dr.bozesan on economic empowerment of women global summit of women kuala lumpur2013
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Pitching to Investors: Financing your Business for GrowthTRANSCRIPT
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
11 © 2013 AQAL Capital. Strictly Confidential. For qualified investors only
Dr. Mariana BozesanClub of Rome Full International Member
President & Founder, AQAL InvestingPartner, AQAL Capital
June 2013, Kuala Lumpur
Pitching to Investors: Financing Your Business for Growth
An Integrated Approach
© 2012 AQAL Investing. All rights reserved.
Dr. Mariana Bozesan
• Masters Degree in Computer Science – Studied at Stanford University and Karlsruhe Institute of Technology
• Doctorate, Ph.D. in Psychology, ITP Palo Alto California• Private Equity Investor:
– 18 Years of high-tech, bio-tech, & clean-tech investing
• Serial Entrepreneur: founded 4 companies • Venture Philanthropist: Supporting > 38 NGOs
My MOTTO: PARITY OF PEOPLE, PLANET, PROFIT, with PASSION, and PURPOSE
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© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Outcomes Today
1. Why understanding the global context in which you operate is crucial for your success?
2. Why your business must be an integrally informed business to succeed?
3. Why understanding capital will help you attract it to make your dream come true?
4. Why you are the biggest investor in your business and why you are the most important person in your life?
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© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
Lehman, Fukushima, Madoff, Libor, Climate Change, Debt Crisis…
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
… lead to wealth owners’ sinking confidence in institutional investors*
*Source: BCG Report, Regaining Lost Ground: Resurgent markets and new opportunities. Becerra et al.2010.
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
>= 10% of High Net-Worth Individuals want sustainability in both financial terms and impact, but cannot get it
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
…. because innovative financial products that can fulfill their needs are
missing at large scale
© 2012 Integral INVESTING. All rights reserved.
Thus, many HNWI are bypassing institutions
• Seeking alternatives to traditional fund products, often sobered by weaker than expected past product performance
• Wealth owners are self-organizing: –AVIVA Corporate Sustainability Coalition ($2 trillion) – International Integrated Reporting Committee (IIRC)– International Stock Exchange Initiative–Sustainable Capitalism Manifesto – Al Gore–The Giving Pledge, GIIN, incl. self-organizing family
offices, TONIIC, PYMWYMIC, AQAL Investing, etc.
*Source: J. P. Morgan & GIIN Report: Insight into the Impact Investment Market. December 14, 2011
Market drivers
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Traditional investing is challenged*
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Market drivers
• Financial crisis lead to fear and uncertainty– Falling revenue and margins– Massive capital migration– Frustrated wealth owners losing trust in their asset managers– Alternative and customized investing are on the rise
• Traditional investing often focused on short-term profit maximization at the expense of long-term health of global community, culture, environment, ethics, and overall human happiness
• Traditional investment metrics often missed sustainable, time-based businesses and responsible investment opportunities
• Many traditional asset managers failed to develop a core competency in alternative investing opportunities including impact investing (SRI/RI/ESG) Profit
TRADITIONAL INVESTING
Profit Metrics
e.g.
WALL STREETBERKSHIRE-HATHAWAY
KKRSEQUOIA CAPITAL
*Source: Mulcahy, D. & Weeks, B. & Bradley, H. S., (2012, May). We have met the enemy …. And he is us: Lessons learned from twenty years of the Kauffman Foundation’s investments in venture capital funds and the triumph of hope over experience. Kauffman Foundation Research
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
Impact Investing is growing but is fragmented
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Impact Investing is fragmented in terms of motives and approachTwo types of Investors*• Financial (Profit) First Investors
– Pursue the optimization of financial returns before having an impact floor
– Investors “are not willing to accept lower than market returns as a cost to optimizing social or environmental goods, although they still make a positive impact”
• Impact (People/Planet) First Investors – Seek to optimize social and environmental
impact with a financial floor– For greater impact, investors are willing to
accept lower than market financial returns.
