Venture Advisor Session With Mach37

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10-31-2014 - Tandem NSI - 08 - DSC_2390-400x300TandemNSI’s Venture Advisors are an eclectic bunch of entrepreneurs, marketers and investors. When we were invited to Mach37 last week to provide advice to the companies currently going through their accelerator program, we were excited to support their efforts to facilitate the creation of next generation cyber-security companies.

The Mach37 model provides a twelve week accelerator program which companies apply to participate in. The companies we met last week were chosen from 60+ applications and are less than a month away from the culmination of the program: Demo Day. TandemNSI Venture Advisors offered the lucky six an opportunity to practice their investor/product presentations in a realistic setting that was intended to be less intimidating than the investor presentations they are all preparing for.

TandemNSI Venture Advisors provided advice on specific elements of each presentation but a few broad take-aways emerged. We were impressed with the credentials, enthusiasm and devotion of the six companies: iAspire, Virgil Security, FireDrillMe, Syncurity Networks, SecureDB, BiJoTi.

  • Balance Target Market Opportunity – investors want to know that the market opportunity for your product or service is broad, but they also want to know where you are going to begin. Developing your operations takes time and is always harder than you think. Investors expect you to take a bite at the apple that you can actually chew while you are developing your experience base. Don’t fall into the trap of trying to address multiple market segments out of the gate.
  • Illustrate the transaction – investors expect to get a clear picture of how the sales transaction works – and it needs to be drop-dead simple. Who buys the product? Why do they need it? What are your costs? How/when do you get paid?
  • 100 Day Plan – Companies should have a plan that outlines how you will be spending your time getting the company established. Investors won’t be interested in all the details – but they will want to know
    1. that you know what needs to be done
    2. that you know how long it will take
    3. the level of revenue expected as a result of this plan.

Create a simplified version of this plan for investors

  • Clarify Control/Responsibilities – Investors will want to know who is in charge. Often companies assemble a great team of people but it has to be clear that team members understand their roles and have been properly allocated. Similarly, businesses that rely on reseller relationships will need to be prepared to address why not owning the ultimate customer is the right choice. Make sure to clarify the roles those involved in the sales channel.
  • Exit Strategy – Investors will evaluate your business on whether it is aligned against your exist strategy. Eliminate any noise from the business plan
  • Fast Five Roundup – John Casey provided his list of the five early stage valuation drivers at the debrief session at the end of the day:
    1. Market: How big? How Proven?
    2. Intellectual Property: Differentiated? Proprietary? Protected?
    3. Product Ready: Prototype? Pilot? Better yet — paid pilot?
    4. Paying Customers: History? Evidence? Revenue model?
    5. Team: Great team assembled? Key roles filled?

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