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Utilizing the template from the 7th lecture and make a slide presentation for my company. homework__4.docx lecture__7_2020_1.pptx mgt_187_new_venture.docx Unformatted Attachment Preview Homework #4 Utilizing the template from the 7th lecture please prepare a slide presentation for your company. Please remember that your entire presentation should take no more than 10 minutes. You may not have all the necessary info for your company or the company that you have chosen. If this is the case, then please improvise. Due Date: May 25th at 5:00 PM MGT 187 Lecture #7 © L. Jean Dunn, Jr. 2020 COPYRIGHT • My lectures and course materials, including PowerPoint presentations, tests, outlines, and similar materials, are protected by U.S. copyright and by University policy. I am the exclusive owner of the copyright in those materials I create. You may take notes and make copies of course materials for your own use. You may also share those materials with another student who is enrolled in or auditing this course. • You may not reproduce, distribute of display (post/upload) lecture notes or recordings or course materials in any other way – whether or not a fee is charged – without my express written consent. You also may not allow others to do so. • If you do so, you may be subject to student conduct proceedings under the UC San Diego Student Code of Conduct. The way that seed funding is all about your idea and team, Series A is all about the numbers. Series A Inflection Points a) These goals and objectives need to be set out after the seed round b) Inflection points include: customer acceptance, product completion, revenue goals, etc. c) VC’s are focused on these metrics that de-risk the transaction d) By meeting the goals the company distinguishes itself e) Don’t want to be explaining why you didn’t make the goals f) Normally takes 18 to 24 months to hit goals Series A “If you weren’t embarrassed by the first version of your product you launched too late.” Reid Hoffman - LinkedIn Series A Don’t Hire or Engage an Intermediary – Don’t mass email a) b) c) d) e) f) g) h) i) VCs want to speak directly to the founders Decision to go forward is based on the founders Question why you need an intermediary Existing Angels, lawyers and accountants are acceptable VCs can tell which emails are mass mailings and usually ignore these Each VC should be approached individually No one wants to look at a shopped deal – VCs talk and know If one or more turn it down then everyone walks Control information – Don’t want to hurt chances Series A Timing • • Normally takes 3 to 6 months to complete the financing You should take at least a month preparing Amount Target lower dollar amount – No more than 10\% to 25\% a) VCs want you to manage the business prudently and use less money b) Lower dollar amount means more VCs that could have an interest c) Easy to increase offering, if you go down the question is “Why is it okay now when you want less where before you absolutely needed more?” Series A Fund Raising Objective – Fear of Missing Out a) b) c) d) Traction - Customer acceptance and growth Team Impression – Impression of the CEO Social Proof – What others think Product Normally the VC makes a decision within the first 10 minutes of the presentation Series A Presentation General - No type less than 24 – They need to read it Minimize words on slides – graphics better Avoid industry terms Title Page – Name of company and contact info Do not have a date Problem - This should be on one page Problem should be customer’s #1 concern Not #4 or #10 Series A Presentation Competition Ideal presentation is a graphic Feature table tends to be too detailed Why are you better? What drives the customer to you versus competition? Don’t want to compete on price? Series A Presentation Market Size – Trends Want to see a market of $1 billion dollars What is the total addressable market? Who is the target customer? What are their unique needs or requirements? Evolution of the market Why are we at an inflection point right now? Customer story – Why did they purchase? Ideally rich customers that will pay a premium Series A Presentation Distribution How do we approach and sell the customer? What sales channels do we utilize? How do we measure the cost of acquiring a customer? CAC = customer acquisition cost Business Model How do we generate revenues? Do we have multiple revenue sources? How do we price? How does this affect our market? LTV – PV of future revenues from each customer For LTV calculation LTV is net of COGS or is gross margin Series A Presentation Common metric is LTV / CAC – Measures the revenues generated by a customer versus the cost of acquiring that customer Traction / Milestones Show milestones and that you have hit them Where is the company going in terms of revenues? Where is the company with regards to product? Series A Presentation General Want to sell: Big Problem, Big market, Right Solution Want to be 10x better not 2x – 3x Wait until after Series A to form a Board If you have an Advisory Board they should receive no more than 1\% of the stock Advisory Board members should be investors Series A Presentation Funding Request Capitalization Table Funding request Amount owned by insiders Angels Stock options for employees Be prepared to discuss valuation Series A Common Questions What is the impetus for starting the company? What is the problem you are solving and why? Why are you uniquely suited to solve this problem? Why now? Any recent trends? How did the founders meet and decide to partner? Series A If VC says “no” this means no – don’t ask them to reconsider Don’t ask the VC to refer you to their competitors Don’t give up – Make sure that you raise sufficient Angel money to carry you through if you have to re-market in a year Be frugal Xu 1 Mandy Xu Professor Jean Dull MGT 187 5/11/2020 New Venture Elevator Pitch My company idea is to establish a firm that offers freshly squeezed juice to people in my State and eventually expand into other parts of the continent and hopefully throughout the globe. My idea stems from the issues of health concerns