Pitch Perfect: Eight Insights for an Effective Start-Up Company Pitch Deck

by Frederick Von Bryant II | Foley & Lardner LLP

Preparing an investor pitch deck is a task that most start-up companies encounter in the fund raising process. While almost all companies create investor pitch decks, many fail to do so effectively or with maximum impact. Founder teams often consider the pitch deck an afterthought to a company’s MVP (minimum viable product) or the beta version of its platform, for instance. But that is a huge mistake! Sharing a pitch deck with a potential investor can be a special opportunity to engage and connect with that person or group. Professional investors and funds receive 200+ pitch decks per month. It is critical to communicate effectively and concisely to stand out from the pack. Below are eight insights and considerations to keep in mind when formulating your pitch deck.
  1. Do not simply provide the size of your market and claim a percentage as your company’s anticipated market share. Investors are not impressed with this approach. Instead, connect the amount of investment you are seeking to the achievement of certain milestones, and describe how reaching those milestones will lead to an increase in valuation for your company. This approach answers at least two questions for the potential investor: “What are you going to do with my money?” and “How will that make the company more valuable?” When you simply say the market is X size and our company will claim Y share, these two key questions are not necessarily answered.
  1. The size of the company’s fundraise should coincide with the ‘runway’ needed to achieve milestones. Frequently start-ups will include significant milestones to be achieved three or more years out, yet the amount of money requested will only take them to year two. Investors want comfort that the current raise will bring the company to the next stage of development and/or valuation.
  1. Explain why your team can deliver. Often founder teams only include their respective headshots and positions at the company. Your “team” page of the pitch deck should also highlight relevant accomplishments and qualifications of the founders, particularly if any of the founders have experience running a successful company.
  1. Convey your competitive advantage. Investors do not want to invest in a company that can be beaten by competitors with money alone. If being the first mover in a space is your only competitive advantage – you better move fast! Competitive advantage can take many forms, including intellectual property rights (e.g. patents, know-how and trade-secrets) and strategic relationships. If your company will be successful because you’ve figured out how to do something better than anyone else – convey that! If the secret behind your venture is that one of your team members is friendly with a distributor that normally doesn’t work with early stage companies – convey that!
  1. Accurately define your customers – it’s not always as straightforward as you think! Many mobile app companies include number of users and downloads on a ‘customer slide’. However if revenues will come from advertisers – these are the ‘customers’ investors want to know about. For example, a life sciences company’s obvious customers are the end-user patients, but do not fail to address the ‘customers’ at the insurance provider and physician levels as well.
  1. Don’t Ignore Risk Factors. A start-up may not want to dampen the mood with what may go wrong. However, ignoring the obvious or the relevant will make you look unprepared in the eyes of the potential investor. For example, if you are pitching an ‘on-demand’ mobile app product, you should include a bullet point regarding the status of the workforce (i.e. currently there is a debate whether workers for companies like Uber and other ‘gig-economy’ businesses are independent contractors, employees or a hybrid of the two). Also identify existing competitors – if you are not the only game in town, better to let the investor know up front.
  1. Highlight Potential Exit Opportunities. Although your venture may be early in its life-cycle, providing a long-term perspective with potential exit strategies is something investors welcome. This answers the paramount question “How do I make money?” You tell the investors ‘how’ by describing the potential for a strategic merger or acquisition (identify potentially with whom), IPO or if your strategy is to become a large operating company.
  1. Cite your sources when possible. Citing sources adds credibility to the statistics and metrics in your pitch deck. Further, if your pitch includes relevant industry trends, providing sources that concur with your team’s perspective will only benefit you with potential investors.
Each introduction or opportunity to share your pitch deck is a chance to get funded. Investors are looking for a proven team, innovative idea, traction in the market, or a combination of all three. Make the most out of each chance by communicating effectively and answering the questions that matter most to potential investors – pitch perfect!

Originally published by JD Supra.

For help with the fundraising of your startup, reach me at danny@djimlaw.com.

