it to I’m going to sell it to some gyms I’m going to sell it to some football rugby clubs things like that I’m going to sell it to a few individuals maybe maybe some specialist gyms and hotels and I can get the information about that and it can work out that I’ve got maybe uh 5,000 potential customers in the UK and that tells me the size of the market that I’m working from um and that’s much more clearly defined if I do the bottom up build sometimes it’s hard uh to get that information but it it kind of if you do the top down and the bottom up you’ll kind of understand that perhaps the top down information contains an awful lot more uh so if you’re looking at the fitness Market that may be including uh uh all the clothing that you use as part of the fitness Market may be including the the size of the gym and the running cost of the gym and so on so it contains much more information than simply the marketplace that you’re aiming for so I always like to see a bottom up build and I think that’s helpful for the investor as well so we can move to the next Slide John thank you right so the next piece that makes the jigsaw and the story up is about the business model and this is in its simplest form how are you going to make money now in today’s world and there a way people can look at how they can monetize a lot of Ventures it there’s lots of solutions to actually getting people to pay for you but picking the right method for the right target market is very key and generally the model has to be seen to be giving value to the buyer and sometimes people don’t necessarily measure that in the most critical way when they’re looking at their own business and the costs associated with that sometimes people say well this is a better idea than that’s what’s in the market so they will pay me more and that really doesn’t work most of the time sometimes it works so you know we never discourage people we sort of explain to them our thoughts and our experiences uh to sort of balance if they’re at the extreme opposite end of a model that says you know I’m going to get 300 times much than something that’s pretty similar because I’ve got one unique point so it’s very important the other thing that’s come along is this SAS model which again you know people like myself and John have probably seen similar when we used to rent our televisions and pay on a monthly basis so it’s not too far from being around in the past there’s some new elements to it and issues for a new set of ideas where there isn’t something physical that you end up with and you don’t always buy a a physical asset but people are used to it as long as you can explain to them what it means sometimes you know it’s not right for certain types of businesses but it seems easier because you’re asking for a smaller sum so it’s it’s a trend that we have seen quite often but I think it’s something that people are now BEC weary of in terms of signing or what we do find is they sign very early on and then they stop later on so be careful in what you pick don’t always pick what looks like the easiest way to get your first uh invest uh first customer uh make sure it’s long lasting ensure you understand your costs and if you’re going to make uh a venture that is going to be loss making for a period because that’s what you’re aiming for and that’s what you need to get into the market then explain that clearly to the investor so he’s not thinking you know this doesn’t add up Bill yeah I think for for me the business model is sort of showing how the money’s flowing through the business uh where you’re how you’re going to generate Revenue where your costs lie how you’re going to generate your margins and getting your pricing right is really one of the key things that you want to do in that situation it’s usually much more difficult to start with a low price and then have to increase it than to start high and reduce it but you may be constrained by the industry itself because there may be sort of um Fair well understood uh uh pricing models that are used in that industry and therefore you’ve got to follow those but one of the key things is as n says to understand your costs because your costs may be high at the start of the um business and this business Journey but you’ll want to be able to reduce those as time goes on increase your efficiency and hence increase your margin so that you’re able to scale the business as time flows okay John we can move on okay so now we’re getting to some of the key functions that traditional businesses need to make them viable and that’s no different for a startup it’s just at what phases of your sort of development do you start getting serious functions and serious measures around uh whether your business is attracting traction so we tend to talk about sales and marketing together as one function within a smaller startup business because mainly around the cost and ability to have uh the right sort of number of people at the early stage but we think they are very different you know selling something is taking money from people which I found very very difficult and it should be because you know we’ve all worked hard for it and we want to be seen to pay something for something that we’re seeing a benefit of so that’s one side of it and understanding what will make people give you the money for a product or a service you’re offering is very important the other side of that is being able to attract people to look at this which is what marketing is about uh and that in most cases actually is about spending money so that’s why the’re the two ends of a opposite coin uh but they both need to be working together and certainly be integrated well enough from the outside that when you’re marketing something you’ve got the right kit to sell there’s no point marketing something and then not having stock so it’s a very important particularly at early stage where people are