Fundraising, Sales, & Product Development, Part 2

Part
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Part
01

Fundraising Best Practices: Identifying Investors

Two best practices for identifying potential investors for a startup are getting a solid intro to potential investors through social media platforms such as LinkedIn, Facebook, and Twitter and getting third-party feedback by creating a connection with the CEO of a company that the investor is currently connected to.

1. Get Third-Party Feedback

  • According to Tech Entrepreneur and Investor, the most successful access point to an investor is obtaining third-party views on what it is like to collaborate with them. Are they typically active or inactive? Do they comprehend the possible risks associated with the investment?
  • The best way to get this viewpoint is to establish a link with the CEO of company that is currently connected to the investor. A few interactions with them will provide a clear picture of the investor.
  • An article published by Entrepreneur states, "If the investor has a limited history of investments, service providers, like lawyers or accountants, can also be terrific sources to tap into."
  • Regarding potential investors, one must study their latest dealings and the potential services they could provide. Furthermore, the expectations they reserve for business leaders should be considered, along with their level of involvement in company operations.

Why It's a Best Practice

  • It gives more insights into the investor before one can make an informed decision on whether to solicit for funds from them or not.

2. Get Solid Intros to Investors Through Social Media Platforms

  • Success in business and fundraising is all about visibility, getting noticed by the right investors, who one knows, and who knows them. This can be achieved by going through social media platforms and databases such as Crunchbase.
  • The following are the most prominent social media channels and ways to utilize them:
  • LinkedIn can be used for cold messages or looking for "introductions to pass the social proof with guarded investors such as Venture Capital investors." LinkedIn Premium is useful for unlocking certain features.
  • Facebook is for maintaining a connection following the initial meeting with an investor, as it is essential to establish a relationship to create trust.
  • Meanwhile, Twitter is for mindful discussions and engagement with suitable data bestowed by the investor.

Why It's a Best Practice

  • This will help in understanding what the investor is ready to offer such as the potential services they could offer, the funding amount of their latest dealings, the expectations they reserve for business leaders, and their level of involvement in company operations.

Research strategy

The two practices were among the ones listed by most websites in their top ten or five practices, including Forbes, which is a renowned website.
Part
02
of six
Part
02

Fundraising Best Practices: Meeting Preparation, Part 1

Entrepreneurs should focus on presenting financials that are realistic and convincing, because investors pay more attention to this section than any other part of the presentation. Entrepreneurs also need to demonstrate how their products are uniquely placed to edge out the competition in the market.

Present Realistic and Convincing Revenue Growth Projections

  • When preparing pitch decks, entrepreneurs must present revenue growth rates that can attract investors. These growth rates must match the market size projected in the rest of the pitch deck.
  • While projecting growth, entrepreneurs must be realistic and factual. This is because seasoned investors can differentiate between hype and reality.
  • Entrepreneurs can backup growth projection numbers by benchmarking their data against others. This is done by business size, industry, or fundraising round.
  • The presentation should focus on break-even point metrics, such as time and resources needed to achieve profitability, how to maintain profitability as the company grows, and expected revenue per employee.
  • Entrepreneurs should present an annual recurring revenue, which is the most preferred metric by investors. The financial projections should cover a period of at least 3 years.

Why this is a Best Practice

  • 58% of successful pitch decks have a slide or multiple slides covering financials, and it is the most viewed section by investors.
  • Well presented financials determine whether entrepreneurs get the support they need from investors.
  • Investors are primarily interested in the growth rates of their companies. Over 34% of investors expect the companies they invest in to attain 3 times growth in the first 12 months.
  • In addition, these firms should hire to grow but in a scalable manner without diluting equity and company revenue.

