Monthly Archives: May 2013

5 Secrets to Sales

5 Secrets to Sales from The Startup Garage

5 Secrets to Sales

As a new startup, you will find yourself doing some form of sales around the clock.  Selling investors or bank officers, selling potential strategic partners or key employees, selling customers and clients.  Sales is king in the new economy.  You success will be determined by your ability to generate revenue and sell, not just your products and services, but also yourself.

Here are five signs you’re well positioned to succeed at the art of selling:

1. Remember, you are in the people business.

Don’t make the mistake of getting so caught up in what you are selling that you forget to make meaningful connections.

2. Focus on the results, not the effort.

Don’t confuse results with efforts.  Your success in selling is all about getting results.  Therefore, you should evaluate your results and not your efforts.  You don’t try to get an appointment, you either get it or you don’t.

3. Do the uncomfortable thing.

Don’t shy from the tough customers or the tough sales.  You can’t bring the big deals home without getting into the deep waters where the big fish swim.

4. Wow the customer.

Sales is all about emotion.  Constantly look for ways to inspire a customer’s emotional involvement and create the urgency to take ownership.

5.  Ask for the sale

This may seem very simple, but most salespeople never ask for the sale.  If you don’t ask, you will only sell to those who are going to buy regardless.

More details about these 5 tricks can be found here.
 

Whether you have a question about Sales Secrets, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Big Data Report – $4.9 Billion Invested Across 523 Deals Since 2008

$4.9 Billion Invested Across 523 Deals Since 2008 from The Startup Garage

Big Data Report – $4.9 Billion Invested Across 523 Deals Since 2008

Big Data investment has been gaining momentum seeing nearly $5 billion of funding over the last five years. 2012 was the biggest year of deals and saw YoY growth of 19.5% over 2011. The graph below highlights the five-year financing trend to Big Data companies.

In addition to the acceleration in financing activity, big data exits have also increased with 2012 seeing 20 exits including several IPOs. IBM and Oracle lead the pack with the most acquisitions of Big Data companies.

Below is the five-year financing trend to Big Data.

The Startup Garage. TSG Enterprise.  $4.9 Billion Invested Across 523 Deals Since 2008

The Big Data exit activity level has also seen a sizable uptick with 2012 seeing many exits via M&A and 3 IPOs including ed up as well.

The Startup Garage. TSG Enterprise.  $4.9 Billion Invested Across 523 Deals Since 2008

 More information including a link to the full Big Data Report can be found here.

 

Whether you have a question about The Big Data Report, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Investor Activity – 2012 Summary

Investor Activity – 2012 Summary from The Startup Garage

Investor Activity – 2012 Summary

Private equity fundraising improved in 2012, with the amount of aggregate capital raised by closed funds increasing from $312bn in 2011 to $327bn in 2012, an encouraging sign for the industry. However, the number of funds closed fell from 911 funds in 2011 to 761, indicating limited partnerships (LPs) are now often placing more capital with fewer managers.

According to Preqin (alternative asset industry intelligence firm), the majority (60%) of LPs made new private equity commitments in 2012. However, this is a drop from the 66% of LPs that committed capital to funds in 2011 and suggests many investors still remain cautious in the current financial climate.

Investment Activity by Region

The level of investment activity in 2012 varied among investors in different locations. Certain investors, primarily banks and insurance companies, located in North America and Europe have become increasingly restricted in their investment activities due to stricter regulations, requiring them to re-evaluate their investments in the asset class.

Asia and Rest of World-based investors were the most active, with 67% of the LPs in this region making new commitments. In contrast to tighter regulation in developed markets, LPs based in Asia and Rest of World have seen restrictions on their investments decrease in recent years. Furthermore, investors based in Asia and Rest of World  have become increasingly experienced in investing in private equity and now represent a significant source of capital to fund managers.

Investors Above, At or Below Their Target Allocations

The proportion of LPs below their target allocations to private equity has gradually decreased since 2009. As shown in Fig. 3, almost half (45%) of LPs were below their target allocations to  private equity in December 2009, following the onset of the global fi nancial crisis. This decreased to 28% in December 2012. The vast majority (57%) of LPs are at their target allocations to the asset class and 15% of LPs are over-allocated to private equity.