IMPACT INVESTING
Sustainability Metrics: ESG
Triple Bottom Line
Profit
People
Planet
e.g.GRAMEEN BANKTRIODOS BANK
GLS BANKBANK SARASIN
Market drivers
*Definition after (Eurosif, 2010, p. 7)
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Global Sustainable Investing (SRI/RI) is growing*• Global Sustainable Investments
using some kind of ESG criteria reached US$ 13.6 trillion (=21.8 % of total AUM in 2012) with
– Most common strategy being Negative/exclusionary screening, US$ 8.3 trillion AuM
– Norm-based screening, US$ 3.0 trillion AUM mostly Europe (65% of known SRI AuM)
– Positive/best-in-class screening 1.0 trillion AuM, mostly US
– Assets utilizing ESG integration are at US$ 6.2 trillion
Market drivers
*Source: The Global Sustainable Investment Alliance (GSIA) Report 2012, http://gsiareview2012.gsi-alliance.org
• Impact Investing theme investments are still fragmented and
– Comparatively small at US$ 89.0 billion
• Sustainability theme investments
– Are also comparatively small at USD 83.0 billion
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
The Integration between Traditional Investing and
Sustainable Impact Investing is needed
© 2012 AQAL Investing. All rights reserved.
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© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Integral Metrics
Planet
People
Profit
Ethics, Ego, Emotions &
ConsciousnessBehavior
ExteriorInteriorIn
divi
dual
Colle
ctive Culture
& Morals
INTEGRAL INVESTINGAQAL Investing, AQAL CAPITAL, Natural
Investing
Integrating Traditional and Impact Investing
Profit
TRADITIONAL INVESTING
Profit Metrics
e.g.
TRADITIONAL WALL STREET BANKS
AND VENTURE CAPITAL
FIRMS
IMPACT INVESTING
Profit
People
Planet
Sustainability Metrics ESG, IRIS, SAM
Triple Bottom Line
e.g.GRAMEEN BANK
LGT VENTURE PHILANTHROPY
Integral Investing is based on Ken Wilber’s Integral theory that is widely applied in 35 disciplines including science, politics, economics, education, medicine, and business; Ken Wilber is endorsed by Nobel Prize laureate Al Gore, former US President Bill Clinton, former Secretary of State Hillary Rodham Clinton, and is also used i.e. at McKinsey and Company. Source: Wilber, K. (2000). A theory of everything: An integral vision for business, politics, science, and spirituality. Boston: Shambhala.
Strategy
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
Your best bet in financing your business are
Integral Impact Investors
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Outcomes Today
1. Why understanding the global context in which you operate is crucial for your success?
2. Why your business must be an integrally informed business to succeed?
18
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
What business are you in?
© 2011 Dr. Bozesan. All rights reserved.
SOCIAL
ENVIRONMENTAL
PROFIT
EGOVALUESNEEDS
EMOTIONSCONSCIOUSNESS
Ethical BEHAVIOR
ExteriorInterior
Indi
vidu
alCo
llecti
ve CULTURE& MORALS
PROFIT
TRADITIONAL BUSINESS
SOCIAL BUSINESS
INTEGRALLY INFORMED BUSINESSESS
Whole Foods, Patagonia, REI
Evolution of Business
SOCIAL
ENVIRONMENTAL
ENRONWALL STREET
BPMONSANTO
PHILLIP MORRISGILLETTE
McKinsey & Co.
GRAMEEN BANKPHINEO
LGT VENTURE PHILANTHROPY
UBS GLOBAL PHILANTHROPYSKOLL GLOBAL THREATS FUND
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
Are you creating a valuable, sustainable, and responsible business
that is also financially successful?
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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e.g. Whole Foods: +40%
Higher ROI than FoEsover 10 years
(1800% shareholder value 1995–2006)
Sample: 8.0xhigher ROI than market average (S&P 500) over
10 years; and -
3.1xhigher than GGCs
3.0x higher ROI than market average (S&P 500) over
15 years
GOOD TO GREAT COMPANIES (“GGC”s) - 2002•Nucor; Kimberly-Clark•Kroger; Walgreens•Wells Fargo; Gillette
ESG & INTEGRALLYACTING BUSINESSES•The Container Store; REI•Whole Foods; Trader
Joe’s; Patagonia; DM•Stoneyfield Farms
FIRMS OF ENDEARMENT (“FoE”s) - 2007
•Patagonia; Amazon•Southwest Airlines• IKEA; BMW; eBay•Google; AVEDA
*Source: Sisodia, R., Sheth, J., Wolfe, D.B. (2007). New Jersey: Wharton School, p. 16
Evidence: Risk reduction & inclusive sustainability already visible with ESG & integrally acting companies
Evidence
Results of the ongoing Shift to Conscious Capitalism
© 2010 AQAL INVESTING. All rights reserved.
