Screening Venture

Opportunities
Group 4
What will Investors look for?

 Pain and Gain

 Strong team
 Attractive market
 Scalable business models
 Unique product
 Traction
What should you look for?

 Passion
 Self-efficacy
 Customer access
 Network
 “Bootstrapability”
Screening Venture Opportunities
“you do not have a strategy until you say no to a lot of opportunities”

Time is the most valuable asset of any entreprenuer and also the most
scared resources. The harsh reality is that you will never have enough
time in a day, month, a quarter or a year to pursue all the business ideas
you can come up with. The entrepreneurs paradox is that you must find
and maketime for a good one. Complicating this paradox is that what it
says above this paragraph ( the quoted ones as you see). Estimtes shows
that only about 10% of potential opportunities generate acceptable levels
of sustainable income for the founders.
Anchor of Superior Business
 There are tools to help you in the titanic struggle to determine if your
ideal is a truly a business opportunity. Ideas that turn into a good
business are not accidents. Superior business have four “anchors”
 They create or add significant value to a customer or end-user
 They do so by solving a significant problem, or meeting a significant want
or need, for which someone is willing to pay a premium
 They have robust market ,margin, and moneymaking characteristics:
(large enough, high weeds, high gross margin, strong and early free cash-
flow, high profit potential, and offer strong and reliable returns for
investors)
 They are god fit with the founders and management team at the time and
marketplace and with the risk-reward balance
Adams on Customer
 Before you built, validate the market
 Don’t have any solution looking for a problem
 The ready fire aim approach
 Common illusion- I know my customers
 Limited feedback and personal experience generate the illusion

 Why validate
 Get the product right for the first time
 A beta community emerges
 You generate a ready-made contact list of first customers
 You can more easily raise smart investment capital
 You can use the capital more efficiently
 You can clarify your competition
Market Validation
 You cannot sell to everybody
 A target market is limited, discrete subset of companies or individual
whose pain is so great without the product that they readily buy it
 Your solution should be a “must-have” for your targets
 Pyramid of influence
o Stage 0: Secondary Research
o Stage 1: Primary Market Research
o Stage 2: Quality Influences
o Stage 3: Leverage Influencers
Stage 0-1
 Secondary research
 Market size, trends, growth
 Research competitors, customers
 Remember that secondary research is not validation
 Primary research
 Who needs the product the most?
o Who has the worst pain?
 What does the market looks like?
 Test at least 3 hypocrites with the data
o Be prepared to revise hypotheses and start again
 Interview at least 100 customer
o Understand the customers and develop a sense of their pain
o Make it everyone’s job to interview- even engineers!!!!!!!!!!
o Get a professional firm to develop questions and analyze data
 Eliminate temptation to lead customers or offer a solution
Stage 2
 Qualty influencers
 Have high pain, interested in a solution, willingness to be contacted again
 Also use thought leaders (Vincent) who also understand the pain
 Presentation & Prototype
 Outline the pain, the target segment, and the solution
 Demo and prototype
 Results:
 Ffedback on essential product features
 Cultivate ore customer
 Fine-tine presentation and prototype
Stage 3

 Leverage influencers
 Analysts, thought leaders, editors, consultants, and Vincent
 Get them excited!
 Results:
 Visibility in analyst reports & publication
 Customers change – keep validating
 Build what the customers want and only what they want
Quick Screen

 Investors only invest in about 5% of business, so it is essential to focus

only on a few superior ideas. The ability to quickly and efficiently
reject ideas lacking of characteristics of “anchors”, is a very
important entrepreneurial skill and mind-set. Saying no to an idea
may conflict with your particular passion or commitment to the idea.
To make this choice easier entrepreneurs use specific tried-and-tested
methodologies such as the Quicky screen or “VOSE” presented in the
next slide. Quick screen is used to conduct preliminary review and
evaluation of the idea in about an hour. Unless your Quicky shows
sufficient potential to demonstrate that it will meet that for anchor,
you will waste a lot of time on low business potential ideas, and to
select the potentially good ones for the further analysis.
What is VOSE?

 Venture Opportunity Screening Exercise

 Segments the screening of ideas into extremely detailed but
manageable pieces
 I have mixed feelings
 These are the best screening instruments available
 Is it possible to know all the answers to these questions so early?
o Gives a roadmap for end of semester
Thank You

Members
 Jeannett Ann Bautista
 Vincent Buerano
 LenLyn Baula
 Edwin Jr. V. Bautista