InternSource VC Pitch

Editor's Notes

• #2: Introduce the teamTogether we are affectionately referred to as the 5 J’s.Our company is InternSource.
• #3: InternSource is a transparency-driven community that brings together the best interns and those companies who provide them with the highest quality opportunities.Our executive team rallied around our internship solution because of the decades of pain we experienced as a result of the existing inadequate services. Many of us run our own small businesses. We would have loved to be able to take advantage of the inexpensive labor force that interns embody.However, with no effective and efficient way to ascertain a potential interns capabilities, how can we trust that they will be able to appropriately represent the Brands that we had worked so hard to build? Those of us who work for large multi-nationals, understand how critical it is to find and hire the rising-stars, before they even graduate. But how do you attract and sort through the 10 million students in order to identify who the rising-stars are?On the flip-side, as a grad student, I had aspirations to work for a Top-4 Management Consulting Firm.Unfortunately, I had no way of demonstrating to them, that although I attending Santa Clara University, I was every bit as capable (or more so) than the applicants from Stanford.
• #4: Our executive team bonded together throughout our program, because our successful working relationships demonstrated our ability to thrive together, even under the most trying of circumstances. We all understood the importance of group cohesion, company culture, and fit; and our previous experiences as a team lead us to believe we will be able to overcome the myriad of obstacles that confront new ventures. Not only will be pulling from our own backgrounds, but our exciting internship solution has garnered the support of a wise and experienced Advisory Board. I’d like to point out that there are two potential members who are not yet on this list as we are finalizing their commitments. One comes from the field of Human Resources, the other from University Career Centers.
• #5: In the United States, there are 10 million students attending undergraduate and graduate programs. In order to gain real-world experience, students served 3,600,000 internships last year. That number grew by 8.5% from the previous year, and expected to continue growing for the near future at that rate. Let’s look at why…(From 2000-2010 there was a 50% increase in MBA’s. Undergraduate admissions during the same time frame increased 37% .http://nces.ed.gov/programs/coe/indicator_gfs.asphttp://nces.ed.gov/programs/coe/indicator_gfs.asp )
• #6: For Students, Internships provide real-world experiences that serve to do 3 things:Build necessary skills that will be needed throughout their careers.Confirm or invalidate career choices. This is an often overlooked, but extremely valuable aspect of internships. Take Jeanne as an example. As an undergrad, she started off as a Journalism major. However after holding a journalism internship, she realized this was not the career for her. She switched her major to Marketing, but after holding an internship in that field, again realized that she was unsatisfied by her career selection. Finally she changed her major again, but this time to Supply Chain Management. After holding an internship in this field, she realized that she had found a career she would love. Her internships allowed her to save decades of anguish created from an unsatisfying career in Journalism or Marketing. Furthermore, she was able to recognize that, while still taking courses, thus enabling her to shift course-work midstream.Research conducted by NACE (National Association of Colleges and Employers) indicates that it is not just important to hold an internship, but rather what is important is the quality of internship experience that the student had. Furthermore, they point out a correlation between the quality of internship opportunity and a company’s willingness to pay the student for their work. In other words companies with the best internship programs are also using salaries to attract the top talent. Yet it is these programs that are most fiercely competed for by students.On the other side, Companies are realizing that their ability to compete in their industries rests on the capabilities of their human capital. As a result, companies are competing harder and harder for top talent. One strategy they are employing is the use of strong Internship Programs, whereby companies attract rising-stars with the hopes that the intern will accept their permanent job offer upon graduation. This of course assumes that the candidate demonstrated both the technical ability and cultural fit required for the position, throughout her internship. Hence companies are using internships in order to attract and further evaluate students. But there are 2 challenges that they face:All of the top companies are using this strategy, so how do they stand out?How do these companies identify who the rising-stars are? With so many student applicants to sift through, they are forced to use proxies of talent to narrow the field (i.e. University brand, and GPA). The problem is these proxies are inadequate. First of all, many brilliant students avoid top-tier schools because of limited access to top professors. Second, even within the same university, some students pad their GPAs with fluff courses and professors with easy grading systems. Ideally, companies would interview every applicant, however that simply isn’t cost effective, nor practical. If only there were a better way…
• #7: Currently, due to the inadequecies of the internship sourcing industry, companies and students are having to use cobbled together solutions to address the discovery and fit elements of filling internships. While all of these mediums in the chart can fill the purpose of discovery (both students discovering internship opportunities, and companies discovering the students to fill them), only Networking, Social Networking, and to a minor degree Career Fairs address the element of fit. In other words, students and companies use referrals to indicate whether the student-company match will be successful.
• #8: When we look at the competitive landscape, we notice that both the pure-plays and adjacents offer the standard offerings. Students receive resume tutorials, the ability to search for available internships, and apply for them through the site. Companies receive the ability to post internship opportunities and sometimes are able to sort through student profiles to solicit applicants.However there are 2 critical elements that incumbents in the space are overlooking. -click-Transparency – While students and companies can find each other on these sites, they have no idea who they are about to get involved with. As a result:Students waste precious summers printing and binding reports, and making coffee runs to Starbucks. Likewise, companies who value top-talent interns are forced into extensive and costly interviewing processes.
• #9: The second element that incumbents are overlooking is the value that exists with Universities. Most players in the space, write-off Universities because of the difficulties monetizing them. Between the budgetary constraints, insane bureaucracy, and lengthy sales cycles, monetizing Universities truly is a futile strategy. However, if properly partnered with, Universities can serve as a powerful channel to the students, enabling rapid scaling of the student user-base. But more on that in a moment.
