steve barsh of dream it ventures on de risking for wharton entrepreneurship club february 2009

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De-Risking and Acceleration

Steve Barsh, Managing [email protected] * 215.888.2101

dreamitventures.com

barshbits.com sbarsh

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Agenda

• DreamIt Ventures

• De-risking & discovery

• Q&A

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Help great peoplewith great ideas

build great companies

• 3 month Startup Accelerator

• Pre-Seed investment

• Expertise

• Mentorship

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Entrepreneurs Receive

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Team Members

Professional Services

Community

Mentoring

Capital

Software + Resources

Expert Speakers


Premises & Observations

• Money too early• Validation from investors• Key risks• Out-of-box techniques• De-risk before

• Pitching• Building the product

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3 – 7 Key Assumptions

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De-Risking Goals

• Convert assumptions into knowledge• At lowest cost• As quickly as possible

• Decrease assumptionsto increase value

• Consume intellectual capitalbefore significant outside capital

• Succeed or fail quickly7

Dreamitventures.com Copyright © 2008-2009 by DreamIt Ventures LLC. All Rights Reserved.

Common Assumptions

Positioning / differentiationDemandMarket sizeFeature setCompetitionPricing / business modelSales / adoption cycleTeamProduct developmentExecutionMarketingFinancials & forecastsFinancial needsEnterprise value

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Common Problems

Key assumptions not captured and no time tableLittle discussion with potential customersLittle primary researchWeak demandPricing a guessMarketing field of dreamsStrategy alignment

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Stop Waving, Start Pointing!

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100% Sure?

• Plans

• Presentations

• Pitches

• Financial models• Forecasts

• Estimates

• Things with numbers or graphs

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Experiment

• Hypotheses

• Prove or Disprove

• Build -- Release, measure, learn, iterate

• Research

• Valid proxies

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Key Investment Questions

• Key assumptions, dependencies, and timetable?

• Evidence we are looking for?

• Assumptions de-risked before further investment?

• Success criteria (e.g., market uptake; revenue; impact, financials, etc.)?

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3 Main Takeaways

1.Key assumptions

2.Experiments

3.Convert assumptions into knowledge

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More Info

• Redeye VC Blog: Failing Cheaper by Josh Kopelman, First Round Capital.

• Common Mistakes Made by Entrepreneurs by Mark Henricks.

• How To: Raise Money in a Down Economy by Eric Ries at KPCB.

• Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity (March 2009) by Rita McGrath and Ian MacMillan (Wharton)

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Agenda

• DreamIt Ventures

• De-risking & discovery

• Q&A

16


De-Risking and Acceleration

Steve Barsh, Managing [email protected] * 215.888.2101

dreamitventures.com

barshbits.com sbarsh

17

Supporters

steve barsh of dream it ventures on de risking for wharton entrepreneurship club february 2009

Business

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assumptions derisked

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