Analysis of the Avatar Copyright Infringement Case

Analysis of Ryder v. Lightstorm Entertainment, Inc., et al. - California Court of Appeal, Second Appellate District, Division Eight, March 25, 2016
by Meg Charendoff, W. Allan Edmiston, David Grossman, Wook Hwang, Jonathan Neil Strauss
California Court of Appeal affirms summary judgment in favor of James Cameron and Lightstorm Entertainment in idea submission case, finding plaintiff unable to prove that defendants used any of plaintiff’s ideas in blockbuster motion picture “Avatar.”
Plaintiff Eric Ryder, author of the science fiction short story “KRZ 2068,” sued defendants James Cameron and Lightstorm Entertainment, a production company, alleging that the defendants fraudulently expressed interest in developing Ryder’s “KRZ” story, only to use elements of that story in the 2009 Cameron film “Avatar”. In his suit, Ryder alleged claims for (1) breach of fiduciary duty, (2) breach of express contract, (3) breach of implied contract, (4) promissory fraud, (5) fraud and deceit, and (6) negligent misrepresentation. The lower court granted defendants’ motion for summary judgment on all claims, finding that Ryder failed to create an inference that defendants had used his material, that Cameron had independently created “Avatar,” and that there were no triable issues of fact as to Ryder’s contract and fraud claims. Ryder appealed.
As the Court of Appeal outlines in its opinion, Cameron first conceived the “Avatar” story in 1995 and recorded the details of this story in a 102-page scriptment which was, for a time, circulated around Hollywood to generate interest. However, as Cameron determined that the technology available at the time would not allow him to make the film as he envisioned, he shelved the project until 2005. In 2005, Cameron revisited Avatar, drafted a screenplay and began principal photography in 2007.
Meanwhile, between 1996 and 1998, Ryder wrote his “KRZ” short story about a corporate investigator who is sent to the corporation’s mining operation on one of Jupiter’s moons to investigate the mysterious death of the mining foreman, only to become embroiled in a conspiracy-laden war between the corporate agents and the robotic humanoids that work in the mines. In 1998, seeking financing for his “KRZ” project, Ryder began distributing the story along with a proposal containing language that required the recipient to agree that the material was to remain confidential and that it would not be used for any purpose other than that for which it was intended. In early 2000, the “KRZ” materials found their way to Jay Sanders, a development executive at Lightstorm. Ryder and others, along with Lightstorm producers and executives, developed the “KRZ” project for a number of months. Though the length of this development period was disputed by the parties, there was eventually a final pitch meeting to top Lightstorm executives — a meeting that Cameron did not attend. Lightstorm passed on the “KRZ” project, and Ryder’s subsequent attempts to sell the project to other production companies were unsuccessful. “Avatar” was released in 2009. Ryder filed suit in 2011 against defendants, claiming they used his ideas from the “KRZ” project in “Avatar.”
In the Court of Appeal’s de novo review of the trial court’s grant of defendants’ motion for summary judgment, the court first examined Ryder’s claims for breach of fiduciary duty, breach of express contract and breach of implied contract. For each of these claims, the court determined, Ryder must prove that the defendants actually used his ideas in “Avatar.” If there is no direct evidence that the plaintiff’s ideas were used by defendants, use can be inferred by showing that the defendants had access to the plaintiff’s ideas and that the parties’ ideas are similar. Under the breach of fiduciary duty and breach of implied contract claims, the works must be shown to be substantially similar to raise an inference of use. For the breach of express contract claim, the level of similarity required to raise this inference depends on the language of the parties’ agreement.
