Business Growth 051209

Growing your Business
Turning technology into cash

Mike Holt
Tel: +65 8126 7748
US/Singapore: +1-949-480-9271
Skype ID: mikeholt93
www.get2volume.com | mholt@get2volume.com

© 2009 Get2Volume

Topics

• Planning for Growth Main Idea: Enrollment
• Attracting Talent
• Involving experts How do you share the dream,
• Building boards of share the responsibility and
directors and get others involved?
advisors
• Growth Challenges:
Managing difficulty

2 © 2009 Get2Volume

Growth Stages


“Secrets” of Entrepreneurial Success

• There are no secrets
• As soon as there is a secret, everyone knows it
• Happiness is positive cash flow
• Don’t run out of cash
• Entrepreneurship is a human process. You have a big
impact.
• Happiness is positive cash flow


Entrepreneurial Journey

• Goals matter – a lot
– Passion
– Desire to win
• Values and principles matter – a lot
– Treat others as you want to be treated
– Share the wealth
– Give back
– Be a guardian of the world around you


What Enables Growth


Enrollment:
– Employees
– Partners
– Board Members
– Advisors


People: Setting Goals, Measureables and
Compensation
Team Responsibility Title Contribution Commitment Unique
• Align Member and Risk Skills

compensation
with contribution
• Develop
budget/plan

Team Salary Stock
Member (Shares
and %)


Startup Compensation

• See http://www.altgate.com/blog/2009/04/2009-startup-executive-compensation-
survey-opens.html

Option Awards (Mean vs Average)


Create Option Budget
Per Stock Stock Stock
Annual Hire Total Value Value Value
Salary 2006 Budget Stock ($K) ($K) ($K)

$K (base) Bonus Jan Feb Mar Apr May Jun Jul Aug Sep Min Max

CTO 160 32.0 1 1 1 1 1 1 1 1 1 $150.0 $200.0
Systems Engineer 110 0.0 0 0 0 1 1 1 1 1 1 $20.0 $30.0
Jr Research Engineer 55 0.0 0 0 0 0 0 0 0 0 0
Sr Research Engineer 87.5 0.0 0 0 0 0 0 0 0 0 0 $20.0 $30.0

VP Eng 155 38.8 1 1 1 1 1 1 1 1 1 58000 58000 $149.1 $150.0 $200.0

Sr Mixed Signal DE/Group lead 140 0.0 0 2 2 2 2 2 2 2 2 12000 24000 $30.8 $35.0 $40.0
Mixed Signal DE 110 0.0 0 0 0 2 2 3 3 4 4 8000 32000 $20.6 $20.0 $30.0
Digital DE 95 0.0 0 0 1 1 1 1 1 1 1 6000 6000 $15.4 $20.0 $30.0
Layout 85 0.0 0 0 0 1 1 1 1 1 1 5500 5500 $14.1 $20.0 $30.0
Verification Eng. 90 0.0 0 0 0 1 1 2 2 2 2 7000 14000 $18.0 $20.0 $30.0
Ops Dir (Contractor) 1 1 1 0 0 0 0 0 0 21000 0 $54.0

System Arc 160 0.0 0.5 0.5 0.5 0.5 1 1 1 1 1 25000 25000 $64.3 $35.0 $40.0
Apps/SE 90 0.0 0 1 1 1 1 1 2 2 2 8000 16000 $20.6 $20.0 $30.0
Program Manager 80 0.0 0 0 0 1 1 1 1 1 1 4000 4000 $10.3 $10.0 $15.0
VP Marketing 180 60.0 1 1 1 1 1 1 1 1 1 45000 45000 $115.7 $150.0 $200.0
Marketing Manager 135 10.0 0 0 1 1 2 2 2 2 2 15000 30000 $38.6

• Option plan and amount created with the Board of Directors
• An option budget of 15%-20% is typical


Board of Directors: Types of Boards

• Working Boards: These boards role up their
sleeves and help the founders and management
team . They meet frequently, have animated,
engaged discussions, and offer significant
ongoing support to the key owners and
managers of the company. Working Boards
• Reporting Boards: Boards that meet four to six are the only
times a year for a status report on the company. appropriate
If everything is going well, they tend not to have
much to say. If there are problems or issues, they
entrepreneurial
are often critical of the CEO and the boards
management team.
• Lame Duck Boards: Boards that have no
influence on the company -simply rubber stamp
exercises for the CEO or founders.


