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By Shantanu Mittal

I recently had the opportunity to participate in the Venture Capital Investment Competition organized by The Rotman School of Management. In this competition student teams played the roles of Venture Capitalists and had to evaluate two real business opportunities and negotiate a termsheet with one.

This was a great opportunity to sit on the other side of the table and analyze a business from a VCs point of view. Our team had to critically analyze the business plans, listen to the entrepreneurs pitches, carry out due diligence sessions and successfully negotiate the terms of a deal with the entrepreneur. Through this exercise, I was surprised to learn some things which at first seem counter intuitive for start-up businesses looking to raise money from investors

1. Forecasting large revenue projections for pre-revenue companies is an exercise in vain:

  • All companies forecast a ‘hockey stick’ revenue growth curve in hopes that when investors look at their projected growth, they will value them higher. In reality, investors rarely value a pre-revenue company based on its projected revenue (a method of valuation known as Discounted Cash Flow). Instead investors like to see a well thought out revenue model, in which growth is based on sound assumptions and a niche target market.

2. Don’t go to an investor if the only thing he or she can offer is money.

  • Money is certainly important to grow your business, but investors, especially VCs, can offer a lot more value to the company. For starters, find a VC who shares your enthusiasm for your business idea and has similar vision for the growth of the company. Also, look at what else the VC can offer in terms of networks and marketing or technical expertise. This can really speed up the growth of your company and help you find opportunities previously unavailable to you.

3. Don’t fight too hard to keep a very large share of your business.

  • All entrepreneurs want to keep control and a large portion of their business. But would you rather have 10% of a $1 million company or 100% of a company worth $0. Because, in reality, a pre-revenue company is essentially worth $0. VCs decide how much to invest for what percentage of the company by valuating the business based on various factors such as the management team, market growth and recent acquisitions or investments. It is important in the negotiation to understand the highest valuation the VC will go to, so you can get the best deal. You can also negotiate on other terms to maintain control, such as board structure and shareholders rights. Eventually it is a partnership, so you want to ensure that both parties are happy on signing the deal.

Well, my team managed to win 2nd place at the competition, beating out 6 other MBA teams.

Overall what I learned from this experience was this: Making a deal with a VC is like getting into a long-term relationship; there will be ups and downs, but both parties need to ensure they understand each other well enough to get through the tough times.

Shantanu Mittal is graduate student pursuing his Masters of Biotechnology from the University of Toronto Mississauga. He is currently the communications officer for the RIC Centre, a role which has helped him understand the world of entrepreneurship and business development. With his expertise in the life sciences and green technology sector, he has been able to provide valuable feedback to clients along with the entrepreneur-in-residence. Shantanu hopes to pursue a future in business development in the biotechnology or green technology industries.


The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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By Shantanu Mittal

It may not have Dragon Den’s fancy sets, but the companies, the investors and the money are equally as real.

‘The Pitch’ is a new weekly show on the Business News Network that aims to connect Canadian entrepreneurs with risk capitalists who are sitting on real money. Entrepreneurs have 90 seconds to pitch their company to a panel of investors and ask for capital to fund their idea. In addition, the show is filmed 100% live and gives the viewers a chance to see how entrepreneurs react in high pressure situations.

Andrew McNabb, CEO of MetaFLO Technologies had an opportunity present his technology at the show last week.

MetaFLO Technologies is an environmental technology company with a leading-edge treatment process for converting liquid waste to a solid. Andrew delivered a well-crafted pitch and his grasp of the company’s value proposition and business model quickly impressed the panel of investors. The panel, consisting of Rick Nathan, Managing Director of Kensington Capital Partners; John Varghese, CEO of VentureLink Group of Funds and Brian Kobus, Senior Associate of Summerhill Venture Partners, were all intrigued by MetaFlo’s Technology and unanimously agreed that they would be interested in talking further.

Andrew has been a client with the RIC Centre for about a year and has worked closely with our Entrepreneur-in-Residence, David Pasieka in developing MetaFLO’s business strategy and investor presentation. Andrew and his fellow colleagues at MetaFLO have also attended and actively participated in RIC Centre’s Growing Your Business seminars and workshops.

Watch the full show at The Pitch.

Shantanu Mittal is graduate student pursuing his Masters of Biotechnology from the University of Toronto Mississauga. He is currently the communications officer for the RIC Centre, a role which has helped him understand the world of entrepreneurship and business development. With his expertise in the life sciences and green technology sector, he has been able to provide valuable feedback to clients along with the entrepreneur-in-residence. Shantanu hopes to pursue a future in business development in the biotechnology or green technology industries.


The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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By Shantanu Mittal

All successful businesses have one thing in common; they have a clearly defined value proposition. But what constitute a good value proposition? Do you think that Google would have been so successful had its value proposition been “Google uses a patented page-ranking algorithm to make money through ad placement” instead of its current “The world’s largest search engine that allows internet users to find relevant information quickly and easily” (Source: Google)?

So how can you as an entrepreneur create your perfect value proposition? Well, here are some tips and resources to help.

