Lecture#14

Saira Sanawar
 Agenda
• Partnering for success
• Types of Partnerships That Are Common in
Business Plans
• Presenting the business plan to investors
• What do investors look for?
 PARTNERING FOR SUCCESS
One thing that’s important for a start-up is to
become active in the industry it’s entering.
Activity leads to learning the ins and outs of an
industry, finding business partners, and
becoming recognized as an industry leader.
Three important Ts that lead to industry activity
are trade associations, trade shows, and trade
journals. Start-ups should consider utilizing these
Ts as a part of their early and ongoing activities
Three important Ts that lead to industry activity
are:
• Trade associations
• Trade shows
• Trade journals
 Trade associations

A trade association (or trade group) is an organization that’s

formed by firms in the same industry to collect and disseminate
trade information, offer legal and technical advice, furnish
industry-related training, and provide a platform for collective
lobbying(try to persuade). In addition to promoting industry-
related issues, trade associations typically provide their
members a variety of other services. For example, the American
Watchmakers-Clockmakers Institute, which is a trade association
of watchmakers and clockmakers, provides its members training,
a database of hard-to-find parts, technical support for watch and
clock repair, bulletins with up-to-date product information, and
an extensive library of industry-specific educational materials.
 Trade shows
A trade show (or a trade fair) is an exhibition organized so that
companies in an industry can showcase and demonstrate their
latest products and services. Some trade shows are open to the
public while others can only be attended by company
representatives and members of the press. n the Unites States,
over 2,500 trade shows are held every year. There are several
online directories, such as the Trade Show News Network (
www.tsnn.com), that help organizers, attendees, and marketers
identify the most appropriate trade shows to attend.
 Trade journals

Trade journals, or magazines, are usually published by trade

associations, and contain articles and advertising focused on a
specific industry. Very little general audience advertising appears
in trade journals. They may also include industry-specific job
notices and classified advertising. Some trade journals are
available to the general public, and others are very specifically
controlled—meaning that you must participate in the industry to
receive the journal. This practice ensures advertisers that their
ads will be viewed by people in their target audience. Many of
the articles in trade journals are written about companies in the
industry. It enhances the stature and visibility of a company to
have a favorable article written about it in a premier industry
trade journal.
• Types of Partnerships That Are Common in
Business Plans
Because new businesses are resource
constrained(Resource constraints refer to the limitations on staffing, equipment and
other resources ), they often make partnering an
essential part of their business plans.Partnering
can help a start-up in many ways. The following
are examples of the types of partnering
scenarios that are common in business plan.
Types of Partnerships That Are Common in
Business Plans
• Smaller Companies Partnering with Larger
Companies to Bring Their Products to Market
• Smaller Companies Partnering with Larger
Companies to Produce, Fulfill, and/or Ship Their
products
• Smaller Companies Outsourcing(externalization)
Human Resources Management Tasks
 Presenting the business plan to investors
You till typically get about 20 - 30 minutes for your presentation
Keep half the time for presentation and half for Q&A “Show the
dish. Don't detail the recipe.” – the objective of the first
presentation should not be to share details but to excite the
investor to meet you again for details Don't state the obvious –
focus on things that most people are not likely to know e.g.
when presenting about a solar energy business, data on how
renewable energy is important is not necessary
 Focus on the business around the concept or
product or service
- What are you going to do – concept
- How are you going to make money – business
case (A business case captures the reasoning for initiating a
project or task.)
- The size of the opportunity – potential
- How are you going to do it – implementation
plan
- How much money do you need – to attract the
next set of investors
 What should you include in your
presentation?
• Concept overview – and why it is relevant i.e. opportunity / need
• Team
• What is the size of the opportunity
• Business model
• Competitive landscape (Competitive landscape is a business analysis which
identifies direct or indirect competitors and at the same time, it permits the comprehension
of their mission, vision, strengths and weaknesses.)
• Operations plan overview
• Risk factors
• Funding needs and use of funds
• Exit potential
TWELVEPOWERPOINTSLIDES TOINCLUDE IN ANINVESTOR
PRESENTATION
book page#134
 What do investors look for?
Investors look for competent and committed
teams - Passion and deep interest in the domain
- Deep understanding of the dynamics of the
business around the concept – who will buy,
why will they buy, challenges, etc.
 What do investors look for? Continue…
• Investors look for plans with practical milestones - But large
aspirations (ambition of achieving something)
• Investors look for teams with focus in the initial phase - Even when
entrepreneurs have identified multiple opportunities with the
concept
• Investors look for a strong implementation plan - Implementation
strategy is the process of defining how to bring the strategic plan
to life. To execute the objectives outlined in the strategic plan, you
must define how you will implement each aspect, from funding
and personnel to organization and deliverables. Therefore, without
an implementation strategy, it can be difficult to identify how you
will achieve each of your stated goals and objectives.
 What do investors look for? Continue…

• Investors seek teams that have a clearly identified

immediate goals and tasks What do you need to
do to launch? What are you going to test?
• Investors seek a plan that clearly outline how
much funding is required, where it will be used
and what it can achieve You should seek from
angels only as much as you require to go till you
can attract VCs In rare cases will angel funding be
sufficient to take the startup to profitability
 What do investors look for?
• Finally, investors look for teams they can trust
Be honest about risks & challenges, be open
about limitations and weaknesses When you
tell them where you need help, will they be
able to provide inputs
 Home Task
• Reading : From Book page#154
The Five Forces Model + Same Quiz on next
class