While Ryder argued that the proposal attached to his “KRZ” submission (which the court assumed but did not rule created a binding contract between the parties) required that the parties’ ideas be something less than substantially similar, the court disagreed. The terms of the proposal prohibited the recipient from copying any of the “KRZ” material, “in whole or in part,” and the court found that the “in part” language did not mean that the defendants could not use any part of the “KRZ” material, “no matter how trivial or minor,” but rather, it mirrored the analysis of when “copying” occurs in copyright cases — an analysis that requires a showing, in part, of substantial similarity. To establish an inference that his material was used by defendants — a necessary element of his claims of breach of fiduciary duty, implied contract and express contract — Ryder was required to demonstrate that elements of Avatar are substantially similar to the ideas in his “KRZ” project.
Ryder proposed a number of allegedly similar elements between the two works, but the court disregarded all those elements that appeared in Cameron’s 1996 scriptment, as those elements logically could not have been used from Ryder’s material, which was created later. Ryder also argued that there were 12 ideas that were added to “Avatar” after the initial creation of Cameron’s scriptment. The court reviewed each of these alleged similarities, comparing the elements of both “Avatar” and “KRZ,” and found that there was no substantial similarity between the two works on any of these claimed elements. Noting that, where there is no substantial similarity between two works, a court may resolve the issue as a matter of law, the court held that Ryder could not establish an inference that defendants used his ideas as a matter of law. As the court reached this conclusion, there was no need to address the question of whether defendants had access to Ryder’s work. The court determined that the trial court properly granted summary judgment on Ryder’s claims for breach of fiduciary duty, breach of implied contract and breach of express contract.
Ryder also alleged that Lightstorm failed to inform him of the existing” Avatar” scriptment because it fraudulently intended to take Ryder’s ideas from “KRZ” in order to assist Cameron in his development of “Avatar.” Additionally, Ryder claimed that Lightstorm induced him to take “KRZ” off the market by falsely expressing an interest in developing the project. The court did not give much credence to these arguments, finding no evidence of any intentional misrepresentation or false promise, a necessary element for a fraud claim. Rather, the court pointed to the fact that Sanders, the development executive at Lightstorm, showed a sincere interest in the “KRZ” project when he continued to work with Ryder on developing it even after Sanders no longer worked at Lightstorm. Furthermore, the court found no evidence that Ryder suffered any harm from defendants’ allegedly fraudulent conduct, because not only did the defendants not use any of Ryder’s ideas, but also even if the alleged harm was keeping “KRZ” off the market while it was being developed by Lightstorm, Ryder offered no evidence that he missed any other development opportunities during that time, and the facts show that he had been unsuccessful for years in trying to sell the “KRZ” project. As the court found that Ryder could not prove these elements in any of his fraud claims, it held that summary judgment was properly granted on these causes of action.
The court also addressed two additional points. First, the court determined that, because Ryder failed to address his negligent misrepresentation claim on appeal, that claim was abandoned. Second, the court affirmed the trial court’s denial of Ryder’s motion for discovery sanctions because the documents at the center of the discovery dispute were related to questions of access and, as the court did not need to address that question in its review, it found that the motion was moot.
If your copyright has been infringed and you want to do something about it, received a cease and desist letter or you want to protect your copyright,reach me at danny@djimlaw.com or call me at (929) 322-DJIM(3546).


