Due Diligence - Can you dress it up to take it out?

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  • 1. Dress Your Business Up To Be Taken Out By Greg Waite
  • 2. Your Business as seen by You
  • 3. As seen by a Banker
  • 4. As seen by a Buyer
  • 5. As seen by an Investor
  • 6. As seen by a Tax Assessor
  • 7. What’s Your Future
    • Only 1 to 2% of companies will go public
    • 98% will get taken out
      • To the scrap yard
      • Or by acquisition
  • 8. Diligence
    • Yours versus Theirs
    • Yours
      • Everyday – Operating/Tactical/Strategic
      • Pre-sale Diligence
        • They can’t value what they can’t see
    • Theirs
      • Post-sale Diligence
        • Looking for bullets, bombs and black holes
  • 9. Group Challenge
    • What are your primary assets?
  • 10. Primary Assets for Tech
    • Intangible Assets
      • IAM
        • Human Capital
        • Intellectual Assets
  • 11. Focus On Intellectual Asset Management
    • Run a Great Business
    • Look at everything you do in terms of
      • Operations
      • Tactics
      • Strategies
    • Monetize your assets
  • 12. Operating Benefits of IAM
    • Easily
      • Finding things, facilitating transactions, getting the right answers quickly
        • facilitate meetings, decisions etc.
        • finding and executing employment or contractor agreements
        • knowing when a license is up for renewal
        • knowing who did a specific piece of work 3 years ago
        • showing proof documentation for SRED
  • 13. Tactical Benefits of IAM
    • Exploiting some assets for barter, cross licensing or some kind of monetization (brand visibility)
      • Examples
        • selling a component of code to provide cash flow and visibility
        • networking in your community and bartering/cross licensing non-core assets with members
        • providing a value component for free (perhaps open source) to garner brand awareness
        • having specialized legal agreements that expedite turnkey deals (maybe strategic)
  • 14. Strategic Benefits of IAM
    • A longer term business purpose
      • aligning intellectual assets and human capital towards products and services that fulfill the needs/wants of specific markets/segments and purposes (pain and or gain).
        • Positioning as # 1 or 2 in Space (Barrier Strategy)
          • Branding Strategy
          • Business Model
          • Patent Block
  • 15. Intellectual Asset Management
    • What Is it
    • Why is it Important
    • When is it Important
    • What are the Benefits
    • Who Can Facilitate it
    • What Would it Involve
  • 16. What Is It
    • Documenting and monitoring your intellectual assets
      • (measure, mentor, manage)
        • What are they, what do they do
        • Who created them
        • Who owns them
        • How are they protected
        • What agreements are related to them
        • How do they relate to products, services, R&D programs
  • 17. What Are IA’s
    • Myth – it’s not just about Patents
      • In fact, for most companies Patents will represent none or only a small portion of value
    • An Intellectual Asset is anything that you have created that provides some measure of value or uniqueness to your business (or others)
  • 18. Group Challenge
    • Brainstorm on Intellectual Assets
  • 19. Examples of IA and IP
    • Ideas
    • Invention
    • Unique Business Knowhow
    • Customer Relationships and Information
    • Logos
    • Brands
    • Domain Names
    • Software
    • Web Site(s)
    • Landing Pages
    • Brochures
    • Concepts
    • What you’ve learned (captureinternal expertise)
    • Advisors, Employees/Consultants
      • Special Skills, Unique Competency, Relationships
    • Competitive assessments
    • Repurposing products for other segments
    • Awards, Testimonials, Case Studies (PR)
    • Testing Frameworks Apparatus, Materials
    • Strategies
      • Monetization Strategies
    • White Papers
    • Publications (where are you published)
      • wikipedia
    • Policies
    • Procedures/Processes
    • Specialty Agreements
    • Business Plans
    • Pre-planned Product Improvements
    • Competitive Analysis
    • Analytics (web, discovery, research)
    • Licensing in opportunities
    • Customer conduits (monetizing communities and relationships)
    • Key Word Analysis
    • Adoption Curve Analysis
    • Innovation Curve Analysis
    • Business on a Page
  • 20. IP verus IA
    • Formal IP is different from IA
    • Formal IP rights
      • Patents
      • Trademarks
      • Copyright
      • Industrial Design
      • Trade Secret
      • Domains (lite IPR rights)
  • 21. Group Challenge
    • Poll Audience on IP Knowledge
    • David to Quickly Cover Some Basics Such As
      • Patent vs. Trade Secret
      • Software and Business Method Patents
      • How to Keep a Secret Secret
      • First to file vs. first to invent
      • Domain vs. Trademark
      • Registered versus not Registered (Copyright and TM’s)
      • Important Jurisdiction Considerations
  • 22. IA’s versus IP
    • It’s only IP if it has IPR and/or you proactively protect it
    • IA’s don’t have to be protected to have value but it is best to protect them to “preserve value” & “certify ownership”
  • 23. Why Is IAM so Important? Valuation !
    • 60% to 99% of a company is based on intangibles, intellectual assets and human capital
    • the primary value is “off the balance sheet” – not tracked by your accounting system
      • Even in Steel and Oil and Gas companies the winners are all about innovation and inventiveness
        • Repurposed Steel, Tar Sands Extraction
      • TIP - Spend at least 10% of your “accounting time” on intellectual assets.