sort of have a product bus business and looking to start up the production or the sourcing and don’t have a lot of products in stock or they have a variety of product ranges within the overall category one’s selling really well the others not doing as well and you’re actually promoting something that’s already doing well and people may think you know that that’s a simple solution but it happens and that’s why it needs to be integrated pH I think for for an early stage business um needs to appreciate that marketing is a cost in that business but it’s a necessary cost you you’ve got to Market uh your product or service otherwise you won’t get customers but so because it is that cost in the early stage business you need to be very careful how you are spending your marketing budget and you need to develop some kind of a marketing plan that allows you to monitor uh the results that you’re getting back from your marketing for against the cost that you’re spending uh on it um so that’s a you know something that you you want to consider doing is understanding how your marketing is getting uh benefit um to you the business uh and just a comment about um the um sales Cycles if you’re selling to large Enterprises it usually means that you’ve got a long sales cycle because you’ve got several people in the large Enterprise that you’ve got to convince to buy your product so it means that your Revenue can take a while to obtain and if you’re selling to smaller companies that may mean smaller sales values so that means you need lots of sales to generate your Revenue so you have to be geared up to deal with those in the first case with large Enterprises you need to watch your cash flow and in the smaller companies when you’re selling to them you need to have enough sales effort to go out and grab those sales opportunities so next Slide John please okay so the revenue projection so this is one of the key elements that an investor will measure on whether he looks at your venture or someone else’s or the time scale over when you’re going to get serious Revenue in this case so as Bill will explain a little bit deeper and it goes along with this earlier discussion about building from bottom up so this is about how you’re going to explain to the investor that having started and launched the product in a lot of cases used the investment that he’s already provided because he’s going to provide that on the basis of a lot of early stage assumptions and the assumption that goes here is you’re going to achieve most of the stuff you’ve highlighted within the time scales that you’re say saying you’re going to do it the worst thing we get in terms of decks is they don’t sort of match even with the 18 Pages the story of I’m going to launch a product in March and sometimes the revenues are showing in March and it’s rare that can happen and I think the key to that is making sure that every part of your deck at least in itself is integrated well because what you don’t want is an investor who looks at this doesn’t get it and doesn’t talk to you at all one of the big pluses and minuses as suppos for people who talk to me Bill and John is that this platform is about getting your deck to a stage where it can tell its own story now people who’ve achieved that has been really successful and John can explain you know what we’ve had at the end of this in terms of investment and stuff but because people are used to pitching with them being there that becomes hard so do a lot of work yourself in making sure that the detail Within the deck adds up Bill yeah I I look at the revenue Pro projections as a a you know a mathematical function of the the information that comes out of the business model and their sales projections so you multiply those two together you should be able to get the revenue projections so it’s useful to see the numbers presented as value in terms of um money coming in it’s also helpful to give an indication of you know the profit that you’re going to make make or ebit D figure as well but it’s also equally helpful to understand you know how many sales do you have to make each year in order to generate that Revenue uh and that brought all together gives an investor an indication of you know the sales effort that’s going to be needed is that realistic uh to generate this amount of Revenue does it meet my expectations in terms of return for the investment that I’m going to make so usually you’ll have to construct a detailed models to sitting behind this um the revenue projections and that’s a useful uh thing to have as well when you’re beginning to discuss with the investor so moving on to the next slide please John okay so th this for us particularly as I explained to you very early about our backgrounds is very important this is about knowing your competition this is about knowing what is the difference between what you presenting as an offer to what’s out out there already and why will people come to you is there enough differential in what you’re selling to what’s out there and as I said earlier generally there’ll be something close to whatever you’re doing so in a lot of cases you have to know the market and the product range to show the customer as well as the investor where your advantage is going to come from so we see a lot of ways people go about this using a a strategic Matrix to say I sit in the top corner but what we find best and the hardest for a lot of people to do is this two-dimensional slide where I really ask do you know the product well enough to know what are the key functions a customer is looking for and what are the benefits that you provide against those and red and green ticks show very quickly why your benefits are going to out we the customer uh and obviously things like cost and price match to how good your product is compared to what’s out in the market so this is an important slide it’s part of you know the