Components of a value proposition: there are 3 key parts of a value proposition:

a.       Target Customer

b.      Customer Problem

c.       Product or Solution

A well written value proposition connects all these 3 together in one or two simple sentences. Here are some resources to help you identify these three key parts.

1)      A-Day-in-the-life Scenario: This technique helps you identify your target customer and the customer problem. Imagine that you are the ideal customer for your product – what would your regular day be like, what problems or stresses are you under and what are its economic consequences. Then you overlay the enabling factors of your product and see if they can solve the problems and lead to economic benefit.

2)     Strategy Canvas: This is a powerful exercise to help you identify your competitors to see how you can differentiate yourself (see example for Southwest Airline in Fig 1). Think of all the factors that consumers consider when buying a product or service in your market. Plot these factors along the horizontal axis of your strategy canvas and then rank yourself high, medium or low compared to your competitors for that factor. This exercise shows you in a very visual way where you differ from your competition and these unique factors that your customers are looking for are what you should be including in your value proposition.

3)     Buyer Utility Grid: This is a useful exercise in trying to determine at what point in your product’s life cycle  you can add value. The columns on the grid represent the different phases of your product’s life cycle and rows represent common value-add factors that consumers are looking for. If you are struggling to find ways to differentiate yourself from your competitors, I would encourage you to go through this exercise to see how your ‘whole product’ (core product + services and ancillary products) can give you new competitor advantages.

All these exercises were included as part of working group activities by entrepreneurs in a workshop organized by RIC Centre in partnership with the Business Mentorship and Entrepreneurship Program based at the MaRS Discovery District. This workshop, facilitated by Joseph Wilson and Jon Worren from MaRS, was highly engaging and all the invited entrepreneurs who attended this session were able to write and share a concise value proposition for their company by its conclusion.

Sheldon Joseph from Rejuven8 said that he found the interactive nature of this workshop very useful and added that “I’m writing an executive summary [of my business] as we speak”. The next workshops will cover business models.

**Disclaimer

All information for this blog was taken from content discussed at the “RIC workshop series: Designing a Value Proposition”, courtesy of Jon Worren and Joseph Wilson. The models and activities can be found in the ‘Entrepreneurs Toolkit – Market Strategy Workbooks’ designed by the Business Mentorship and Entrepreneurship Program.

Shantanu Mittal is graduate student pursuing his Masters of Biotechnology from the University of Toronto Mississauga. He is currently the communications officer for the RIC Centre, a role which has helped him understand the world of entrepreneurship and business development. With his expertise in the life sciences and green technology sector, he has been able to provide valuable feedback to clients along with the entrepreneur-in-residence. Shantanu hopes to pursue a future in business development in the biotechnology or green technology industries.


The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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By Shantanu Mittal

“It is not the strongest of the species who survive, nor the most intelligent, but the one most responsive to change” – Charles Darwin

This was the quote that Steven Burrill used to end his talk on his state-of-the-industry address at the BIO 2010 convention. He was of course referring to the imminent need for biotechnology companies to adapt to the fast changing financial, political and regulatory environment in which they operate.

The biotechnology industry inherently suffers from extremely long product development cycles (10-15 years) and high capital requirements (over $1 billion), making it one of the toughest industries to operate in.

But my experience at the BIO convention, held in Chicago last week, showed me that this industry is far from the decline stage. With more than 15,000 people from all over the world attended. BIO is this industry’s largest gathering.  This year, the key words on everyone’s lips were innovation and change. Burrill mentioned that the economic downturn hit all industries, but the biotech industry has emerged stronger than all the other industries due to its ability to innovate. And indeed, innovation was clearly present across all the pavilions at BIO. Some notable Canadian innovations showcased at BIO were Spartan Biosciences DX-12 PCR, a smaller, faster DNA analyser that is ideal to use in laboratories and Oncogenex Technologies that won the BIOTECanada gold leaf award for the company of the year for their novel cancer therapeutics.

A lot of debate was also focused on the growth of the emerging countries, India and China and the opportunity and challenges they provide to this ‘western’ dominated industry. The rising population and the higher per-capita income of these economies provide a vast market for the biotechnology industry. The new technologies and innovations coming out of these countries have forced many well-established companies to turn their head and focus on these emerging markets as equals in this rapidly changing industry.

Walking about the exhibition hall at BIO and seeing the size of the India and China booths, it was very clear that these countries are doing a lot to promote their biotechnology sector.

Heal. Fuel. Feed the world. This is the only industry that is capable of achieving these essential goals and that was the promise that the BIO convention is working towards.

Shantanu Mittal is graduate student pursuing his Masters of Biotechnology from the University of Toronto Mississauga. He is currently the communications officer for the RIC Centre, a role which has helped him understand the world of entrepreneurship and business development. With his expertise in the life sciences and green technology sector, he has been able to provide valuable feedback to clients along with the entrepreneur-in-residence. Shantanu hopes to pursue a future in business development in the biotechnology or green technology industries.

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