Outcomes Today
1. Why understanding the global context in which you operate is crucial for your success?
2. Why your business must be an integrally informed business to succeed?
3. Why understanding capital will help you attract it to make your dream come true?
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© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
To empower yourself financially you must understand sources of capital
how it works, and how to get it
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Strategy
GOVERNMENT CAPITAL Debt, Equity, Grants
PUBLIC-PRIVATE PARTENRSHIPS
German Kreditanstalt für Wiederaufbau (KfW), European Investment Fund, USAID
ExteriorInterior
PLANET
PEOPLE
PROFIT
ETHICS EGO
EMOTIONSCONSCIOUSNESS
BEHAVIOR
Indi
vidu
alCo
llecti
ve CULTURE& MORALS
INTEGRAL CAPITALGeneration, Giving Pledge, Capital Missions Company,
Natural Investing
Integral capitalregular - government - philanthropic - donations
PROFIT
TRADITIONAL CAPITAL
Debt & Equity
WALL STREETGOLDMAN SACHS
JP MORGANKLEINER PERKINS
PHILANTHROPICCAPITALDonations
PEOPLE
PLANET
BERTELSMANNROCKEFELLER
FOUNDATIONS
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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TARG
ET F
INAN
CIAL
RET
URN
TARGET SOCIAL, ENVIRONMENTAL, ETHICAL, CULTURAL, & HAPPINESS IMPACT
PROFIT FLOOR
IMPA
CT F
LOO
R
FINANCIAL FIRSTINVESTORSOptimize financial returns with an impact floor
IMPACT FIRSTINVESTORSOptimize social and environmental impact with a financial floor
Philanthropy
Making MoneyINTEGRAL INVESTINGRisk-adjusted optimal financial return and premium impact returns
Strategy
Integral Investors care about the 6Ps: Parity of People, Planet, Profit, Passion and Purpose
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
But, how to convince investors to invest in your business?
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The Elevator Pitch• Be concise, <250 words, 90 seconds• Explain the problem you solve• Describe the benefits of your product/service• Make it easy to understand • Grab attention• Qualify the prospective (integral?) investor• Show your passion: People invest in YOU!!!!• End with an action plan• You want them to listen to YOU, not to invest
(yet) in your company !!!!!
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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A Good Fundraising Presentation
• Use simple pictures, diagrams, and graphs • Be specific• 20 minutes• Build bullet points - 30 point font and Arial• No fancy animations• No clutter• Put your corporate logo on every page• Think different• Be a mensch – simply be YOU
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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The Ten Slide Presentation
• Slide 1: Title: What does your company do?
• Slide 2: Problem: What problem are you solving?
• Slide 3: Solution: How do you solve this problem?
• Slide 4: Biz model: What is your business model? –How do you make money?
–What is your social, cultural, environmental impact?
–How do you distribute your goods/service?
–How do you create value?
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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The Ten Slide Presentation (cond.)
• Slide 5: The Magic: What makes your company better than the others? –Technology?
– Intellectual Property (IP)? # of patents?
–People?
–Where’s the magic?
–NEVER share your “secret sauce” without an NDA
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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The Ten Slide Presentation (cond.)
• Slides 1-5: get their attention by telling the investor why to invest in your business
• Slides 6-10: now that you have their attention, tell them why you will succeed
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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The Ten Slide Presentation (cond.)• Slide 6: Marketing and Sales:
–How do you reach your customer and close sales in a reasonable time and on a tight budget?
• Slide 7: Competition: –Who are your competitors and why are you better?
• Slide 8: Management Team: Why you?• Slide 9: Financial Projections and Key ESG Metrics:
–The promises you make to your investors• Slide 10: Milestones: status, timeline, use of funds
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Key Advise
• Tell an exciting story. People invest in YOU• Your customers are suffering terribly in the world
as it is today• They desperately want the world/current
business situation to change for the better.• “Better” means that _________________.• But, something terrible is preventing this
change…• But, there you come ….. With the solution
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Key Advice (continued)
• A HAPPY ENDING! – Your company has the magic solution– Life will get better in the world– Your customers will buy your solution because they
have to have it– They will buy lots of it– They will pay lots of money for it
• PS: This will happen quickly, on budget, and then there will be an juicy exit/ a liquidity event….
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Storytelling techniques that work
• Good analogies powerfully connect your concept to a concept that the listener is familiar with
…it’s a Yahoo! for your town……it’s an IPOD for non-contextual data……it’s like the FAX machine …..…just like digital cameras are replacing traditional
silver halide chemistry, this technology is the revolution in printing substrates…
© 2011 by Dr. Mariana Bozesan. All rights reserved.
