Pitch ‘n’ Win CAPITAL #1

Pre-Pitching to Investors

Pre-Pitching to Investors

Got a business idea and need to raise CAPITAL from angel investors? Validate your idea and practice your pitch in this closed group before talking to any investors.

You are allowed to pitch for 5 minutes and then take questions and receive feedback for another 10 minutes. The pitching must be in the following sequence:

1. Title of your project (Please use a good, short, catchy, concise and straight to the point title. Do not use more than 5 words.)

2. The Problem (The most important thing is to identify a problem that is worth solving. If your product or service doesn’t solve a problem that potential customers have, you don’t have a viable business. Simple as that.)

3. The Solution (Too many entrepreneurs start with a solution: a product or service that they think the market needs without first identifying the problem they are solving. As a smart entrepreneur, you can avoid this mistake by first making sure that you are solving a real problem that customers actually have before you define your solution).

4. How much you plan to raise and the proposed use of fund?

5. What is the investment offering? i.e. How much equity are you willing to allocate to the Investors for that funding amount?

The audience will vote for the top pitch. The winner will be invited to speak for another 10 minutes to cover topics such as the market potential, competition, team etc, and get further coaching from CAPITAL.com.my on the spot.

Regardless whether you are selected or not, the organizer will follow up on your idea if it is interesting enough.

7:30pm Welcome note
7:40pm Pitches & Feedback (6 pitches)
9:10pm Winner’s presentation (1 winner)
9:20pm Closing & Networking

There are only 6 pitching slots. To ensure you can present about yourself, please contact the organizer at https://www.facebook.com/messages/PitchnWin to book your slot.

The event is free. Please pay for your own dinner and drinks. RSVP now to pitch or listen to pitches.

CAPITAL.com.my is managed by GLOBAL BRIDGE MANAGEMENT SB, a growth consulting company provides growth financing in exchange for equity ownership, a highly experienced team and network of resources and timely market intelligence that propel business of all size to its next level. Check out http://www.CAPITAL.com.my/

Pitch ‘n’ Win is a fun event platform where everyone can pitch, present, share and learn from one another. Find out more at http://www.PitchnWin.com/

Global Bridge in South East Asian SME Forum

South East Asian SMEs provide potential investors with rewarding returns but how does a company go about raising investment capital and what are critical aspects of evaluation? This two-day forum brings together 100 of the region’s small and medium-sized enterprise owners and entrepreneurs. This strategic initiative is tailored for Malaysia and the region and it is a networking and knowledge-sharing platform enabling attendees to discuss and share solutions and strategies to help the Malaysian and South East Asian economies grow.

The Forum is endorsed by MITI and SME Corp Malaysia and supported by various Chambers of Commerce across South East Asia. Some of the key speakers include:

  • Senator Dato’ Sri Idris Jala – Minister in the Prime Minister’s Department / Chief Executive Officer, The Performance Management & Delivery Unit (PEMANDU)
  • Datuk Dr Rebecca Fatima Sta Maria – Secretary General, Ministry of International Trade and Industry Malaysia
  • Mahdi Mohd Ariffin – Deputy CEO II, SME Corporation Malaysia
  • Datuk Wan Azhar Wan Ahmad – Chief Executive Officer, Credit Guarantee Corporation Malaysia Berhad
  • Guritno Kusumo – Ministry Secretary, The Ministry of Cooperatives and SMEs, The Republic of Indonesia
  • Gwendolyn F. Garcia – Governor of Cebu Province, The Philippines

Dennis & WilliamGoogle MalaysiaSenator Dato’ Sri Idris Jala – Minister in the Prime Minister’s Department

The event was organized by NASEBA in Prince Hotel, KL on 20-21th September 2011

Capitalizing on Growth Opportunity of a Malay Traditional Beauty and Health Supplement Company

Situation

An established Brand owner of more than 14 years providing wide range of skincare and health supplements of herbs and natural products, this client’s revenue had reached a plateau of RM7 million annually. The Founder believed that they were missing a potential growth opportunity. They came to CAPITAL with a request to assist in creating a growth plan for the company and to raise the necessary expansion capital to fund the plan.

Challenge

• Diversification of revenue
• Scalability of internal management capabilities
• Positioning the company to raise capital for its grow plan

Solution

Working with the Founder and the management team, CAPITAL developed a three-year growth plan for the business, to help them develop a growth strategy for their business and to build an infrastructure to drive and manage that growth (include both organic growth and acquisitions). CAPITAL then worked closely with the client to prepare the necessary presentation materials and develop the potential financial terms to fund the grow plan.

Also, by establishing a regular process for defining, obtaining, and evaluating key performance measures, this client was able to translate that information into critical knowledge that helped them better manage resources and drive growth.

Results

CAPITAL provided the client access to several high quality funding sources, as potential JV partners for the company. CAPITAL was also able to demonstrate the inherent value of the client’s balance sheet and ensure the JV partners were comfortable with the risk represented.

