"Ten Lessons From Pinnacle" by Ajay Chopra

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From idea to success: The Pinnacle Systems Story: From start to $350 million and a successful exit. By Ajay Chopra, Venture Consultant - Trinity Ventures and Founder - Pinnacle Systems

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"Ten Lessons From Pinnacle" by Ajay Chopra

  1. 1. Ajay Chopra Trinity Ventures 3000 Sand Hill Road Menlo Park CA 94025 www.trinityventures.com Ten Lessons from the Pinnacle Experience
  2. 2. A brief history of Pinnacle Systems <ul><li>Founded 1986; Series A </li></ul><ul><ul><li>Media authoring and delivery tools </li></ul></ul><ul><li>FCS 1987; Series B </li></ul><ul><li>1989 Series C </li></ul><ul><li>Failed IPO 1992 </li></ul><ul><li>IPO 1994; Secondary offerings 1995/96 </li></ul><ul><li>Acquired 20+ entities 1996-2003 </li></ul><ul><li>Sold to Avid Technology in 2005 </li></ul><ul><ul><li>$462M cash and stock </li></ul></ul>
  3. 3. Lesson #1: Building a Company is a marathon <ul><ul><li>Average run to IPO: 7 years </li></ul></ul><ul><ul><li>Plan to enjoy the “journey” not the “destination” </li></ul></ul><ul><ul><li>Success in determined by execution focus, team and value system </li></ul></ul>
  4. 4. Lesson #2: “What’s the heading, Captain?” <ul><ul><li>Always know the heading </li></ul></ul><ul><ul><li>Execution starts with leadership! </li></ul></ul><ul><ul><li>Focus on leading; hire to manage </li></ul></ul>
  5. 5. Lesson #3: Everybody’s money is not equally green <ul><ul><li>Find the right investor match </li></ul></ul><ul><ul><li>Make sure goals are aligned </li></ul></ul>
  6. 6. Lesson #4: Cut your losses! <ul><ul><li>Do not throw good money after bad </li></ul></ul><ul><ul><li>Nothing wrong with being frugal! </li></ul></ul><ul><ul><li>Define unbiased metrics for success and failure </li></ul></ul><ul><ul><li>Good enough is usually not! </li></ul></ul>
  7. 7. Lesson #5: Do not let the competition control your profitability <ul><ul><li>Continue to define your “blue ocean” </li></ul></ul><ul><ul><li>But do not underestimate your competition </li></ul></ul>
  8. 8. Lesson #6: Technologies can take discontinuous steps but markets evolve slowly <ul><ul><li>Develop to technology evolution </li></ul></ul><ul><ul><li>Plan to market evolution </li></ul></ul>
  9. 9. Lesson #7: When the market reaches the inflection point, BE READY! <ul><ul><li>More start-ups get upstaged by new competition at the market inflection point than anywhere else </li></ul></ul><ul><ul><li>Keeping tabs on the “convergence” factors </li></ul></ul>
  10. 10. Lesson #8: The soul of the company is its value system <ul><ul><li>Intellectual honesty </li></ul></ul><ul><ul><li>Leading by example </li></ul></ul><ul><ul><li>Fairness </li></ul></ul><ul><ul><li>Culture of excellence </li></ul></ul>
  11. 11. Lesson #9: You are known by the company you keep <ul><ul><li>Investors/Bankers </li></ul></ul><ul><ul><li>Board members </li></ul></ul><ul><ul><li>Auditors/Lawyers </li></ul></ul><ul><ul><li>Customers </li></ul></ul>
  12. 12. Lesson #10: Do not take yourself too seriously! <ul><ul><li>Remember to make the experience fun </li></ul></ul><ul><ul><li>Find fulfillment in the journey </li></ul></ul><ul><ul><li>Keep things simple </li></ul></ul><ul><ul><li>Choose your battles </li></ul></ul>
  13. 13. Bonus slides! Matching with the right Venture Fund
  14. 14. Is your space an area of interest for the VC? <ul><li>Does the VC have expertise in the space your company is focused </li></ul><ul><li>VCs are well connected – will find an expert – including another VC </li></ul>
  15. 15. Fund investment preferences <ul><li>Geographical </li></ul><ul><li>Deal stage </li></ul><ul><li>Min-max investment profile </li></ul><ul><li>Percentage ownership requirements </li></ul>
  16. 16. Fund investment cycle <ul><li>When was the last fund raised? </li></ul><ul><li>How many investments have been made? </li></ul><ul><li>How much “dry powder” is left? </li></ul>
  17. 17. Portfolio conflict? <ul><li>Is this portfolio company an active investment? </li></ul><ul><li>Was it (or is it) a good investment? </li></ul><ul><li>Too much concentration – portfolio diversity? </li></ul><ul><li>Direct competitor? </li></ul>
  18. 18. Are you in fact ready for VC money? <ul><li>Only one shot with most VCs </li></ul><ul><li>Crisp story in 40 minutes – 15 slides </li></ul><ul><li>Team, Technology and TAM </li></ul><ul><li>Unfair advantage </li></ul>
  19. 19. And a final quote….. <ul><li>Entrepreneurship is “converting creativity and mental energy into wealth” - Narayana Murthy </li></ul>

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