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Jerry_Schaufeld_presentation

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  • 1. New Ventures …. Improving the Probability of Success and Angel Investing Swiss Venture Leaders June 2008 Jerry Schaufeld
  • 2. The Challenges…..
    • We are confronted by a new business construct characterized by Tom Freidman’s “Flat World” conceptual framework.
    • The issues are global and include environmental, energy, medicine, health care, food and economic growth….. to start.
    Swiss Venture Leaders June 2008
  • 3. We are we doing…..?
    • In the US we had the advantages of “endless” resources and ability to consume….
    • Today we have reached limits in our….
      • ability to compete in the production of goods
      • availability of resources
      • understanding of the environmental penalties of all the above.
      • establishment of necessary engineering talent
    Swiss Venture Leaders June 2008
  • 4. And yet…….
    • We put a man on the moon, invented the microcircuit, Post Its and the I-Pod.
    • We are betting on the strength of Innovation and Entrepreneurship in order to look forward.
      • Innovation deals with the process from idea recognition to empowerment and commercialization.
      • Entrepreneurship deals with the area of risk mitigation through understanding business fundamentals as applied to opportunities.
    Swiss Venture Leaders June 2008
  • 5. How does this relate to you?
    • Within the realm of entrepreneurship there are a multitude of hopeful options.
    • Your projects seem exciting and challenging; how can we increase the probability of your success?
    • Is there perhaps another vantage?
    Swiss Venture Leaders June 2008
  • 6. Positioning …
    • Change is the constant of high growth technology based companies.
    • To achieve success in that environment it helps to know where you are in the company life cycle.
    • Understanding that requires a look at the basics of the business cycle ...
    Swiss Venture Leaders June 2008
  • 7. Commercialization Cycle… Swiss Venture Leaders June 2008 Money/ Cash flow ($) Time Sources
    • R & D
    • Invention
    • Mkt. Oppty.
    • Idea
    • LBO
    • M & A
    • Turnaround
    • Other…
    Decision to commercialize Series “A” event (Venture, Institutional Capital, JV, etc.) $ Subsequent Rounds (Traditional) “ FFF” (Today) ? Angel Visionary Funding Professional (other peoples money) funding
  • 8. Implications of Commercialization Phases… (clue – its always changing)! Swiss Venture Leaders June 2008 Pre-Investment Early Stage Series A Subsequent Investment Friends and family, Grants (SBIR,STTR) Angel, Suppliers, poss. joint ventures Series “A”, Angel re-up, Venture Capital Banks, mezzanine, investment bankers Management Informal Teams Management Org. Structure Committees, Metrics Governance Advisors First Board of Directors, Angel directors BOD w/ Committees and Outsiders, VC Board Larger and more formal
  • 9. Implications by function… Swiss Venture Leaders June 2008 Pre-Investment Early Stage Series A Subsequent Management Informal Teams Management . Structure Committees, Metrics Accounting System Excel Quick books ERM, CRM, MIS Consolidated Accounting People You and me P/T CFO CFO (HBS?) (teams) Treasurer Sales Org none Focused sales by all Teams, Reps Multinational Sales People See above Senior mgt. Sales manager Professionals Operations none All hands Teams Structure, procedures Ops people See above First COO Integrated mfg. Outsourcing Marketing Primitive, assumptions Verification Formal, trade shows Consultants, global Marketing People Advisors Part time CMO Trade shows, literature Professionals Technology Primitive, R & D Baling wire, but working Tooling, rev control Automation, China? Tech People MIT/ WPI types?? Teams Labs, R&D mgt Vice Presidents Admin none Office manager Formal Organization Vice Presidents Admin People See above Small staff (teams) HR, Purchasing Vice Presidents
  • 10. What is the “take away” ???
    • There are no “secrets”!
    • Success lies in the fundamentals (tabs) of the Business Plan. They include:
    Swiss Venture Leaders June 2008
    • Business objective
    • Management
    • Markets
    • Financials (I/S, B/S, C/F)
    • Sales /Revenue Generation
    • Exit Strategy
    • Technology/ IP
    • Competitive Advantage
  • 11. Your Questions…
    • "If you already have sales, how do you balance growing through revenues and growing through financing? Should you slow down the company development and become more cautious, if sales are not picking up as quickly as expected, or should you anyway go for a fast growth of the company i.e. the original plan? Which way is more sustainable?“
    • How do you construct the board of directors? How many people should be on it? Is it better to have your professor (the scientific advisor) in a separate board such as the advisory board? So basically my general question is how you construct the various board of a start up, and what to avoid?
    Swiss Venture Leaders June 2008
  • 12. Your Questions (cont.)…
    • I've always been told that it's good to promote your employee with an ESOP. Now concretely, how does it really work? Take this concrete "Swiss" example.
      • I have "toto SA" which has a capital of 100'000CHF with 1M shares at 0.10CHF each. If we assign 15% for the ESOP, this gives 150'000 shares. Now how do you give them among the various employees? How many a month?
    • Can the speaker go over the various shares you have when you let an investor in, and what are the constraints/advantages with each one?
    Swiss Venture Leaders June 2008
  • 13.
    • Good Hunting……
    Swiss Venture Leaders June 2008

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