  • 24. Why Is IAM so Important? Corporate Memory
    • Knowledge and IA walks in most companies
    • Imagine a Store where 20% of the inventory shrinks every year
      • Minimally that is what happens to intellectual assets
      • Lost information on a portion of a prototype could end up being a wall
    • Transition Costs
  • 25. Why Is IAM so Important? Time Burner
    • Re-invent Re-create
    • Where is it
    • Who did it
    • Why did they do it that way
    • What was learned
    • How does it relate to other assets
    • * Payroll is the highest cost
  • 26. Why Is IAM so Important? Examples
    • Planned Product Features and Prototypes
      • When a CTO leaves can you find these
    • Market Research
      • When a Marketing Manager leaves can you find his or her research
    • Competitive Analysis
      • When a Product Manager or Mkt Manager leaves can you find competitive analysis
    • Agreements
      • Can you readily find contracts, licenses, confidentiality agreements
    • Key Dates
      • Can you find or are you notified on key dates, renewals, expiries etc.
  • 27. Group Challenge
    • Monetize “Them There Assets"
      • Google
      • @Home
    • Strategic Innovation
      • Dell
    • Repurposed Innovation
      • Dofasco
    • Competitive Innovation
      • Suncor
    • Unfocused Innovation
      • Polaroid
  • 28. Why is IAM So Important? IP Has “Legal and Monetary” Teeth
  • 29. Why Is IAM so Important? Time Burner & The BIG Ugly
    • Big Events like Funding or Prospective Acquisition
      • Shoe box versus a System
      • Dressed to Sell?
        • Complete
        • Transparent
      • Do You Have the Time to Dress Up
  • 30. Think Like an Investor
    • Investments Analogy
      • Compare
        • Management
        • Innovativeness
        • Markets
    • Are you demonstrating “management” around the most important asset class in your business?
    • How can they know what you don’t show?
    • If you don’t value it how can they?
    • Can you communicate how assets translate into product service revenue streams?
  • 31. TIP on Preparing for Their DD
    • Check off your capacity to complete DD with ease
    • Show Gowlings
  • 32. Some Examples - Your DD Investing in the Right Assets?
    • Market/Customer Centric
    • Watch the Innovation Curve !!!!
      • Are you investing in areas that customers or markets care about
      • Many companies invest time and effort in meaningless features
        • People only use 5 to 10% of a software feature set yet software companies over innovate and add new features instead of increasing the usability of existing ones
      • Many companies invent outside of their core
  • 33. Some Examples – Your DD Licensing-In
    • Innovate for Competitive Edge
    • License-in for speed and non-core capabilities
    • Understand you strengths and limitations
  • 34. Some Examples – Your DD Competitive Analysis
    • Grow UP & Compete !
      • This is an asset not a liability
      • What you can’t see and what you don’t show will kill you.
    • Understand the Innovation Curve of your market(s)
  • 35. Group Challenge - Competition
    • What do you need to know?
    • Beyond their DD, Your DD
  • 36. Your DD Competitive Analysis – Score Card
  • 37. Your DD Competitive Analysis – Score Card
  • 38. Your DD Competitive Analysis – Score Card
  • 39. Competitive Analysis – Score Card
  • 40. Competitive Analysis – Keeping Watch
    • Find an Efficient Process
      • We Use Copernic to Email Web Site Page Changes or Additions
      • Capture in Category within FuseTalk Discussion Forum
  • 41. Group Challenge : New Features
    • Brainstorm - How do You Evaluate New Features?
  • 42. New Features
  • 43. New Features
  • 44. Group Challenge : Market Segments
    • Quick Triage on Market Segments
  • 45. Your DD Market Segments
  • 46. Group Challenge – Product Strategy Repurposing
    • Brainstorm – What criteria could you use to evaluate the potential of repurposing or repositioning an asset/product/service
  • 47. Your DD Product Strategy Repurposing
  • 48. Group Challenge – Your Visibility
    • Brainstorm – If Brand = Value plus Visibility, how do you demonstrate that you are or can be Visible?
  • 49. Your DD Visibility
    • Keyword Analysis
    • Hub and Spoke Marketing
    • Discussion Forums, Blogs, Wiki’s & Directories
    • Press Releases
    • Awards
    • Your Own Publications with RSS Feeds
  • 50. Your DD Visibility
    • Web Statistics
      • Traffic
      • Rankings
      • Popularity
      • Stickiness
      • Return Visits etc.
  • 51. Your DD It All Starts With Discovery
    • Build up the inventory
      • what has been created, by whom, when, what does it do, is it protected
    • Classify it
      • Is it software, an idea, a trademark, a new feature, a strategy
    • Organize it
      • High versus value, competitive advantage, outside of competancy, why did we do this
  • 52. Consider a Standard Process
    • All Assets Go Through a Systematic Review
      • Pool and Parse
        • Portolios, Micro(subset), As Is
      • Evaluate
        • Finance : SRED/OIDMTC
        • Legal : IP Assessment
        • Marketing : Commercialization, New Segments, Comp Edge, Opp for new Partners etc.
        • Promotion : Can you spin PR here?
        • Licensing : Cross License License Out Non Compete Opps
        • Relationships : Can you target new or existing customer to adopt technology
  • 53. Your DD and Their DD Gems and Black Holes or Bombs
    • Gems
      • Typically will find a few assets that are
        • not well known but are key differentiators, have competitive clout
    • Black Holes and Bombs
      • Overinvested, low value, can license in, not strategic, not part of competancy or market
  • 54. Conclusion
    • You can’t just dress-up you need to be “in shape” underneath it all
    • You must be in shape and dressed up at all times cause you never know when someone will ask you out
    • Due diligence is a process it’s really DO DILIGENCE
    • Always evaluate on how to Monetize Your Assets, if you can’t get rid of them.
    • Exploit everything on the Inside
    • Look at Your Company from the Outside