• #10: Currently, incumbents in the space use the same model that is used in the professional job sourcing industry. Think of Monster, Hotjobs, etc. This model fails to fill the needs of the students and companies for 3 reasons:The internship experience is educational by nature. Students are using internships to gain the real-world experience that they lack.Because of this lack of experience, the optics into a students capabilities are blurred. In the professional job market, companies use work experience as a proxy for a candidates capabilities. When sorting through internship candidates, companies are forced to use the inadequate proxies of university brand and GPA. As a result, companies such as Apple sift through hundreds of resumes to find 20 candidates to interview, only 2 of which will fill an internship. Of those two, only 1 will become a full-time hire upon graduation. While this process is necessary for cultivating Apple’s growing capabilities, it is extremely time consuming and expensive. On the other side, students lack the ability to see which companies offer the best internship opportunities. With the exception of leveraging their networks, the tools that professionals use to evaluate job satisfaction, simply don’t exist in the internship space.Universities are earnestly trying to be part of the solution. Our research of Universities revealed that Career Services departments want to not only help their students discover and land quality jobs and internships, but they also want to help businesses in their communities to develop internship programs that will provide their students with much needed experience.At InternSource, we’ve developed a solution that addresses these issues.
• #11: Our solution is to create a transparent community that brings together the best students and the companies who provide them with the highest quality opportunities. To do this we are developing a series of educational modules that will help students build skills that will help them secure and thrive in their internships. These modules will help students develop both soft and technical skill sets. And by allowing students to take tests to prove their proficiencies in the various subject matters, we are able to award badges that attest to their capabilities. Hence, students benefit by not only being able to gain much-needed skills, but they can differentiate themselves by obtaining badges for their proficiencies.Likewise, Universities benefit from these services in 2 ways. First, they can outsource the teaching of basic skills (i.e. Resume Writing, Interview Prep, etc.). Second, by using our modules and badging system as a gate to personalized services, Universities can focus their scarce resources on providing services such as resume critiques, interview dry-runs, and career fairs.Companies benefit from this feature by being able to identify rising-star candidates, as well as gauge each candidates passions. This will save them both time and money.
• #12: On the company side, we plan to create a feedback mechanism whereby students can rate and comment on their internship experiences that they just filled. By allowing students to choose whether or not their ratings are anonymous, we will be able to achieve significant participation rates as well as ensure honest feedback.Students will benefit from their peers’ feedback because of the insights they will gain regarding the company’s internship opportunities. Companies will benefit from this feature, because they will be able to use the feedback to improve their Internship Programs, thereby increasing their capability to convert rising-star interns into full-time professionals upon graduation. Furthermore, as their internship ratings increase, they will be able to attract more top-talent from the Universities.
• #13: In order to bring theInternSource solution to market, we will need to be able to build upon the following capabilities. This will be achieved through a combination of hiring consultants for the course-related material, as well as qualified programmers for the database and website.
• #14: When building our course catalog, we plan to roll-out the modules in 3 phases. This will allow us to Go-To-Market more quickly, while also enabling us to identify and further develop hot-topics. You will notice that many of the modules in Phase 1 are directed towards addressing the needs of University Career Centers. This is intended to support our University Partnership Program and drive student acquisitions.
• #15: In order evaluate the viability of our business, we had to ascertain which features students and businesses were willing to pay for, and how much they were willing to pay. We conducted primary research on students from across the country, and discovered that the highest revenue levels were achieved through targeting the 9% of students who exhibited a Willingness-to-Pay $100 for our bundled servicesFor enterprises, our research revealed that approximately 18% were willing to pay $100 per listing for quality interns. While our financial models only include this bifurcated revenue stream, we have identified potential sources of revenue that will be explored further, once appropriate scaling has been achieved.
• #16: Our business model allows us to monitor a set of Key Performance Indicators that will allow us to anticipate our ability to reach revenue milestones. First as Universities represent a critical channel for student acquisition, the number of University Partnerships will be incentivized and very closely monitored. Second, the freemium registrations and conversion rates to paid subscriptions will also be monitored. We will be using website analytics to identify which service offerings (modules) are most effective at inducing conversions. And finally, our Enterprise Direct Sales Force will be incentivized and monitored to ensure that company listings meet or exceed our targets.
• #17: In order to ensure high levels of effectiveness for our marketing and sales efforts, we plan to expand in a well-coordinated manner. The University and Enterprise Direct Sales Forces will focus on establishing footprints in the same geographic areas at the same time. So initially we will establish a presence in the Bay Area, expanding through California and the Western Region. Then we will target the Eastern Region, followed by the Central States.
• #18: In order to build the site and invest in the necessary sales and marketing, we are looking to raise a mere $1.6 million from the Band of Angels. According to our forecasts, a harvest after Year 6 will yield our Angels a 10X return. Can we count on your support?Y6 Harvest based on 5.7x EBITDA Multiplier 10X
• #23: Course – Test – Badge – Search – Analyze - Apply – Interview – Hire – Internship – FeedbackLearn – Discovery – Onboarding – Internship - Feedback
• #25: PROOFFragmented competition:Largest competitor has 3% market share INSERT CHART OF HOW STUDENTS FOUND INTERNSHIPS
• #26: PROOFFragmented competition:Largest competitor has 3% market share INSERT CHART OF HOW STUDENTS FOUND INTERNSHIPS