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This episode is a business coaching course that teaches the fundamentals of learning to raise capital.

Results-Focused Training, Tools, and Workshops from Expert Business Coaches.

Featured Coaching Excerpt - Notes & Transcript, Part 1
  • Lesson Nugget: When introducing your team, highlight past accomplishments; this may give investors confidence in your team to be successful again.
  • Lesson Nugget: Building a team is not only important for the credibility of your company, but can be useful in other aspects, such as providing wisdom, networking, and raising capital.
  • Pitch Deck Includes: Problem - Describe the customer, market, and problem you address, without getting into your product. Emphasize the pain level and the inability of competitors to satisfy the need.
  • Lesson Nugget: It is vital to support your facts and statistics with legitimate sources in order to build credibility for your company's product or service.
  • Lesson Nugget: When presenting your idea, keep it simple in order to quickly educate others about your product or service.

[MUSIC PLAYING] teamtreehouse.com for execution, start a business

-When you start a business and when you have a good team, what are all the reasons why you have a good team? Well, one, a good team can give you wisdom, they can give you connections, they can give you capital, they can give you credibility-- team is awesome, right? So you want to build that team. So just it's got to be solid there, OK. And then there you put their bios, so people understand who they are, because you might have a team member who has a lot of success, but no one knows who they are.

They don't know who they are, but their resume is impressive. Does that make sense? So make sure that you do that. So each company I work with, I try to help these people find a team. And it's really humbling for people, because they're like, I don't need a team. This is my idea. Well, really you do if you want to get funding. Cool.

So moving on to the next slide here, OK. Opportunity-- can you read what the opportunity's all about?

-That's like the problem, Opportunity is the problem.

-Yeah.

-Yeah. So describe the customer, market, and problem you want to address without getting into the product. Emphasize the pain level and the inability of competitors to satisfy the needs.

-You've got to add that third party supporting stats to the slide. You've got to have statistics that show there's a need for this. It can't be just your opinion. I'm being real. I take probably for a pitch deck like this, I'd probably spend 20 hours doing research on that to get all the data so that if I say, I mean look at this data here.

It says, you know, by 2020, India is set to become the youngest country with 64% of its population in the working age group. With the West, Japan, and even China aging, this demographic potential offers India and its growing economy an unprecedented edge.

Well, that's like a statement. If I came out and said, hey, India is going to be the world's youngest country. Well, says who? But now that I've supported it with the most successful, the largest, the most credible newspaper in India, all of a sudden, you know, wow, this guy's not out of his gourd. If I make another statement, and I say, well, let's say if I'm trying to show that India is a country that's growing with their sports, a country that's interested in sports.

It's something where, well, if I were to say that, again it means nothing. If I'm just going to say, India needs more pro sports, that's just my opinion. But if I can come in here and say, the Indian badminton league also attracted 21.7 million people in their first season. If I can say that, and then support it with a credible source like the Business Standard, all of a sudden, people go, wow, you're not out of your gourd. So anytime you say something, you have to prove it. Make sense?

So don't just say something. I get a lot of entrepreneurs who are, again, kind of loosey goosey. I see it all the time. They come into my office, and they'll make presentations, and they'll say, hey, you know, actually, there's new product I came up with, and the world needs a product that uses less water. In fact there's a ton of people who are saying that-- everyone knows the world needs more water, and so this is why this product's great.

Well, who says that? What do you-- where'd you get this idea? Where are the stats coming from? Especially if I'm an investor, because as an investor, I make money with-- my money makes money for me. So I have to invest in industries I don't know anything about. So you have to make it easy for me to get educated quickly about that industry.

-It's like talking to a third grader. I've heard you talk about that. Same thing, right?

-Exactly. Now let's look at your company for a second. I don't know anything about trivia games like at all. So if I was going to invest, and you're like, hey, you know, this is a product where the world needs trivia games, I would go, who? Who needs trivia games? And you're like, well, actually statistics show this percentage of the American population plays games on a daily basis. All of a sudden, I go, really? Now I'm listening. But don't just give me a stat. Tell me where it came from.

-Yeah, OK.

-Cool.