 

Whether you have a question about Investor Activity in 2012, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

3 Main Components of Financial Projections

3 Main Components of Financial Projections from The Startup Garage

3 Main Components of Financial Projections

Successful entrepreneurs not only have visions in their minds, they also translate their abstract visions into concrete financial projections. Financial projections enable entrepreneurs to set targets for their goals, control costs and predict problems. Balance sheet, profit-loss statement, and cash flow statement are the 3 main parts of financial projections and should be included in any business plan:

Balance Sheet

It is a summary of the financial balance of a company. It looks at the company’s assets, liabilities, and equity. Assets are economic resources. They include tangible and intangible things that can be owned and controlled to produce value. Liability is defined as an obligation of an entity. To settle this obligation, an entity can transfer assets or provide services. Equity is the residual claim of investors in assets after all liabilities are paid. Assets, liabilities, and equity are listed on the balance sheet, and the difference between assets and liabilities is the company’s net worth. The balance sheet is a snapshot of a company’s financial condition, and it gives decision makers a solid understanding of the company’s resources and debts.

Profit-Loss Statement

It indicates how revenue, after charging against costs and tax, is transformed into profit. This projection vividly interprets the business’ entire operating process into financial figures. These projected figures might not largely match the company’s actual performance. But they, to a certain extent, give entrepreneurs a general idea of how profitable their businesses could be. The profit-loss statement helps entrepreneurs set goals for both short term and long term periods, and it also alerts entrepreneurs to potential costs that could incur.

Cash Flow Statement

It essentially indicates the flow of cash in and cash out of the company, and it has been a very useful tool to determine the business’ short term viability. Cash is the life blood of a business.  Payroll and immediate expenses have to be paid in cash. Whatever scale a business entity is, it can go bankrupt if it runs out of cash. Therefore, the cash flow statement is crucial for a startup owner to judge the company’s financial health. It is also important for investors and lenders to judge the company’s potential return and its ability to repay. It as well tells how much startup capital the company will need.

Financial projections include balance sheet, profit-loss statement, and cash flow statement. They inform their readers the company’s financial condition. This information is crucial important and is in a professional business plan. Therefore, by having a business plan at hand, one can always examine his/her business’s financial health, and present investors or partners with valuable data.

 

Whether you have a question about Components of Financial Projections, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

The Habits of Self-Made Billionaires (Infographic)

The Habits of Self-Made Billionaires from The Startup Garage

The Habits of Self-Made Billionaires (Infographic)

If becoming one of the world’s richest people were easy, we’d all be doing it. Unfortunately, that is not the case, becoming a self-made billionaire involves taking an enormous amount of risk. Of the 100 richest people according to data from the Bloomberg Billionaires Index, 36 were born to humble households and 18 have no college degree whatsoever.  By taking risks, these individuals were able to build an empire.

As the infographic from Enrepreneur.com shows, these individuals invested during hard times, bought companies that were all but ruined, adopted early trends, some got lucky and for the majority, their successful venture was not their first business.

Poor to Rich Billionaire Infographic from the Startup Garage

 

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VC Update: Q1 2013 Activity Report – $6.9B Invested Across 841 Deals

Activity Report - $6.9B Invested Across 841 Deals from The Startup Garage

VC Update: Q1 2013 Activity Report – $6.9B Invested Across 841 Deals

Q3 2012 saw 835 deals take place, the highest number since the dot com boom. Q4 held relatively flat (834 deals) and Q1’13 saw a slight uptick leading to a new multi-year high on deals. Funding also climbed on a sequential basis. Relative to Q1’12, funding was up 17%. Overall, Q1 2013 saw $6.9 billion invested across 841 deals.