Storytelling Techniques• Tell your personal story of pain and suffering
that led you to found your company. • Move the story along in an interesting way• Explain why you‘re the right woman for the job
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
For an investor, an investment decision is all about managing
RISK
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Q & A: Addressing Concerns
• Potential Risks: –Technology risk – IP-related risk –product risk –market risk –people risk, the competition, financing risk, barriers
to entry, regulatory risk, environmental concerns, political risk, liquidity concerns…
• You MUST to have the answers
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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The 11th Slide
• The Offer: – How much are you raising? How much of this amount is spoken for? – Do you have a valuation in mind? How flexible are you? – Do you have a lead investor yet? – What is your timetable for this financing?
• How will you use the funds?• What are the milestones? Where will the company be when
this money runs out?• What are the next steps?• GIVE YOUR CONTACT INFORMATION
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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What Investors Are Looking For?
• Management team: experienced, driven, ambitious
• Market attractiveness: big, in pain, adoptable, rich
• Competition: weak, unable to adapt, missing the market, do they look more like potential acquirers?
• Technology/Product: unique, patentable
• Forecasting results: clear understanding of the business, clear business model, sensible relationship between milestones, new hires and additional capital requirements, path to liquidity
• Making a difference and having an impact!
© 2012 AQAL Investing. All rights reserved.
Outcomes Today
1. Why understanding the global context in which you operate is crucial for your success?
2. Why your business must be an integrally informed business to succeed?
3. How to attract and where to look for capital to make your dream come true?
4. Why you are the biggest investor in your business and why you are the most important person in your life?
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© 2012 AQAL Investing. All rights reserved.
Measuring Success: Keeping the Promise of Millennium Development Goals
Sustainable DevelopmentClean Water
Population and Resources
Democratization
Long-term Perspectives
Global Convergence of IT
Rich/Poor Gap
Health IssuesCapacity to Decide
Peace and Conflict
Status of Women
Transnational Organized Crime
Energy
Science and Technology
Global Ethics 1215
314
4
5
6
7
8910
11
12
13
Source: Millennium Project of WFUNA, www.millennium-project.org
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
What is missing?
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The interior aspects are missing
© 2012 AQAL Investing. All rights reserved.
Source: “Heart Disease and Stroke Statistics—2005 Update”, American Heart Association; “United States Cancer Statistics—2002 Incidence and Mortality”, CDC and the National Cancer Institute
Some interior challenges1 in 2 adults are dying of cardiovascular disease 1 in 3 people are
dying of cancer
Obesity is one of the most significant public health challenges of this century: 2 in 3 adults in the industrial world are overweight or obese
1 in 3 children in developed countries are overweight
Diabetes is one of the fastest growing diseases of this century
Copyright 2010 |
© 2012 AQAL Investing. All rights reserved.
DivorceAverage rate in the West 50%*
There Is More
Social Isolation
Depression7 in 100 people, 10% treated 1 man 2 women
AddictionsShopping: 1 in 20 suffers from shopping addiction in the US; 30% of Austrians are endangered
ViolenceWHO: Leading public health problem Cost to victims in the US 10% of GDP
Compulsive DisordersOnline gaming: 10% of 40M Chinese teenagers; 8.5% US teenagers
Source: Sieglitz, Sen, Fitoussi, (2009) “Report by the Commission on the Measurement of Economic Performance and Social Progress”
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
We only have a consciousness crisis today
© 2012 Integral INVESTING. All rights reserved. © 2013 AQAL Capital. Strictly Confidential
How are you doing as a human being?
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You must be the most important person in your life to succeed
© 2012 AQAL INVESTING. All rights reserved. © 2012 AQAL INVESTING. All rights reserved.
Take good care of the beautiful YOU – the rest will follow
© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
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Summary
1. Evolution is on our side • Thinking globally and acting locally is crucial for your success
2. The future of business is integrally informed • Implement the 6Ps and you will be wildly successful
3. Attract integral impact investors and you will succeed
• Remember: You are the biggest investor in your business
4. You are the most important person in your life• Take good care of yourself• Have fun
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© 2013 AQAL Capital. Strictly Confidential. For qualified investors only.
5757 © 2013 AQAL Capital. Strictly Confidential. For qualified investors only
THANK YOU!Dr. Mariana [email protected]
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