Learn more about how to start a business on Thrive15.com with Clay Clark

Featured Coaching Excerpt - Notes & Transcript, Part 2
  • Pitch Deck Includes: Solution - Introduce your product and its benefits and describe how it addresses the problem you just described. Include a demo such as a screencast, a link to working software, or pictures. God help you if you have nothing to show.
  • Notable Quotable: "When dealing with people, let us remember we are not dealing with creatures of logic. We are dealing with creatures of emotion, creatures bristling with prejudices and motivated by pride and vanity." - Dale Carnegie
  • Lesson Nugget: When creating your pitch deck, make your presentation visually engaging to appeal to potential investors.
  • Pitch Deck Includes: Technology - Describe the technology behind your solution. Focus on how the technology enables the differentiated aspects of your solution. If appropriate, mention patent status.
  • Lesson Nugget: Create a higher perceived value of your company by hiring professionals to design a high quality pitch deck.
  • Notable Quotable: "If you give someone a present, and you give it to them in a Tiffany box, it's likely that they'll believe that the gift has higher perceived value..." - Michael Levine (Author of Guerrilla P.R. 2.0)

[THEME MUSIC PLAYING]

-So how are we going to move on to the next one here? Number five. Number five-- the solution. Now again, make sure you have a graphic designer make this stuff. It has to look awesome, OK? The solution. Go ahead and read that one.

LARRY POOR: So introduce your product and its benefits and describe how it addresses the problem you just described. Include a demo such as a screencast linked to a working website, or software, or pictures. God help you if you have nothing to show.

CLAY CLARK: Oh, Billy. Now that is tough. Because I wanted to build Thrive. I had nothing to show people. So I had to show these really cool visuals and mockups, but I could never show an actual prototype. Do you have a prototype?

-Yes.

CLAY CLARK: OK. So you have something to show people. But I want to clarify here, on this page, again, you put your solution up here, right? And then with your solution, you're going to have to show, specifically, how you're going to solve the problem. It's gotta be-- why does this thing have to visuals on it? Well does it have to be visually OK to look at?

-Well, for one, people don't like to read. They don't like to stop and read. Visuals are quicker, for one thing. Colors can bring out certain emotions or feelings.

CLAY CLARK: Here's the deal-- every investor you're going to deal with is a human, right? Marshall will add the quote here, but Dale Carnegie has a quote where he mentions, he says-- I'm paraphrasing-- but he says let us remember that humans are creatures of greed. They have pride. They have envy. They have all these emotions.

They're not creatures of logic is basically his quote. It's very important, though, that you know that. So when you show a presentation to someone, don't just give them a vague something. You got to show some visuals there. Make sense?

But again, I just want to clarify on this as far as we need to make sure that we're super, super intensive. We can show a demo. We want to show visuals. We want to make this thing very appealing, OK? So I'm going to move on to the next slide, OK?

The next one. This right here is going to be technology. Now, in this case, this is labeled business model. Basically, if it's a tech company, you show the technology needed to do it. If it's not a tech company, you're showing the business model. So this part here, point number six, is either technology or the business model. So go ahead and read that one.

-Describe the technology behind the solution. Focus on how the technology enables the differentiated aspects of your solution. If appropriate, mention patent status.

-So an example-- if it wasn't a technology company, you could say describe the business model behind your solution. Focus on how the systems that enable you to differentiate the aspects of your solution. The point is, you need to show, specifically-- this is what makes it different. This is the value proposition. And again, any time we say something, you always want to have supporting statistics and visuals. You see there's a little visual here?

Visual, visual. You got these little icons going on here. You got supporting statistics here. It's very important that you have that stuff, to have visuals and supporting statistics. Now again, anybody watching this, most people are not graphic artists, so don't feel bad.

But don't be stupid and try to do it yourself if you're not a graphic designer. So, I mean, I'm just being real. If you're watching this or, Larry, for you personally, if you're saying, I'm a pretty good Photoshop guy but I'm not the best. Find someone who is the best.

Because my first impression-- we talk about it in a lot of our episodes-- but if you present me your business plan here in a Tiffany box-- if you present in a Tiffany box, it's going have a higher perceived value than if you bring it to me in a Kmart box or Kmart bag or anything Kmart. Does that make sense? So you're going to have to make sure your whole presentation, this whole thing, is world class. Cool? You deserve it but it's going to cost some money.

So just throwing it out there. Anybody watching and yourself, personally, your business plan, it's got to be-- if you follow this system and you don't have a decent visual presentation, usually people will reject the book because of the cover. Make sense?

Featured Coaching Excerpt - Notes & Transcript, Part 3
  • Pitch deck Includes: Marketing - Who are the customers? How big is the market? You summarized this in your problem slide and this is your opportunity to elaborate. How are you going to acquire customers? What customers have you already acquired?
  • Action Step: Research your prospective demographics to build a database to support your idea.
  • Lesson Nugget: Presenting proven statistics in your pitch deck that apply to your prospective demographics will validate your idea to investors.
  • Lesson Nugget: Researching, testing, and proving a marketplace exists for your concept can save you time and money.

[RAP MUSIC INTRO PLAYING]

-So we're moving on to the next one here. What's the next one? What does it say?