Communicating How a Product Beats Competition

  • Entrepreneurs should demonstrate what the problem is they are trying to solve, why their product is the best-suited solution, and how many people are interested in it.
  • The presentation should cover existing competition as well as the market share that the entrepreneur is expecting of their product. This should be backed by facts that will make their target market choose their products over those of their competitors.
  • The key components to cover in this section include unique advantages and innovations that make the company positioned to edge out or beat the competition.
  • It is important to incorporate a marketing plan that gives maximum penetration for a product while maximizing profits. This should provide a long term strategy to acquire and retain customers.

Why this is a Best Practice

  • Investors are keen on how the products in their portfolio win in a large market share. Some investors hunt for opportunities that can give them 10 times ROI in 5 to 7 years.
  • Every winning pitch deck must demonstrate the problem, solution, and market that a business idea is built around.
  • Investors are interested in what makes the companies they invest in unique from others. This gives the portfolio an edge over their competition.
  • A great marketing plan answers the question of how an entrepreneur will attract millions of users to use their products.



Part
03
of six
Part
03

Fundraising Best Practices: Meeting Preparation, Part 2

Providing standard information in the presentation and sending in a pitch deck teaser are some additional best practices for preparing for a meeting with a potential investor.

Provide Standard Information in the Presentation

  • Knowing what to include in a presentation is one of the main factors in creating a document that can attract substantial investment. A standard pitch deck features the company's name, logo, and contact info, and provides a view of the concept to give investors an idea of what it is all about and get them interested.
  • It then introduces the problem as well as the company's solution or value proposition, indicates the market size and potential size of the opportunity backed by credible sources, information about the competition, and the startup's competitive advantage.
  • The pitch deck should also talk about what traction the startup has so far, its primary business model for customer acquisition and revenue generation, basic financial projections, information about current and previous investors, how the funds will be used, and information about the startup's team to show their experience in the industry.

Why this is a Best Practice

  • It is necessary to incorporate the above standard and accepted data in a presentation before making a pitch to venture capitalists as it shows an effort to learn what information investors want to see and could be more helpful than entertaining them with grand strategies, test results, and a gorgeous product.
  • It gives startup ventures a chance to reach their full potential and raise the needed funds on beneficial terms.

Send in a Pitch Deck Teaser Before the Meeting

  • Although entrepreneurs may have concerns about losing the ability to inspire potential investors verbally or risking a leakage of their confidential information via a VC who has not shown commitment, it is essential to send an initial pitch deck to investors in advance.
  • This "teaser deck" of about 8-20 pages should be visually stunning and compelling as it is designed to enable the investor to quickly and visually scan through the material.
  • It will give the investor answers to the questions of who the entrepreneur is, what they do, why they are truly unique, why there will be a significant market opportunity, and inform them about the unique and defensible intellectual property the entrepreneur has/will have that would allow them to be a market leader in their category.
  • It should include a title page that clarifies that it is not the full pitch deck.
  • Regarding privacy/confidentiality concerns, the teaser deck is meant to be a marketing deck that shows how amazing the startup is without revealing anything that would pose a threat to it if competitors copy them. It is necessary to show how amazing the startup is, because most ideas that are worthy of funding have several amazing competing teams, and winners are selected based on execution and team.

Why this is a Best Practice

  • Venture investors expect to see an initial investor pitch deck to ensure the business model is interesting, presents a big opportunity, and is supported by committed entrepreneurs before taking a meeting.
  • Sending in a teaser deck, probably attached to an email, gives the investors extra time to review and understand the startup's unique value and come up with short follow-up questions.
Part
04
of six
Part
04

B2B Sales Case Studie

B2B hardware companies that provide publicly available information on their sales organizations are difficult to find. One case study for a digital advertising company is provided along with other findings related to the sales landscape of B2B hardware companies in general.