The ability to understand what works best and continue to replicate it, while eliminating those efforts that fail to work, has successfully grown the company from 5 retail outlets in Klang Valley to more than 30 outlets in less than two years, with substantial online present and e-commerce capability.

The company is now planning to offer its products to all state of Malaysia including Sabah and Sarawak, and is in the process of exporting to Thailand and Indonesia.

Performance Improvement for a Malaysia Healthy Drink Brand Owner that facing high sales growth but declining margins.

Situation:

A Bumiputra – owned company, manufacturing (OEM) and distribution of its own brand of a health drink that includes an exclusive blend of the mangosteen, with a secret formulation of non-traditional ingredients such as herbs, vitamins, minerals, amino acids, additional raw fruit or vegetable ingredients and other body-beneficial fruits, was experiencing high sales growth but declining margins and increased working capital consumption. They were in breach of covenants with their existing suppliers and had fully utilized their banking facilities.

Challenge:

Management reporting inadequate and untimely
Margin erosion and increasing overhead due to operational inefficiencies in order processing
Existing technology and processes not meeting changed business needs
Increased customer complaint due to long delays in dispatch of products
Stock not being managed including poor credit terms and inbound/outbound cost control
Creditability with financiers and creditors very low
Shortage of required skill-sets to run a high volume customer facing business.

Solution:

Implemented rolling monthly and yearly cash flow forecast and 3 way forecast model
Interim Finance Manager appointed to stabilize the cash flow and financial reporting of the business
Customer delivery issues addressed through sales and stock forecasts, improved dispatch efficiencies
Stakeholder management strategy to regain support of creditors including a payment plan
Sales mix and margins agreed to increase profitability cash flow
Technology improvements to meet business needs and enhancement of social media marketing.
HR plan put in place to bring the required skill sets into the business and implement tighter management processes to deliver operational efficiencies
Banker fully briefed on issues and actions being taken
Business model reviewed and overhead cost reductions identified.

Result:

Ongoing support from existing bbanks and financial Institutions and increase its credit limits.
Stakeholders including creditors and suppliers were carefully managed and remained supportive
Profitability of various marketing campaigns understood and return to margin management
Operational efficiencies lead to cost savings and improved customer experience
Improvement to working capital and cashflow management
Now consider exporting its products to neighbouring countries

Expansion Capital for a Design-Focus Web-Based Flash Sales Company to Further its Platform

Situation:

The company managed a flash sale website that serves as a platform to market and sell great design products to customers. Sales events are only open to invited members and membership is obtained through invitation from a member friend or direct from the site. Sales events are announced via email a week in advance and last 36 hours or until all items are sold out, whichever comes first. They came to CAPITAL with a request to assist in raising expansion capital to further develop this platform.

Challenge:

The company is a startup will a small revenue, the business model needs a lot of fine-tuning including its revenue model, profit margin model, operating model, working capital model as well as the financing model before it can really attracts serious investors.

Solution:

Working with the co-Founders, CAPITAL developed the business model, assisted in the creation of the presentation to potential investors, designed the financial terms of the offering and participated in investor pitching and, ultimately, worked closely with management in closing the transaction. CAPITAL continued working with the Board and potential investors in negotiating terms.

Results:

This client successfully raised RM500,000 from an angel investor in 6 months plus RM500,000 commited capital, which enabled the company to further develop its product, fund key marketing initiatives, and position themselves for the next wave of growth and strategic partnering opportunities.

New Brand Identity and a Dynamic Business Model for a Motorcycle Dealership

Situation:

A leading Motorcycle Dealership Business in Malaysia was looking to develop a Systemized Brand Identity, to upgrade their Sales Force management, to improve supply chain, and a better Financial Management System to cope with its growth.

Challenge:

To develop a Brand Identity, that works perfectly with its own sales force (mindset change), at the same time improving supply chain (bulk purchase), while having sufficient capital (cash flow) to sustain sales growth.

Solution:

We conducted a series of in-depth analysis, and invested our time to properly understand the business. We have concluded and designed the Holistic Motorcycle Ecosystem, and named it Motorpreneur Program. The Motorpreneur Program brought together the Brand, the Retail Showroom, the Sales Force, Centralized Supply Chain and the increase in Capital to fund growth.

Result:

Sales growth of almost 50% after the implementation of the new Program. Recruited more than 30 enterprising individuals to join the company’s sales force. Improve capital needed by the company by 25% to fund sales growth. Centralized Supply Chain reduces cost by almost 7%.

Growth Capital for a Malaysia Master Franchise of Soya Food and Beverage Products

Situation:

A group of young and enthusiastic individual has secured a master franchise from a Singapore-based leading soya bean food and beverage retailer to expand the presence of its brand in Malaysia. The first outlet was setup at the Curve with moderate sales. CAPITAL was appointed by the major shareholder to raise growth capital so that the brand continues to grow and franchisor–franchisee relations remain strong.