Seed VC hit a peak in activity in Q3’12 still registered a strong quarter in Q1’13, despite the much-discussed Series A crunch pullback.  Seed VC activity was pretty flat on a sequential basis (194 seed VC deals in Q1’13 vs 190 in Q4’12) but YoY, Seed VC deals are up 31% (148 in Q1’12). While the consensus is that there will be Seed VC casualties because there is not enough Series A money, the prevailing wisdom among investors also appears to be that this crunch will only impact those other “less smart” investors who made poor bets.

More information on Q1’13 VC funding can be found here.

 

Whether you have a question about Q1 2013 Activity Report, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

M&A Update: Medical Device Valuation Multiples Decline in 2013

Medical Device Valuation Multiples Decline in 2013 from The Startup Garage

M&A Update: Medical Device Valuation Multiples Decline in 2013

Since 2011, 252 private medical device companies have been acquired. M&A deals levels. In the trailing four quarters (Q2’12 to Q1’13), there have been 132 private medical device companies acquired versus 97 in the prior four quarters (Q2’11 to Q1’12) highlighting 36% growth YoY.  Almost 9% of the private medial device M&A exits have seen valuations of more than $1 billion.

Although the valuation multiple ranges were quite wide in 2011 and 2012, we are seeing a tightening and contracting of these multiples in 2013 as demonstrated in the graph below that highlights the distribution of price/sales valuation multiples for these private company acquisitions.

The Startup Garage. TSG Enterprise. The Startup Garage. TSG Enterprise. The medical device industry is seeing a tightening and contracting of valuation multiples in 2013.

More information can be found here.

 

Whether you have a question about Medical Device Valuation Multiples, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Pitch Deck for Angels and VCs

Pitch Deck for Angels and VCs from The Startup Garage

Pitch Deck for Angels and VCs

The single most important thing that the VC is going to be investing in is YOU!  Your pitch deck presentation is simply a visual tool to help you deliver your message. It is paramount that the audience is solely drawn to you, and that your deck merely contains short bullet points, headlines and images that evoke an emotional connection or act as a summary of your presentation. You will want to develop a separate pitch deck that you will provide as a handout that includes much more information about the pitch. However, during the presentation itself, the deck needs to be bare bones and the information needs to come from you.

Here are some tips to consider as you work through your presentation deck:

  1. The first slide should contain the company logo.  At this point, you’ll provide a brief (1-2 sentence) overview of what the company does , how it does it and why it is important.
  2. Next, introduce the management team and key players.  Explain how their experience and skill-sets align with the company and where it is going.
  3. The very next slide needs to clearly introduce who the market is and what the size of the market is.  First and foremost, you target market needs to be focused.  Second, it is important that you use outside validators to convince the audience that what you are telling them is true.  Outside validators can include successful beta runs, size of companies in the same or a similar space, credible research firms, etc.
  4. Once your audience has an overview of the company and understand who the market is, present the product or service.  A simple image on the slide will do.  It is up to you to explain the product in simple and succinct terminology that does not confuse or patronize the investor.
  5. The next slide is about the business model.  Explain how the company makes money and why this model was chosen if necessary.
  6. Follow the business model slide with an overview of the competition.  Investors want to see who the competitors are, their strengths and weaknesses, how you are positioned among them, and most importantly, how are you special.  Be sure to include outside validators here as well, such as strategic relationships.
  7. Discuss any barriers to entry that exist in the industry and how your company has or will overcome them.  You may also want to mention any barriers that your company has or will put in place to deter any new entrants or copy-cats.
  8. Provide a simple P&L on the next slide and discuss the key financial takeaways in your projections.  Be sure that when you present the upside potential that you are not too low in your assessment but that what you present is believable as well.
  9. Dedicate the following slide(s) to the capital amount that you are requesting, the use of proceeds and lastly, your valuation.
  10. Conclude with your logo on the screen and wrap up the key points made above as quickly as possible.

You want your presentation to be like a rocket, building speed and momentum throughout its trajectory until it reaches its destination and ends with a climactic explosion.  So to your presentation needs to continually build momentum, getting stronger and stronger throughout the presentation and ending on an extremely high note.

David Rose, entrepreneur turned investor, outlines all of this and more in his TED Talk.

 

Whether you have a question about Pitch Deck for Angels and VCs, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!