BOD and Advisory Boards: Questions to ask

• Whom Do You Want?
• The Right Level of Experience
• The Right Number
• Whom to Avoid?
• Advisory Board vs. Directors
"On a board of advisers, I can give my best advice and not be constrained by the
possibility that it's going to come back and bite me. It does change people's
perspectives."

“When it's a legal commitment, the directors feel a deeper, broader sense of
responsibility to the company, to all the stakeholders, and the well-being of
the company and the institution -- to the continuity of the enterprise,"


• In the process of growth, your company will see
difficult, troubling times.

• Anticipating difficulty is critical to success


Troubled Companies

Sources:
• Inattention to
Strategic Issues
• General Management
Issues People Issues:
• Poor Measurement Misalignment of objectives
(Financial/Accounting/
Metrics)


Troubled Companies: Signs

Signs:
Sources: • Ignored outside advice
• Inattention to • Worse is yet to come
Strategic Issues • People have stopped making
decisions
• General Management
• Nobody is talking to employees
Issues • Rumors are flying
• Poor Measurement • Inventory is increasing
(Financial/Accounting/ • Accounts receivable aging
Metrics) increasing
• Customers are afraid to make
commitments
• General malaise combined with
high stress environment

Troubled Companies: Strategic Issues

• Misunderstood market niche
• Mismanaged customer and supplier relationships
• Diversification into an unrelated business area
• Mousetrap Myopia
• “The Big Project”
• Lack of contingency planning


Troubled Companies: Management Issues

• Lack of management skills
• Weak finance function
• Turn over of key management
• Insufficient focus on cash


Troubled Companies: Poor Measurement

• Poor pricing/excessive leverage
• Lack of cash budgets/projections
• Poor management reporting
• Lack of stand costing
• Poorly understood cost behavior
• Entrepreneurial growth is a journey. Commit to
journey even through detours, breakdowns and side
trips.


Planning for the Harvest

• A journey not just a destination
• The journey can be addictive
• First build a great company
• Create harvest options

• Capital cow
• MBO
• M/A -> strategic alliance
• Outright sale
• Public offering

Getting to Growth: Summary

• Be clear on your strengths/weaknesses and those of
your team. Plan to compensate.
• Have clear, measureable goals. Communicate these
well.
• Principles and ethics matter always but especially
when things get tough


Thank you

To download marketing tools: www.askthesgentreprenuer.com

Contact Us at:
Mike Holt
Tel: +65 8126 7748
US/Singapore: +1-949-480-9271
Skype ID: mikeholt93
www.get2volume.com | mholt@get2volume.com


About Us

About Get2Volume
Now more than ever, success in Asia determines global success.
Technology companies – even the smallest – are global companies that
must address complex problems with markets, suppliers, customers,
partners and employees in the US as well as in Asia. With over 20 years
experience in Asia and the US, we understand the people, the business and
political environments, and markets that shape technology companies.
This experience allows us to solve business problems in a way that goes
well beyond generating ideas – it focuses on improving results by providing
an executive team on the ground where you need results. We combine
executive management experience in technology, software, semiconductor,
secure payment, and information security companies with success;
assisting established companies and leading startups from concept
through rapid growth and profitability.

Asia-US Bridge Company Stage Sectors
• Semiconductor
• Singapore/SEA • Start Up
• Internet
• California • Growth
• Consumer Electronics
• Regional MNC Focus
• Security
• Biometrics


Appendix


Business Growth 051209

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