market intelligence that you do uh and also review you know sometimes you come with an idea and then you have to review the market to make sure there’s nothing like that already or someone’s already doing it then there’s no reason not to do it because there’s always it can compete on lots of other ways but you need to know how to compete if something already exists bill yeah the I find that presenting the competition information as a two-dimensional Matrix is very helpful on a number of levels it gives you a visual understanding of you know how your product or service is separated from everybody else by the number of tcks that it’s got against the the functions but it also helps you understand what’s going to happen when you launch this product into the marketplace how close are your competitors to you and how easy is it for them to incorporate the features that you’ve got which distinguishes you from the market as it is today into their product set so remember the market is always Dynamic things will change as you enter the markets and attract a lot of customers then other people will look at you and say well hey we’ve got to do something similar so you want to understand that and what’s going to happen um there’s also you know people come along and say there isn’t any competition to what I’m doing well there that’s very rarely the case because even if there isn’t any direct competition there is usually some indirect competition you know so there’s the old apocryphal story about uh you know the early American Space Program where they needed something to make notes in the spacecraft in zero gravity so they spent a lot of money developing a zero gravity pen that would write uh in any any environment in space and the Russians just used the pencil so you know while there isn’t a direct competition for the for the pay there was an indirect competition in the form of the pencil so be aware of that and then if you go into the marketplace it’s always helpful to have some way of protect protecting what you’ve done either in the form of patents or design rights and trademarks and and copyright and so on and those actually have some value as well that can be put on the business and help with evaluation so lots of things to think about in the competition and it isn’t a once only um piece of analysis you’ll need to do that as the business moves forward and understand how you’re setting compared to your competitors so next slide please John we’ll just speed up a little bit so we can get the questions in at the end but just on the current status as we’ve already said a couple of times remember what you’ve already done one of the things we find from a lot of good Ventures that we see is they don’t tell the investor what they’ve already achieved uh because as I said early on one of the key things to what an investor is looking for in a early stage fast moving Venture is how much risk is he taking and every time you’ve achieved a goal prior to him investing it reduces his risk so somewhere along that story it’s very important that you put in there the current status and the things that you’ve achieved and how much there sort of left to do uh so it’s very important to know how much work you’ve already done how well it’s done and give that clear indication to the investor bill yeah it’s just it’s just important to let the investor know that there is some validation in what you’re doing if you’ve got say early sales or letters of intent or successful trials running and the further down the line you are towards having a successful product in the market uh is is more attractive to the investor because as newon says the the risk is minimized so next slide please John okay so now now this is a very important part of the Venture but generally I think people start off with a very small group of people a couple of friends who start up a business or two colleagues who have uh slightly differing skills and see the same issue in the market but at some point you’ve got to show the investor that there’s people behind supporting you with a sets of skills you don’t have and that’s a good that’s a reasonable good balance that they need to see because as much as you can have lots of advis and a lot of people who know lots about typically the sort of business you’re doing you also need people who are going to do things to make things happen so for me it’s very important the stage you’re in that you sort of find the balance between people who are helping you learn and understand to the key guys within the team who are going to do and make things happen and deliver but it’s always a balance and the other thing I’d say as you get further down the route this gets harder because you’re then competing for more mature skills with everyone else in the market bill um yeah the thing that people may not realize that is that investors are in not only investing in the business but they’re also investing in the people as well so they’re very much looking at the person you know if you’re presenting face to face but uh if if you’re looking at an individual entrepreneur they’re looking to see and understand is are these people that I can invest my money into do I believe that they have got the capability of delivering what they’ve said so just be aware of of that um in the early stages you probably bring in a lot of advisors but as the business gets older those advisors should tend to sink into the background because you should be having that knowledge and experience within the team itself so next slide please John okay so so this is about really understanding what are you going to do with the money what is your business worth is the money you’re asking for going to be the sort of acceptable level for an investor to accept for the percentage of the business is likely to get for it the there’s no easy answer to the valuation part but certainly having the detailed knowledge