quiz 7 mgmt 160

The article discusses an 11-slide investor pitch. Name FOUR of the slides or describe the contents of four of the slides.

Title Slide: = include company name, and names, titles, and contact information for the entrepreneur, the team, and key partners. - establishing credibility - let listeners know there will be time for questions at end 1) Slide 1: Executive Summary = summary should describe customers, the pressing problem the venture intends to solve, the proposed solution and why it is unique and valuable to customers able and willing to pay, why this team is ideal for launching the business, and the current state of the business. - let them know what role they will play and what value they will receive 2) Slide 2: Market Positioning/Problem Description = Describe the market and the problem ("pain") that customers experience today and provide information on the size and growth rate of the total addressable market. - show specific market segments - show expectations for market growth 3) Slide 3: Product Positioning = Explain the product or service and how it will address the market opportunity or alleviate the "pain" described in Slide 2 4) Slide 4: Business Network (Ecosystem) Positioning = Show a diagram of the business network or ecosystem that identifies key customers, suppliers, partners, and other players that must participate to make the venture successful. - Use this slide to discuss the role the venture will play and how the new business changes (and hopefully improves) relationships and economics among the players. 5) Slide 5: Competition or Substitutes - Discuss key competitors and substitutes and how you will differentiate your offering from available (or potential) alternatives. 6) Slide 6: Customer Benefits = Describe the benefits that will be delivered, who will receive them, and when. 7) Slide 7: Operations = Identify the capabilities and resources needed to design and launch the initial product and service offerings and those needed to grow the business over the next five years. 8) Slide 8: Financials = Provide high-level cash flow projections and identify the key assumptions behind them. - Show best-case and worst-case scenarios around important assumptions and discuss the influence of changes in key assumptions on revenue and cost projections. 9) Slide 9: Risks = Discuss key areas of risk and how they will be managed. Demonstrate an understanding of all categories of risk, including: (1) financial and investment risk (2) strategic risk (3) operating risk 10) Slide 10: Implementation, Status and Traction, and Financing = Discuss the current status of the business and provide estimates for when key milestones will be achieved and key risks/uncertainties that will be addressed. -Discuss experiments that are planned to test assumptions and reduce uncertainty and metrics that can be used to measure insights gained from those experiments 11) Slide 11: Closing Slide (the "Ask") = summarize the business case that has been made, the resources needed from the audience, and next steps. Then open the floor to questions.

according to the article, what are the four common types of business plans? Briefly define each in a sentence or two and discuss if the plan type is for external stakeholders or internal stakeholders.

1) *mini-business plans*: contain a summary of essential components of a new venture's strategy, its go-to-market and operating plans and how these plans translate into financial forecasts, typically used as supplements to one or more well-crafted pitches when searching for financing or to gain the support of customers, partners, advisers and other key stakeholders *external stakeholders* 2) *traditional business plans*=contain a more detailed discussion of the strategy and the go-to-market and operating plans and provide significant detail on how these plans translate into financial forecasts, including multiple scenario based stress tests to clarify key areas of uncertainty and risk, *external stakeholders* 3) *go to market plans*=describe the unmet needs of early adopter customers, the product, service or solution that will be developed to address these needs and the value proposition and benefits that will be delivered, - defines the specific features that will distinguish the entry product or service from competitive products - forms the foundation for identifying the revenue models and the market potential of the new business at the time of entry and as it scales to exploit growth options. - for *internal stakeholders* designed to enforce discipline on founders, forcing them to articulate everything required to launch 4) *Operating plans* = define the key activities and milestones that must be accomplished as founders develop, produce, and deliver the venture's first offering - also used to identify the resources (e.g., talent, technology, infrastructure, equipment, facilities) that will be needed to launch the new venture and the resources needed to scale the operation - are also used to identify assumptions regarding operating costs for the financial plan. - for *internal* stakeholders designed to enforce discipline on founders, forcing them to articulate everything required to launch

the article discusses that the process of formulating a business plan serves several important functions for an early-stage venture. Name three of the five mentioned in the article.

1) An opportunity to test ideas and determine whether viable business opportunities exist. 2) The foundation for debating and analyzing key assumptions, developing financial forecasts, and designing early experiments. 3) A baseline that clarifies aspirational milestones as the entrepreneur experiments to build a minimal viable product or service offering that will engage the market. 4) A clear statement of the metrics that will be used to test assumptions and measure performance as the team works to achieve key milestones. 5) An approach to communicating with others about the business while raising money; assembling a team; and attracting suppliers, customers, and partners.

the article discusses that a good pitch should answer three "why" questions. what three questions to (e.g. "Why...?) are discussed? Briefly describe each.

1) Why this? = Why is this opportunity unique and compelling for this specific audience and for the stakeholders whose support will be needed to make the business a reality? 2) Why now? = Why is this a good time to launch this venture? For example, is the window of opportunity opening and will it stay open long enough to build a sustainable business and deliver expected returns? 3) Why this team? = Why are the founder and team best positioned to exploit this opportunity? Do they have the passion, commitment, connections, and mind-set to make the decisions and hard choices needed to turn their vision into reality?

3 benefits of writing a formal business plan:

1) some investors still require a written business plan that they can evaluate prior to selecting entrepreneurs to pitch in person 2) the process of writing a business plan enables entrepreneurs and founding teams to debate critical assumptions they are making and to identify areas of uncertainty. 3) these same assumptions, along with projected milestones, are used to identify resources needed and to develop cash flow forecasts, which in turn determine how much financing must be raised, when it will be needed, and the type of investors needed at different stages of the new venture's life cycle.

the article discusses the "opportunity funnel." Describe what it is in words and why the authors are discussing it in the article.

=illustrates how the founding team's evaluation of the context is refined to develop a unique business opportunity that fits with the experience, connections, capabilities and passions of the founding team why are the authors discussing it: showing how ideas are turned into plans and pitches

according to the article, what are a "business plan" and a "business pitch" and an "elevator pitch"?

Business plan= a document that articulates the proposed venture's business model and provides significant additional detail. (4 types=traditional plan, mini plan, go to market plan, operating plan) business pitch= a presentation that can be used to communicate the business model to investors, customers, partners, advisers, potential employees and other stakeholders elevator pitch= a one-paragraph description of a new business or opportunity

according to the article, has the prevalence of full-length business plans changed? if so, why and what has replaced them?

Yes, these detailed plans are much less common now because mini-plans and pitches have enabled rapid information flow between entrepreneurs and the stakeholders they seek to engage

business plan pitch

a compelling presentation that can be used to pitch a new venture to investors (inside or outside the business) and to customers, partners, advisers or key employees

elevator pitch

a one-paragraph description of a new business or opportunity. - to describe the business or opportunity in a way that captures the interest of someone who is unfamiliar with your idea in the short time it takes to ride an elevator from the first to the tenth floor of a building.

what is the typical length of time for financial forecasts (i.e. proforma financial statements) included in the business plan? Are there are reasons why these may be shorted or longer? Explain.

typical length of time for financial forecasts is projected over 3 to 5 years - this time frame may be longer for a venture that requires long-term investments prior to turning cash flow positive ex: many biotech and clean tech ventures require significant investments over 10 years or more prior to turning cash flow positive