Venture Fundamentals

Gigi Wang
Managing Partner, MG-Team
Industry Fellow, UC Berkeley
ACE Incubator, November 2021 Cohort
Zoom Conferencing (online)
30 November 2021
My Journey
 Born in Taiwan, grew up in US. Taiwanese is 1st
language
 Stanford University BS/MS Mechanical
Engineering, UC Berkeley Haas MBA
 Started career at 3 Fortune 100’s – Exxon,
Pepsi, AT&T
 Moved to founding or early stage teams of start-
ups –InterNex (acquired), Pacific Internet (IPO,
NASDAQ), Ascend (acquired), UptimeOne,
QALA (acquired), Runa (acquired for $70m)
 Currently:
o Industry Fellow & Faculty, UC Berkeley
o Managing Partner, MG-Team (global
innovation/ entrepreneurship training &
international business development services).
ACE, Amsterdam Business School, IXA,
Ministry of Economy in NL.
My Start-up Successes & Failures

TCM Online
Global Entrepreneurship & Innovation
Mentoring ACE Startups since 2012
Fundraising – not for faint of heart

Delivered >100
presentations to
40+ investors to
raise a round of
$10 million for a
start-up in Silicon
Valley.

Slide 7
Questions to Answer
(for any investor)
What is the BIG Need /Opportunity? Who are the customers?
How big is the market?
What is your solution and why is it uniquely better?
What are the benefits for the customers?
Who are the competitors and why are you better?
How do you make money (Business Model)?
How are you Going-to-Market and getting your product
adopted by the customers?
What is the traction which validates your venture?
Who is on the team? How will they help you succeed?
What are the financial projections? Revenues & Costs? How
much funding do you need and for what (ASK)?
Big Customer Need
There must be a huge compelling market need
with lots of customers who will use your product
and pay for it
 Ex: iPad addressed need for user-friendly digital device for
older people. And they could afford the high cost iPad.

There must be significant market potential,

regionally, globally
QUANTIFY THE MARKET SIZE!!!!
Creators of Huge Value
Clear Product Description - Huge Benefits
Ex: Triple E cancer treatment
Lumicks (May ‘13 ACE Boot-camp)
ACE May 2013 Cohort – Lumicks
Product-Market Fit
“Product/market fit means being in
a good market with a product that
can satisfy that market.” -
Mark Andreessen, Entrepreneur and VC

• Necessary for a product to succeed in target market.

• The product not only has to address the target
market customer’s need, but has to be easy to
adopt.
• Customer Validation needs to be done
Considerations for P-M Fit
•Barriers to Adoption
o Learning how to use product
o Changing existing behavior
o Switching costs (Android vs iPhone)
•Total Costs of Ownership
o Expertise of personnel
o Maintenance (BMW vs Toyota fuel &
repairs)
Customer Segmentation
Total Addressable Market Autonomous Vehicle Kits
(TAM) vs Market Segments
Identify the target market
segment and customers and Cars
FOCUS
Serviceable Addressable Trucks
Market (SAM)
Buses
Do not try to address all
segments at the same time –
FOCUS!!!
TAM = all vehicles
Market Segments
Ex: Exometry – no segmentation
(Amsterdam Boot-camp)
Applying optics to improve
small particle flow cytometry

Frank Coumans, Mercedes Tuin, Edwin van der Pol

Academic Medical Center

Day 1 ACE Venture Lab Bootcamp

Ex: Exometry – WITH segmentation
(Amsterdam Boot-camp)
Kit for early diagnosis of blood clots

Frank Coumans, Mercedes Tuin, Edwin van der Pol

Academic Medical Center

Day 5 ACE Venture Lab Bootcamp

Quantify, Quantify, Quantify

Quantify Market Size, Benefits, Costs, Etc

How Big is Target Market?
 Top down calculation, year 1 (1995):
• TAM: 3m people in SG ÷ 5 people/ household
x $20/month x 12 = $144 million
• SAM: Targeted segment of households with
students 16 – 24 yrs old = 35%  $50
million
• Penetration of SAM of 10%  $5 million

 Bottoms up calculation, year 1 (1995):

• Capacity: Add 5000 accounts per month @ IPO 1999 with
Market Cap of
$20/month. $530 million

• Total revenues achievable  $7.8 million

Market Research
 Secondary Research
 NOT direct with customer
 Google searches
 Existing industry reports
 Analysts like Gartner,
Forrester, IDG
 Annual reports
 Industry events
o Program / topics
o Speakers
 Media
o News, industry mags
o Magazines
 Government data bases
 Primary Research
 Talk directly to customers,
partners, analysts
o Conferences
o Networking events
 Set up meetings
o Use LinkedIn to connect
o Hire business
development resource
 Custom market research
firm
o They do interviews
o Focus groups
o www.clearworks.net
EX: Annual Report - Tesla
Market Research Firms
Business Models
How to make money!!??? Not just generate revenues,
but be a profitable business .
I nnovative business m odels catch investors’
attentions. Driving unicorn valuations.
 Innovative: Transforms processes, identifies new revenue