of what you propos to do with the money and having targets to achieve those within a reasonably small description when you’re sort of totting up the numbers is very important because if that looks right which is what most imp investors will look at because they will have past experience they will have their own experience of building a business or working particularly if it’s capital investment or marketing type of Revenue cost that you’re looking to support but it’s always important that you know the detail and also to a level that not to the end degree because you know things change but certainly in a big chunk direction if you’re looking for 500,000 that you can roughly tell him where 450,000 of it’s going to go and when it’s going to be spent and what the target of achieving is so that’s one part of it and then it the different part under there where it says investment rounds well to be honest where we work we tend not to look at that too deeply because we’re looking at business’s investment ready and the s of investors we have got on the platform as I said very earlier looking for Value uh so we we tend to still look at Value what you’re looking to do whether you’ve got everything else right and then I think when John gets this he sort of looks at it a bit deeper and says maybe you’re not right for us but you’ve done well and finds some of the uh investors who fit specifically in those categories bill I think we’ll jump on to the next slide please John in the interest of time okay so I’ve covered a little bit of that as well so again just make sure so Bill you you just spend a little bit more time on this one and the detail well I think it’s important to show the investor what the money is going to be used to achieve lots of people will say this is how I’m going to spend it but I think the investor wants to know if you span that money what’s going to happen so that’s why I say show how it um will lead to growth show what the outcomes are of the investment as n has said before have a clear understanding of what you’re planning to do with the money be able to tell the investor why you need that amount of money because this is what the story up to this point has been been preparing the investor for I’ve got this great idea I’ve got this great business I’m able to deliver it I could do much more if I had this investment and this is what I’m planning to do with it so C State clearly what the spend is for you know at a top level and then you can have a building behind that and the you know the investor will want to drill into that and you need to be able to defend each spend item do you need it and will it create growth and there’ll be some negotiation at that point uh I think as well to come into and sometimes investor may say well if I give you more money what could you do with it they may get an investor like that so next slide please John oh sorry n did you want say that’s all right no no no that’s fine so we we’ve still done quite good job now and we’ve reached towards the end probably a little earlier but that allows us to have more questions and also maybe John when we finish you just want to talk a little bit about what the platform has been telling us about what we’ve been doing because now we’ve got a bit of a history so just on terms of this summary as we said this and the way myself and Bill look at this is really a deck that will get the phone call for you so when you’re put it on our platform uh people look at this in comparison to three or four other decks they need to then pick out the ones they want to talk about and they give you a call that’s one of the big pluses on how we work there’s no cost to that to yourselves and basically it’s one of many places you can look for investment so having yourself in a position where you’re ready for investment this platform opens the door for you to say put something on leave it there see how it comes back we spend the time with you before we let you on there to just make sure that that we can see the story ourselves and then you know John does some due diligence to make sure everything’s correct so for very limited resources on your part apart from time I I think you get a benefit of a lot of work you’ve already done and you keep on pitching and sometimes we get the feedback you know our pitch is better sometimes people get a little frustrated because we’re changing things they’ve done but that’s how it works there’s no real science to it there’s a little bit of Science in terms of structure and a lot to pattern but at the end of it it’s all about the product so just you know get your ideas get yourself understanding the market and then the pitch and the delivery of that can be worked on John do you just want to add a little bit and then we can go to questions certainly there are some great opportunities by using our services but our services aren’t for everyone and we appreciate that and you’re under no obligation either but since we were formed uh just shy of three years ago where up until the end of March we had helped businesses raise over 32 million pound and that’s not an insignificant sum in the last month alone five of the businesses that we’ve worked with that have then gone on to do greater things have raised another 1.6 million and the numbers just keep racking up so clearly we’re doing something different we’re doing something innovative ourselves and like all Innovation it’s an it’s an experiment in some respects and the proof is in the concept and the proof is in the marketability of that and that’s what we’re good at that’s what we’re good at designing and helping we don’t have templates we don’t ask you to fill in a form exactly the same as everyone else we want you to tell your story the way you tell your story and that’s that makes us different as well so we are if you like a new way of looking at pitching but we work with other