Challenge:

It has the strong potential to be the leading brand for soya bean products as the high market demands for consistent quality soya, with their modern soy offering, the company would be able to penetrate younger crowd. Nevertheless, these require time and effort in building up the brand value by adapting the right business model and customer value proposition to Malaysians.

Bank loan at this stage is not an option yet as it is a newly setup and the company’s shareholders were not in a position to infuse significant amounts of new equity capital into the business.

Solution:

CAPITAL worked with the key shareholder and management to strengthen the business plan and to prepare a financial model to analyze various scenarios on performance before preparing an investment package and approaching potential investors. Our roles:

Preparation of an “Investment Package” consists of investor’s deck, business proposal and presentations.
Approaching potential private equity investors.
Negotiation with investors of the key terms including valuation of the company.
Project management of the due diligence process.
Management of the documentation process.
Liaison between management and the private equity investor and
Driving all parties to achieve completion

The Result:

We obtained a detailed term sheet from a company investor that specialized in affiliates program within 3 months, providing RM500,000 growth capital, plus an attractive profit sharing scheme for management if certain sales targets were met. Of particular note, the company investor was willing to take a minority position, a highly unusual situation given the relatively early stage of the company.

Another plus was that the investor’s firm had extensive ties to the young community that could open doors for additional sales as well as new location and franchisee. The company is soon to open its new franchise outlets at Mid Valley, The Mine Shopping Mall and The Main Place at USJ. CAPITAL’S on-going role has been to work with management to implement the business plan and to continue to liaise with the investor group and management.

SME Loan and Government Incentive for Alloy Wheels Manufacturer to Setup Its New Plant

Situation:

The company is one of the leading alloy wheel manufacturers in Malaysia. Over the years the company had distinguished itself through its niche casting capabilities, quality record and long-standing customer relationships.

The company was awarded a large number of contracts with an automotive OEM and was in need of additional manufacturing capacity to support the launch of new products. In addition, the company was looking for end-market diversification in an effort to grow outside of its core segment.

Challenge:

The Company needed to raise additional capital to move to a new location to increase its manufacturing capacity, purchase new machinery and equipments and to fund the incremental working capital necessitated by the forecasted increase in revenue.

They had relationships with two local commercial banks; one relationship was 5 years old and the other 6 years old. Both banks turned down the company’s request for an increase in their working capital line and for a term loan of 5 years. The banks stated that the company’s business was stagnant for the past few years. In fact the bank the company had been with for 5 years stated that the company was fortunate to get a renewal of its present facility despite the fact that the company had been a very good customer, paying its obligations on time and always in compliance of its loan agreements

Solution:

Management agreed that we would approach other FIs for the working capital and seek term loan for renovation of the new factory according to its specification. With the strategy agreed upon, we put together a loan proposal on the company which discussed its history, products, management, historical performance and the new opportunity.

Result:

CAPITAL’s significant experience and relationships in the industry allowed us to quickly identify and approach a few Malaysia development banks to provide the necessary credit facilities and governmnet incentives to grow the company as planned:

  • SME Bank: RM 5.0 million term loan with 5% interest p.a. for the new factory and working capital.
  • MIDF: RM1.3 million to purchase machinery and equipments including furnace and robotic arms at 90% financing with 5% interest rate.
    AmBank: RM1.1 million to purchase a fully automatic paint line.
  • MIDA: Approval of Pioneer Status which enjoying 5 + 5 years of 100% tax exemption under SME category.

Recapitalization of a High-Technology Polymer Pipe Producer.

Situation:

Founded in 2004 and acquired the Malaysian Industrial Development Authority’s (MIDA) pioneer status recognition in early 2005 with 70% tax exemption for 5+5 years, the company is a leading producer of the most technically advanced polymer pipe (High Impact Resistant, Anti-Bacterial). The Founder was seeking liquidity for his investment and a financial partner to work with the management team to continue growing the business.

Challenge:

CAPITAL’s mandate was to recapitalize the business with financial partners to provide liquidity for the company’s founder, while preserving their ability to continue to participate as equity participants in the recapitalized company.

Solution:

Through the network CAPITAL had cultivated in the private equity / financial community we arranged several meetings with interested investors and bankers. The assignment included developing a detailed three year business plan and financial forecast.

Result:

CAPITAL structured a RM20 million recapitalization of The Company. The transaction structure enabled the founder to reinvest a portion of his proceeds in order to maintain over 51% ownership of the new company. Further, participation from the management team resulted in approximately 10% of the recapitalized company being owned by members of the existing management team.

CAPITAL managed the transaction from start to finish, successfully negotiating significant liquidity for the Company’s shareholders, while providing the company with a financial partner to fuel future growth.