End Game Marketing Strategies

End Game / Capitalization Strategy

Is your company a candidate for venture capital? The economic climate for business has changed dramatically in the way it responds to the needs for capital … especially early stage capital.

"There was certainly a wild exuberance two years ago for early stage companies but that time has come and gone.”

- Ronald Weissman, a VC with Apax Partners

If you can define your company within the following guidelines, DM Productions will consider your project. Does your company have:

· Unique products with proprietary technology

· Rapidly growing markets sufficiently large to create a business with over $50 to million in annual revenues

· Proven management team with relevant successes

· Patents or other Intellectual Property barriers to entry

· Realistic, achievable financial projections and high ROI

· Credible & balanced Business Plans including key execution milestones

· Sustainable competitive strategies; clearly articulated

· Capital needs of $500,000 to $2,000,000 to accomplish significant business milestones that will attract the next level of funding (when required)

· A desire for advice and coaching

Business Plan

You will need a business plan to secure venture capital. This begins with an Executive Summary which is provided to determine a level of interest by an accredited investor or a Venture Capitalist.

What A Business Plan will address for a venture investment:

► Market Potential
Demonstrating a very large addressable market of at least $1 billion and growing is key. The investor will assess the company’s potential to grow rapidly and into a large successful entity. Investors like to invest in huge horizontal markets where the company can dominate its space. A company should have the potential to grow to $200 - $400 million in revenue in five years to receive serious investor consideration.

► Management Team
Key qualities: proven track record of success and a passion to win. The investor will assess the quality, capabilities and completeness of the management team. Type "A" players are people who have previously started and built successful companies and are known as industry stars. Entrepreneurs who have been previously backed by venture capital and have made money for those investors are the best candidates for funding.

► Technology/Products
The investor will assess the quality and completeness of the company’s key products and core technology. Ventures who have developed intellectual property that can be protected by patents are more likely to receive funding. A strong value proposition fulfills an identifiable need and provides significant economic benefits to businesses or consumers.

► Competition
The investor will assess the company’s competitive strength and position in its selected market. The most fundable companies have a unique market position and space, limited competition and strong sustainable competitive advantage.

► Return on Investment
The investor will assess the company’s overall capital requirements and its ability to raise the necessary capital to fund its business plan and produce attractive returns to its investors. The investor is also looking at a 3 to 5 year window for the liquidation event to occur.

Executive Summary

In order to maximize your chances of being funded, you should prepare a three-page Executive Summary covers the following topics:

Company
Define business purpose or value proposition - how it solves a problem and cures excruciating pain
Provide summary of your company's milestones

Products and Services
Describe important features and benefits - how is it differentiated, feasible, and adopted
Describe existing products and status of new products
Discuss pricing and margins
Explain proprietary position
Articulate any relevant regulatory or environmental issues

Market and Marketing Strategy
Market size and analysis
Market, distribution, sales strategy and how will you execute the strategy
Describe your customers
Evaluate competition and prepare a competitive matrix
Discuss the issues or circumstances that "drive" or create the market-What compels people to buy

Management
Give brief backgrounds of key individuals - specify why they add value to the company, and their past success and achievements?
History or working together as a team
Identification of immediate and future personnel needs and initial organizational structure

Financial Summary
Provide annual revenues, and profits over a 3-5 year period. Justify your financial assumptions with sources. Include a financial history if applicable.
Define funding requirements - How much is needed at what stage of development until the investor exit event occurs.
Describe the history of any previous investments in your company by investors
Indicate an exit strategy

Ask Yourself the Hard Questions
After you've written your business plan or three-page Executive Summary, you should run through these set of questions and ask yourself if you've answered these key questions.

What is the problem your business is solving?
Why does this problem beg a solution?
How big is this problem? (Define the overall market and your market size and growth rate).
What is your solution? Is there current Intellectual Property on this solution?
Have you invested in an independent assessment of the technology and strength of any patents issued?
What future products (solutions) can you evolve for these same customers from the first products?
Why is your solution better than any other solution to this problem?
What are the other solutions?
How can you protect the company against existing or future competitive solutions? (Sustainable competitive advantage).
Have you prepared a competitive matrix?
How are you going to sell and market these solutions and to whom?
Who are the people running the company and why are they better qualified to run the company and solve this market problem than all others?
What is the company’s history and track record?
How much money do you need to fund this business plan and how will investors gain liquidity?
How much money will this business make on what kind of sales? (5 year financial plan)