organizations as well and that’s equally important now we do have some questions so let’s let’s let’s have a look at the questions when explaining a solution should we focus on how it solves the specific problem at hand or should we mention the technology used since it allows for broader applications and potential Solutions okay so that that’s a a great question and one myself and Bill always have a hard time getting the balance with the guys who developed it and the answer is a bit of both because at the stage this is at and the fact that you not there to explain further if there is a question around that subject it’s really about getting the balance to say look there is an existing market and this is where the solution fits but the technology is Broad enough for us to look at other areas H and for our decks we encourage that but we sort of have to make sure that the balance is right so I’m sorry it’s not an easy answer to your question but it’s certainly something that is a great question to ask because you know we compete with a lot of people who say I can do a two-minute pitch or a five- minute pitch and then this question is even worse to answer but we like to think you know 16 slides allows you to do the best balance for you to get that opportunity without being there yeah no I I I agree it is a great question and um sometimes what we see is that people will present the problem and a a solution to it and then they’ll have another slide that says and this is how it works so that gives you an idea of what’s going on and what technology is being used and it gives it in enough detail for the investor to be convinced that there isn’t Magic going on in your solution that it is real and it can be made to work and um if you’re careful about it then you can set the seeds in the Investor’s mind that hey this could be used for different applications in the future so sometime down the line beyond what we’re asking for investment for now we may Branch out into other application areas is using the same technology solution so it very much depends on the story that you’re telling and how you want to tell it um don’t get too buged down in the detail of the technology and the solution itself because remember you’re presenting the business story uh you need to convince you know provide enough detailed for to the investor that you know how it works and it can be made to work and that they can believe that and have you know have an understanding that it will will happen I think you’ve answered the next question as well which is is how much would you detail future plans in other words the business vision and therefore future revenue streams and changing the business model yeah I you know we as as you know repeating what I said before but from a a bigger business point of view and particularly the change in the market of investment where people are looking for longer term pictures of how business are going to make profit rather than just grow I think it’s important that if you have the potential of seeing the development of the market through you introducing a new Range doing new things that should be there but not to the extent of getting the investor to believe that you’re not focused so again it goes back to that challenge of balancing but telling me that you know I’ve got a a nice product that can turn into three different things given the right sort of marketing and stuff I’m looking for that because I want to know how the next phase of growth’s going to come come but I don’t want to then hear that these are all the things I’m doing at the same time and not delivering anything so again it Go and it’s very hard at the early stage at the bigger stage there’s lots of different markets and checks that stops doing that so make sure you you do encourage the opportunity to tell people what you can do in the future but balance it with telling them what you’re going to do and deliver in the time skills that you promise yeah no it’s it’s it’s very much about that retaining your focus on what it is that you’ve asked for the money to do uh this around of investment and make sure you can deliver that yes it’s good to have a vision of something in the future um put that down as well but not to the detriment of the focus that you need to bring to what you’re currently doing and you know as n says things change so what you think you might be doing today in the future could be something completely different you’re you’re on mute John and that leads very nicely into the follow-up question which is on a case- by case basis of course when would an inspect uh sorry when would an investor not inspector expect to see a rate of return on investment and Define a rate of return on investment I think is also the subliminal question there I mean that’s very hard and interesting question in real businesses there is I’ve just been following a business who I used to work with a company called Venture and he’s just explained how five over five years his acquisition strategy has been over getting an 18% return now I don’t know how he measures it what he adds to it but he’s done it well enough for the market to blow his shares all over the place so there’s a whole load of people who do want to be able able to understand that side of that but whether you can do it realistically at an early stage or actually do the basics right like knowing your Market knowing how many customers you are who are the ones you’re going to attract what the cost of that attraction is because you’re in a big Market would probably be the sort of things they’re looking for Bill John anything to add I think yeah it’s very much how long is a piece of string question because different investors will do things differently and you know there’s a risk reward type profile that comes in that may be that there’s you know a high risk in what you’re doing but the potential reward is high and that comes