Friday, April 7, 2017

Entrepreneur training 7: Business communications

Business communications

This week, we discussed presentations, emails and meetings in business. I think it is really useful, a lot of the skills are not only in the business settings. 
Presentations
  1. Set the context. This is slide zero (what is the question, why I am here, the theme, the context setting of the presentation)
  2. Set the expectation. This should be saying the desired outcome. 
Running effective meeting
  • Starts why we are here and ask how to make a great meeting 
  • Agree on objective & the method
  • Leader's job
    • Purpose of the meeting
    • Set the high bar of the meeting
    • Make sure people feel heard
    • Ask & invite opinions
  • Who is making a decision & how
  • Be careful to people spend too much time distract the meeting to other directions.
What’s CEO’s role? the leader’s job is to drive consensus
When you look for jobs in the future, and the most important thing is whether their culture aligns with you. The second factor is how many hours you need commute.
Pitching to investors
  • Objectives are more clear
  • Meeting flow is expected (1 hour)
    • Ice breaker
    • Pitch deck (no longer than 20 min, 1-slide, 3-slide, 5-slide, 10-slide versions)
    • Q&A (20-30 min)
    • Wrap up & next steps (if any)
  • How do you know if the meeting went well
Here is a nice video by David Rose - 10 things to know before you pitch a VC
Common Mistakes
  • Over-explaining the obvious
    • And not explain what really needs to be explained
  • Rushing through slide zero (There are only two slides really important, slide 0, and the 2nd one is the Financial projection)
  • Skipping proper transitions
  • Not having a team slide with photos & relevance
Remember the purpose of the first date is to get the 2nd date. The first VC meeting is to intrigue them to the 2nd meeting. 
The procedure from meeting with VC to get the money is usually 5 - 8 months
Process: from wink to first meeting is about 2 - 6 weeks, the first meeting to the talk with expert, is about 2 - 8 weeks. This is also want to see if you can doing good. 2 - 4 weeks for the term sheet to the legal due diligence.
  • wink - (1 paragraph email)
  • request a meeting (send 2 page executive summary, don’t send the slides)
  • First meeting try to wow them, and meeting went well, they will stop, and ask, let me see if someone is available, they will never see they say no
  • 2nd meeting with more people (they try to get the consensus between different )
  • Now you should talk with our expert number (this may follow due diligence)
  • If you doing really good, then they will ask you partner meeting (the meeting location is very important, whether it is at a coffee shop, or first floor of the company, or the top floor conference room, etc. 
  • Then you will get a term sheet, 4-8 pages, with what they want to invest, no binding offer, and you have 72 hours to signing it. (this is a brief joy moment you can have before click emails)
  • Now starts the Legal due diligence, this is more lawyer to lawyer, you pay for both sides.
  • Closing
  • about 48 hours or 3 days, you get money from VCs
When you have multi-horses race, or rebound (when the VCs rejected by a similar startup), then the process will be compressed. 
Following up with investors
  • send additional info based on discussion
  • see if they pull or only you are pushing?
Usually for a VC, they got 1000 applications -> 100 closely investigate -> 20 invite to present -> 3 or 4 offers -> 1 - 2 investment per year
Emails
  • Using signatures
  • Salutation
  • Email title (subject line)
  • Suitable length
  • Sections & organization of email body
  • First line, why I am sending you this email
Pitching to Investors
Tell a story
  • saw a problem
    • Unique insights led to a thesis
    • market research validated thesis
    • assembled a team
    • know our customers & their problem & our competition
  • We know how to promote this, we have our assumptions & financial projections
  • We need XX money to get to YY stage
We talked a lot in the past about getting money from VC (Venture Capital), in order better understand them, we need to figure out the following 3 questions:
  • How do they get their money?
  • Who are they accountable to?
  • How do they make money?
Approaching investors
  • Send a short email if they are interested in this space [ideally through a referral]
  • Send executive summary to gauge interest and request a meeting
  • First F2F meeting to intrigue them ... Get a 2nd meeting!
Structure of Exec Summary
  1. What problem exists (unmet need) & who has it
  2. Current alternatives & shortcomings
  3. Your solution
  4. Your unfair advantage (magic sauce)
  5. Positioning vis-a-vis other competitors
  6. Market segment targeted & market size
  7. Business model
  8. G2M strategy
  9. Team
  10. Timeline of progress & milestones
  11. Financial projects

Acknowledgements:

All the materials are from the entrepreneurship class at UC Berkeley taught by Naeem Zafar.

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