STUDENT: Marketing.

-Now real quick. Marketing could be market size, or it's basically how you're going to go to market and how big this market is. Make sense?

-OK. So who are the customers? How big is the market? You summarize this in your problem slide, so this is your opportunity to elaborate.

How are you going to acquire customers? What customers have you already acquired?

-So I'd ask you this question. Now you don't have to give any personal information on this, but I'm just asking you rhetorically, who are your customers?

-Yeah. And they're anybody in the world with a mobile device.

-And I think you're going to have to narrow it down, though. To like, what kind of people would use this?

-OK, yeah. People that want to learn. Want to have fun, playing a game, becoming engaged, being the top of a leaderboard.

CLAY CLARK: How old are these people?

-All ages. Well, all ages.

-So here's what I'm going to do. This is homework for you. You specifically want to know the age. You want to know the actual geographic area they come from. You want to know their age, their geographic area. You're going to want to have statistics that show, this is why these people are interested.

So I'm making up an example for you. But I might say, with my business plan, 12% of the American population is interested in this product. Statistics show, boom, most people who are interested in it are men who are between the ages of 25 and 35. And-- does that make sense? But you're going to have to show real statistics.

I'm gonna read you-- this is how detailed it should be here. Let me give you one. Says, India is experiencing a youth bulge. Nearly 2/3 of Indians are under 35. Half are under 25. By 2020, India will be the youngest country the world with a median age of 29 years. Compare with the median age of 37 in China at that point.

Well, who specifically is going to be watching this? Well, the people who are going to watch it are going to be of that age range. And I'm trying to show there's a huge need there. Cool?

But I'm also trying to show that in this country, they're having massive growth. So I'm saying, if the total number of sport viewers moves up the current 270 million, even 300 million, the jump in advertising revenues should be in double digits. Well if I say that, that doesn't mean anything.

But this guy has to show where he's getting this research from, and how he's arriving at these conclusions if the market even exists. Does that make sense?

STUDENT: Yeah.

-Let me give you an example of something that's insane. Years ago, there's a guy who came into my office who's probably a wonderful man. He's probably not an idiot. He's probably a good guy. He's probably somebody's dad, somebody's son, somebody's-- he's a good guy.

He comes in though with a product, and he believes that his product-- it's for those, like a table. If you have a table, he has this product for wedges that you would put underneath the table to keep this table from wobbling.

Now in your mind, would you buy that? Wedges that you can put underneath the table to keep from wobbling?

-No, or well, I'd have to know more. I mean, just by that, no.

-I would say, here's all I can tell you. It's a wedge that goes underneath the table.

STUDENT: OK.

-Would you buy it?

-No.

CLAY CLARK: Why?

Here's my take on it. I can go into my garage and find just about anything, outside of like a live animal.

I mean, I could take a block of wood. I could take a piece of paper. I could take a crumpled up piece of paper. I could take a twig. I could rip apart something.

I mean, I could put anything underneath there to make my table stop. I don't want to buy specific wedges to do that. Now, maybe there is a market for it. But this guy had no way to show that anybody was interested in it.

There's no data to show that people wanted this. And there was no way to show that-- he couldn't show it to anybody. So he comes into my office trying to raise investment capital.

He wants to raise $300,000 to mass produce these wedges. I'm sure he's a good guy, but he couldn't show there was a need for it. Does that make sense?

-Yeah.

-Let me give you another example. Years ago, a friend of mine, he borrowed from a bank, put his house up as collateral. Borrowed almost $300,000 to start a luxury company that offered a certain service to people.

And when he started marketing it, I mean he had billboards, mailers, print pieces, everything. Nobody bought it. Now if you were him, and you'd spent all that money on marketing, marketing, and you ended up basically having to pay it off over a long period of time. He's still paying off the note today.

He didn't lose his house, but he's still making payments. He wishes he would have known that no one wanted to buy it.

-OK.

-You know what I'm saying?

-Yeah.

-So one thing that Tim Ferriss did-- he's the guy who wrote "The 4-Hour Work Week" book-- he actually tested book titles on the marketplace to see which ones would get the most clicks on AdWords before he actually wrote a book. So before he wrote the book, he figured out which AdWords get the most clicks. Isn't that pretty cool?

-Yeah.

-So the book title was essentially decided on by people who were looking for books. So he literally came up with book titles, put it up there on the internet, and said, we'll track. And which every one got the most clicks, that became the book title.

Still make sense? Like he was trying to prove the concept. So for your idea, you're going to have to show that there is a marketplace out there that exists not just in your mind, but in reality-- I believe there is-- that needs your product. Does that make sense?

STUDENT: Absolutely.

-It's just really, really important that you do that.

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