later whereas other investors will prefer to see you know returns early on in the business Journey because they’re not so much interested in the technology and what’s in it that they want to see a return for their opportunity and they’ve got other opportunities that they could put put it towards put their investment towards so difficult question to answer very much comes down to the investors themselves and what they want to see I think there is also the possibility that you know as you say depending on the type of investor that you get there could be investors who want to see an exit in five years there could be I speak to investors who are have been waiting 12 years to get a return on their investment so it and what kind of return is it is it a dividend in share or is it a sale and a cash back in full plus four or five times their investment so there are so many different computations in answer to that question now I’ve got a few more questions coming in and I’m very conscious of the time so we’ll try and get through these quite quickly if we can um if a Founder is new to the sector but has a previous startup success in another sector do investors see this as a high risk I would mention all the opportunities that we deal with are extremely high risk and under the financial conduct Authority rules I will emphasize that you could lose all your money by investing in anything that we put on our platform so over to you too okay so that’s one of the reasons why we’re so keen on making sure that the deck tells the story for an investor that he can make his mind up based on the assumption that he’s signing up to something that he can lose so the information we give him is correct to the point that we put it onto the platform but going back to your other question in terms of does is that a higher risk not particularly because they’re looking for history with people who have the knowledge of taking something from the start to a finish a and even if youve not finished it what they don’t want to do or find out later is that actually you have done it four times and done something and not told them so I think being upfront being clear about what you achieved there why you think you can do something in a different sector is part of the story of why people should invest in individuals so I won’t hide it I wouldn’t worry about it I’d certainly make it positive uh in what youve achieved yeah that’s fine I have nothing really to add I’m conscious of time as well but John you’re off again I’m always off okay Some people prefer me muted I must admit so um whilst also uh I mean say one of the questions that we got here was more of a comment have you seen good or bad examples of the balance of a pitch deck which has either got too much information or too little I think when it comes down to a pitch deck it’s very much in the words and the voice of the founder that’s what we prefer to see and yes there are many occasions where the pitch decks are far too big 28 slides it’s almost like a business plan it’s far too much information to be absorbed in one go it needs breaking down into constituent parts so if you’ve got an awful lot to say and trust me I’m one of those people then you need to compartmentalize it and keep the pitch deck to a reasonable size with appendices which can be accessed separately and our platform allows you to do that um final question of the day how involved in the businesses are Angels or does this vary for each investor would you like to comment on that I I think it varies by each investor and even I would go far as to say sort of work we are doing it isn’t really attracting the traditional Angel they’re more investors some are passive someone to help with their experience but not really to the level of being a guy guidance all through it uh because I think that’s a different type of investor and they look for different things from the business at the very early stage so generally I would say certainly the ones we meet and the ones who go onto the platform probably don’t have that engagement with angels early stage startup incubators actually help in in that area so it’s a question about going back to where you are in your buildup and what you need and then finding the right place to pitch John I think that’s perfectly correct I think it’s very much a case that Angels differ they’re individuals they’re human beings and each has their own agenda and it has to fit in with your agenda as well and it’s like it’s almost like a dating game in many ways you have to have the right angels on board in order to achieve your objectives and theirs yeah I was just going to comment on Rob’s previous question when he said he find it difficult to construct the deck with all the information he wanted to convey you need to think Rob of how much information do you need to convey to answer the Investor’s questions that he’s going to ask once you get the engagement then you can convey an awful lot of information but you must just get enough information there to get the investor interested and then speak to you afterwards and that might help you reducing the size of your deck to think what the person you’re speaking to and what they want rather than what you want so in wrapping up I’d like to uh thank my presenters today nit in Patel and William Miller and for all the effort and work that they put into presenting this now we there is a follow-up part two to this webinar and you have on the screen in front of you it’s on Tuesday the 2nd of May which is only next week after the bank holiday and I urge you to join us again for that one because we will go be going into much more detail the second time round so I’m now going to wrap up on behalf of uh University of Essex thank you very much for joining us today and I look forward to seeing you again uh with your questions already prepared for next Tuesday thank you very much indeed I now