Company 1: Eyetease

  • Eyetease is a small company (less than 10 employees) that developed the world's first digital taxi rooftop advertising product (iTaxitop) and the first high speed WiFi system for vehicles utilizing 4G signal (EyeFi, previously "CabWifi").
  • Founder Richard Corbett started the company by initially borrowing £150,000 pounds from friends and family in 2010 and had generated $5 million in revenue by 2016.
  • Eyetease received a number of awards over the years including Santander Bank "Top 5 fastest Growing UK Company" winner in 2014, HP Smart Business Award Winner in "Innovation" in 2013. Additionally, the company's product has been covered in news outlets such as Bloomberg, CNN, the Telegraph and Wall Street Journal.
  • The company's CEO delivered an address on the company's business journey in which he spoke about his tips for company growth and alluded to Eyetease's sales process. A key piece of advice was to break down a complex hardware product into a series of smaller features or products. This enables you to sell earlier and thereby generate revenue to reinvest into the larger product. For example, Eyetease first released its WiFi product ("CabWifi") as a standalone product which sold for £150,000 and then sold the first iTaxitop for £3,000,000 after a further 1.5-2 years of development.
  • In the same presentation, the CEO explained that having a strategy that accounts for market changes is important to remaining successful. For example, buy-in for and sales of the company's iTaxitop product increased with the introduction of Uber which caused taxi drivers at risk of losing their job to demand the digital taxi top because it would allow them to supplement their dwindling income from companies looking to advertise through them.

Related Findings:

  • Companies in the oil and gas sector need to use digital marketing platforms to sell their products as studies have shown that almost 74% of B2B buyers prefer to buy online.
  • A report done by Roland Berger and Google on the future of B2B sales found that companies need to make product information easily available online for business customers to find. According to the study, 90% of B2B buyers search for keywords on the internet and 70% watch online videos ahead of a purchase so that 57% of the sales process occurs before a representative is contacted.

Research Strategy

An exhaustive search was conducted to find the sales strategy employed by B2B hardware companies but with limited results. We focused our efforts on industry reports such as Forbes, BusinessWire, the Financial Times, Business Weekly, and Martechadvisor. While there were multiple sources on the effective marketing and sales practices for B2B companies in general, this was already covered in one of the previous research requests. As such, we have provided some insights about companies that serve the oil and gas industry as Optasense catered to that segment.
Part
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of six
Part
05

DAS: Transport Modeling and Tracking Solutions

Distributed acoustic sensors (DAS) are used in real-time tracking of trains to pinpoint exact locations to avoid collisions. DAS technology is also used to successfully run transport infrastructure by assisting in the analysis of traffic density and detecting disruptions. Detailed information is below.

Use of DAS for Real-Time Train Tracking

  • Conventional train tracking is done using communication between track-side equipment, train-side equipment, and the interlocking system. According to MDPI, these equipment systems must have "axle-counting sensors installed next to the track to deliver a signal for each axle that passes through the detector, and to ensure that a block is unoccupied before the next train enters the block."
  • In typical rail operations, the position of a train can only be known when it is inside a block that is located between two signals. Only one train is allowed to operate in one block at a time. This gives trains enough time to avoid colliding with other trains. The downside to this concept is that long stretches of the track remain unused. A train tracking technology that is accurate and reliable is necessary to solve this problem.
  • That is where DAS come in. DAS data and signals are used to track the exact location of trains. To obtain DAS signals, light pulses are injected into optical fibers located close to railway tracks and the Rayleigh back scatter light at the same end of the cable measured. This enables the vibrations of moving trains to be identified and tracked in real-time and for the exact position of the train to be pinpointed.
  • DAS use high sensitivity to assess the quality of the cable, detect, and locate temperature and strain changes along the cable. It is an accurate system for train positioning and tracking. It does not need any extra equipment installed on the train apart from a fiber optic cable that is already in place for data connection and communication purposes. This leads to cost saving during installation.
  • Trains are tracked to protect expensive equipment and prevent metal theft on railways. One pain point in the use of DAS in tracking trains is that coils of fiber exist alongside fiber optic cables, which ensures that repairs are carried out easily and quickly. However, when the coils are used to detect trains, they have "led to discrepancies between the optical distance measured in the cable and the true distance that a train has traveled."
  • The discrepancy has been resolved by identifying and filtering initial installations manually. This creates a logic in order to automate the process. With automation, an algorithm is created with the help of artificial intelligence, "which independently identifies, classifies, and filters the pattern occurring at the relevant points."