How New York Looks to Remedy Hollywood's Diversity Problem with Legislation

Legislation would provide incentives for TV shows to hire women and minority writers and directors

Originally published in Crain's New York.

Writers’ and directors’ unions are hoping the controversy at this year’s Academy Awards will push New York to tweak a tax credit to encourage diversity in the film and television industry.
A bill with a majority-party sponsor in both chambers of the state legislature would designate $5 million of the already allocated $420 million Empire State Film Production Tax Credit for incentives to television productions that hire female or minority writers or directors. It would be the first time a film state tax credit has included a diversity clause.
Intended to spur employment of rank-and-file writers and directors, the diversity tax credit would be capped at $50,000 per hire. The women and minorities hired must be qualified New York taxpayers, which the bill's backers say addresses the fact that most scripts of New York productions are being written out of state.
“We are quite confident that if passed, the bill would lead to the hiring of more storytellers—both writers and directors—who are women and/or people of color and build a much better, more diverse industry,” said Lowell Peterson, executive director of the Writers Guild of America.
The bill, first introduced in 2013, passed the Assembly last year but stalled in the Republican-controlled Senate. It is being carried by Assemblyman Keith Wright, D-Manhattan, and Sen. Kemp Hannon, R-Garden City, and would take effect 120 days after being signed by the governor, should it make it that far.
In addition to Peterson's union and the Directors Guild of America, various local unions including Theatrical Teamsters Local 817 and International Alliance of Theatrical Stage Employees (IATSE) Local 52, which represents theater and movie workers, support the bill.
“The entertainment industry has long struggled with the issue of diversity,” said Tom O’Donnell, president of Teamsters Local 817. “Any incentive that prods the industry in the right direction, the Teamsters support.”
In August 2015, the Directors Guild of America released a report analyzing the ethnicity and gender of directors hired for prime-time episodic television. Of more than 3,900 network episodes produced in 2014-15 and 270 scripted cable series in 2014, women directed just 16% of episodes, while minorities directed 18%, the latter a slight decrease from the prior year.
“Simply put, the hiring pipeline is broken across the entertainment industry,” said Neil Dudich, eastern executive director of the Directors Guild’s eastern wing. “New York has taken a leadership position in production incentives, and we look to the state to take a leading position on diversity.”
Peterson said the measure would bolster support for the broader film and tax credit, which the industry views as crucial to maintaining its level of activity in New York.“People have been quite critical of the entertainment industry and its lack of diversity,” he said. “This is a way for the industry to say, ‘Hey! We are doing something about it.’ ”
On the issue of shows produced in New York City but written by non-New Yorkers, the bill’s authors cite 15 prominent TV productions filmed in New York in 2008 that collectively employed 122 writers, only 24 who lived in New York. That number has remained stagnant for eight years, according to Writers Guild representatives.
“Some of these writers worked on scripts for shows such as Ugly Betty and Law & Order: Special Victims Unit, where the City of New York is a main character, without even visiting New York prior to writing an episode,” the bill sponsors wrote. “At the same time, many New Yorkers have found it impossible to maintain a career writing for television without leaving the state, uprooting their families and depriving the state of tax revenue.”
Earlier this year, the Writers Guild produced a YouTube video (see below) in support of the bill. It features several writers from shows including House of CardsThe Nightly Show with Larry Wilmore and Last Week Tonight with John Oliver who at one point in their career had to move to Los Angeles to gain employment in a writers room.
“The problem in New York state isn’t a lack of talent, it’s a lack of opportunity,” said Holly Walker, a writer for Wilmore's show.
Correction: Lowell Peterson is executive director of the Writers Guild of America. The organization's name was misstated in an earlier version of this article published online April 11, 2016.
 For advice on how to comply with the requirements of this and other production incentives, contact me here.


Glossary of Important Securities Regulation Terms and Definitions (Revision #2)

by Andrew Spacone 

This Glossary is designed to provide law students taking Securities Regulation with a tool that will assist them in learning the basic language of securities law and achieve a working knowledge of the fundamental principles and concepts which underlie securities regulation. The Glossary also may be useful to lawyers who are starting their practice in this area.
The Glossary it is not all inclusive, that is, it does not cover many of the more exotic and not-so exotic terms and definitions which make up securities law. Moreover, given the infinite complexity and evolving nature of federal securities law, the Glossary is a living document in the sense that, as the students move through the course, terms and definitions may need to be added, supplemented or even corrected. In this regard, any corrections or suggestions for improvement are welcomed. The Glossary also goes a step further than most other compendia by providing discussion and analysis which places the term or definition in context. In other words, how the terms relate to a fundamental principle or principles of securities law. In this sense, the Glossary may be redundant of other course materials, but repetition in this area of the law is a good thing...
Please see full Glossary Update below for more information.

Reposted from JDSupra.
For help understanding these terms and how they impact your business or startup, shoot me an email


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