that arise from consuming drinks with preservatives to stay for lengthy periods without spoilage. Summary of the New Venture The consumption of soft drinks is still a controversial concern for public policy and public health. Throughout the years, several studies express the possible connection between the intake of soft drinks and the medical issues, the outcome of which, nevertheless, is still intensely contested. Consequently, growing importance is being placed on soft drinks health properties by both the consumers and the industry, for instance, in the growing position of functional drinks. Widespread legislation makes sure that the manufacturers of soft drinks conform to the existing national and international standards. Customers believe that the soft drinks they purchase are of the quality required and are safe. An increase in lifestyle diseases caused from drinking carbonated drinks means people aspire to consumer healthy drinks such as fresh juices. The company hopes to fill this void by address people’s demand for tasty, nutritious and fresh juices. Target Customer Soft drinks, especially the fresh juices, are consumed by all categories of people regardless of gender, age, and race due to their affordability and availability. Tasty Fresh Juice Company Limited will target the children, the youth, and the aged people within California. Other target markets include households, restaurants, hotels, and celebration events. To reach them, we are going to advertise our Xu 2 products on print and audio media, the Internet (Web and Social Media platforms), and also promotion through sales agents that will occur at different branches across the city. We intend to start with at least five operation places within the city before expanding to other areas. The Current Market According to imarcgroup.com, the fruit juice market is worth $32.5 billion as per 2019 statistics. The company estimates the market would reach a valuation of $41.6 billion by the year 2025 and a CAGR growth rate of 4.2\% between 2020 and 2025 (Imarc). Similarly, the Grand View Research estimates the global market for fruit juice would be worth $257.17 billion by the end of 2025 (Grand View Research). The sector complements the soft drink market. Businesses in the soft drinks and beverage distribution industry are concerned with the distribution of canned and bottled beverages for consumption, bottling and purifying water, and other drinks such as sports, energy, and juices. Beverages from industry leaders, including the Coca Cola Company, Pepsi Co Inc., and Nestle top the products’ list distributed by firms that distribute beverages. The American beverage sector is growing and generates numerous billion dollars every year due to the carbonated drinks. These are beverage distribution firms across the U.S. Over the last half-decade, reports indicate that the growth for revenues from the capital has gone down because of the global recession that has constrained demand across most of the sectors markets. The constantly deteriorating sales of carbonated soft drinks and beverages in mature markets, the increasing need of super-box retailers such as Costco and Wal-Mart, as well as, the economic recession are factors that result in the fall of revenue creation for beverage distribution firms. The sector is likely to grow in the next five years. It will benefit from more flexible economic trends in evolving markets with urbanization and increasing disposable incomes that increase the demand for the products. Competition The main competitors include the Coca Cola Company, Pepsi Co Inc., Harvest Juicery Company, and Nestle. These companies are well established and with high-profit margins as they are global, meaning that their products reach a broad customer base. Due to their power and leverage in the market, Xu 3 companies can influence so many ideas in the industry. Their sales and promotion strategies are on another level. For this reason, together with a committed staff and corporate social responsibilities to their primary stakeholders, they continue to grow and enter into other markets through the production of new products in the industry. Some of the greatest strengths shared among the top leaders. These include substantial brand equity and identity, customer loyalty, highest brand association, extended worldwide reach, acquisitions, dominant market share, most massive brand valuation, and incomparable distribution system. The firms also have the opportunity of increasing their presence in developing countries, introducing new products and diversifying its divisions, packaging drinking water and bringing advanced Information and Communication Technology (ICT) and supply chain systems. Status of the Venture My family and I have tried out the product (with different flavors) and sold them at local events, and the response has been good so far. We make the product for special occasions such as birthdays, weddings, graduations, bridal showers, baby showers, among many other events, and people who have consumed the product in different flavors have loved it and have referred us to other clients. Budget Money Need Unit Quantity and Description Amount in USD Buildings (Hire) 5 to be leased for 1 year 60,000 Equipment (Company Assets) Machines for the production process for all the branches 50,000 Cash To be used for the purchase of raw materials (fruits) 10,000 Staff salary At least 5 staff for each branch for one year 300,000 TOTAL Source of Funding: Personal Savings, borrowing from family and getting a business loan from local banks. 420,000 Xu 4 Works Cited Grand View Research. Fruit and Vegetable Juice Market Size Worth $257.17 Billion by 2025. Market Research Reports & Consulting | Grand View Research, Inc, 2018, www.grandviewresearch.com/press-release/global-fruit-vegetable-juice-market. Accessed 6 May 2020. Imarc. North America Fruit Juice Market Size, Share, Trends and Industry Research Report 2020-2025. Market Research Company, Market Research Reports and Consulting Services, www.imarcgroup.com/north-america-fruit-juice-market. Accessed 6 May 2020. ... Purchase answer to see full attachment