The Digital W orld enables a whole new realm of

business model opportunities.
Data-Driven Business Models*

*Shomit Ghose, General Partner,

Onset Ventures
Harness Data to Improve Business

• Increase Revenues
– Not just selling data

• Decrease Costs
– Ex: Minimize waste
Recommended Reading
Competition
There needs to some competition
 OR ELSE there is no customer or
market for this solution
Direct competition are those who
are doing the same thing
Indirect competition is
something else that the customer
can choose to address their need
EX: Direct vs Indirect Competition

SOLUTIONS
FOR UTERINE
LINING
DYSFUNCTION

Direct Competitive Solutions Indirect Competition

Unique Differentiators
What are the unique differentiators that make
your solution special?
The unique differentiator may not be the
technology, but how the solution is positioned, the
target market, or how it is brought to market

Same features, addressed different needs & target segment

Getting to Market
How is your solution
positioned?
 NIKE – not just a shoe
company
 Exxon-Mobil – not just an oil
company
How are you going to get your
solution out there?
 How are you going market your
product?
 How are you going to sell your
product? Beach-head strategy
Positioning  Millions or Billions $

OR

Community for Women

to Lose Weight
Just an Exercise Bike
Why the difference in price?

iPhone 11 Pro Max Samsung Galaxy S20

~$1100 ~$700
Ex: Be Creativity to Stand Out!

In 2008
• Founders struggling
with customer
acquisition
Read Article on CEO Brian
• Running low on cash Chevsky talk about early
challenges
Validation or “Traction”
Any proof that people would be interested
in solutions to this problem, preferably
yours:
o Customer market research & validation
o Showcase customers, partners, investors or advisors
(logos are good)
o Quotes supporting your solution or company
o Share the progress you’ve made with your company
- The number of downloads, amount of traffic,
amount of funds raised can also be used.
Example of Traction
The Team
Why is your team the right one to make this venture a
success?
Does the team have the right skill set? There needs
to be a LEADER (a CEO!)
Do the members of the team complement each other?
Are there past success stories? Highlight relevant
successes and failures
Company Roadmap
Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

2018 – 2019 2019-2020 2020-2021 2021 - 2023 2023 -

Field Commercial Production Growth Maturity
Trial launch ramp up

Lab Plant setup Scale Up Production Full Scale

production Production growth production
Site trials at Early
Goodmaid production
Marketing Aggressive Regional
United
Detergent, Sales Sales Sales expansion
Southern
Lion
Financial Projections
For investors to get insights into your financial
goals, usually with a 5 year time-frame
Revenues
o How will you make revenue?
o How much will you make and how fast?
o How fast do customers pay?
Costs
o What are your major costs?
o How does your costs scale with revenues?
Do you need funding? For what?
o Investors want to hear you are looking for funding, so
they have a chance to get in on the opportunity
o What milestones will you achieve with the funding?
Questions to Answer
(every investor will ask)
What is the BIG Need /Opportunity? Who are the customers?
How big is the market?
What is your solution and why is it uniquely better?
What are the benefits for the customers?
How do you make money (Business Model)?
How are you Going-to-Market and getting your product
adopted by the customers?
What is the traction which validates your venture?
Who are the competitors and why are you better?
Who is on the team? How will they help you succeed?
What are the financial projections? Revenues & Costs?
Questions to Answer
(every investor will ask)
What is the BIG Need /Opportunity? Who are the customers?
How big is the market?
What is yourThis set ofand
solution questions
why is itwill be yourbetter?
uniquely
referenceforforthe
What are the benefits developing
customers? your
start-up venture.
How do you make money (Business Model)?
If you can answer all the
How are you Going-to-Market and getting your product
questions,
adopted by the customers?you are on your way
to buildwhich
What is the traction a successful
validatesstart-up...
your venture?
Who are the competitors and why are you better?
Who is on the team? How will they help you succeed?
What are the financial projections? Revenues & Costs?
Thank you!
Gigi Wang
Managing Partner, MG-Team
Gigi.wang@mg-team.com
Industry Fellow & BMOE Chair, SCET, UC Berkeley
gigiwang@Berkeley.edu
+1 925 963 8407

Presentation link will be posted in MentorJam.

Email gigi.wang@mg-team.com if you want it sent.