Use of DAS for Traffic Monitoring

  • Towns and cities rely on transport networks to move people and goods from one place to another. According to Fiber Gratings, the increase in the number of cars, 84% in the last decade, means that present traffic systems are overwhelmed with traffic jams and a reduction in road space. DAS are being increasingly adopted for traffic monitoring.
  • DAS are used to detect traffic flow using a fiber optic cable to detect traffic vibration signals. According to Fiber Grating, DAS have an advantage over other new potential smart transport technologies because they use fiber optic cables which are spread across road infrastructures and in many parts of cities and towns. Fotech adds that there is no need to fit point sensors or install new cameras, or deploy new technology as DAS operate using "standard telecommunications grade optical fibers."
  • The DAS systems use seismic or acoustic data generated from all traffic. A map display is used to monitor very long distances. Some incidents also create unique acoustic signatures that pass through fiber optic cables. DAS allows the acoustic information to be interpreted so that cities and towns can identify and track the signatures to help in monitoring of real-time traffic flows and public transport infrastructure.
  • DAS technology is used to make adjustments to the transport infrastructure to keep the traffic in cities moving. DAS systems assist in the analysis of traffic density and speed, detect disruptions such as broken-down vehicles, traffic jams, and congestion. In this case, the DAS system is used to redirect road traffic to balance overall vehicle flows.
Part
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of six
Part
06

DTS: Fire and Security

DTS heat detection systems detect fires, track sizes of spreading fire and monitor the direction of spreading fires in real-time. They are tracking systems that enhance the security and safety of critical infrastructure and personnel.

Usage

  • The DTS detection system monitors special hazardous environments over a long distance. It responds to extreme changes in temperature along the linear heat-sensing cable and sends an alert signal to emergency service personnel.
  • DTS can be used for early detection of ignition conditions and thus prevent fire.
  • DTS technology systems are extensively used in cable tunnels and cable trays to detect fires' origins in real-time. Most fires can be attributed to faulty electrical cables, routine hot works, and faulty electrical equipment.
  • Monitoring of power cables' surface temperature can detect "the deterioration of insulation caused by heat." It provides monitoring in real-time, which enables problem detection and reduction.
  • FO-LHD, a specific DTS detection system, is an ideal fire monitoring solution for conveyor belts. The system detects static and relatively large moving fires. The modern fiber optic sensors use a passive fiber optic cable to measure temperatures along a conveyor belt to detect any fires or overheating.

Why DTS Technology?

  • DTS is a reliable and cost-efficient method of fire detection for rail and road tunnels.
  • It is capable of fast alarming and providing a precise fire location in tunnels over long distances (up to 10 km).
  • It is the only detection system that can withstand temperatures of 1,000 degrees Celsius without losing its monitoring capabilities.
  • Determines and communicates the location of a fire event effectively and efficiently.
  • DTS systems can detect fires in areas that are difficult for DAS technology to monitor.
  • It is the industry’s fastest fire detection technology.
  • DTS technology has the lowest false alarm rate.
  • Optical cables used in DTS are "immune to electromagnetic induction," which makes them suitable for monitoring of insulation of power cables.
  • DTS can enable detection of temperature changes along a conveyor without gaps and blind spots, as opposed to thermal cameras and point sensors.

Significance of DTS Cable in Fire and Security Industry


Research Strategy

We started by searching through various articles, publications, and websites related to fire monitoring and alert systems. The focus was on the Distributed Temperature Sensing (DTS) and Distributed Acoustic Sensors (DAS) systems, best known for their effectiveness and efficiency. We identified the Distributed Temperature Sensing (DTS) system as the ideal system for use in the fire and security industry today.

Sources
Sources