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© David Teten 2016. More at teten.com© David Teten 2016. More at teten.com
Expert Networks, Consultants, Interim
Executive...
© David Teten 2016. More at teten.com© David Teten 2016. More at teten.com
 Selected private equity and venture capital f...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
 Introduction
 Expert Networks and ...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
Don’t Take Notes!
Download these slid...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
HOF Capital: Uniquely Positioned to O...
New York (HQ)
Mumbai
San Francisco
Cairo
Taipei
London
Brazil
Dubai
HOF has a global presence
Dublin
Sydney
2 PRIMARY OFFI...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
We take a thesis-driven approach to i...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
Backed by the leadership of global co...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
David Teten
 Managing Partner, HOF C...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
FundCommitment
Free Agent
expenses+wh...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
Selected Searchable Databases of PE/V...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
Source of Gains in Private Equity-Bac...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
Global economic crisis
• Most portfol...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
Matthew Kissner, Kissner Group
Manage...
Intro Advisor Board Next StepsExpert Deal Exec
© David Teten 2016. More at teten.com
Matthew Kissner, Kissner Group
Growth...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
 Introduction
 Expert Networks and ...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
Overview: Expert / Interim Executive
...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
 Interact with professional investor...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
Expert Network Access Model
Investor ...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
Selected Leading Expert Networks
The ...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
USA-focused
 Business Talent Group
...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
USA-focused
 Accordion Partners
 Ea...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
Selected Interim Executive Providers
...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
Other forms of engagement:
 Presenta...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
 Accept/Reject request within 48
hou...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
Experience
 Industry Recognition
 A...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
 Update your availability and bio
- ...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
 Apply for open projects
 Mail your...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
 Observe compliance restrictions
 R...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
Agenda
 Introduction
 Expert Networ...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
Overview: Senior Advisor
Position
 W...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
“Senior advisor network” or “Executiv...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
based on table from Jon Weber, Anchor...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
Selected Funds with Senior Advisor Ne...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
U.S. Funds That Typically Partner wit...
Intro Advisor Next StepsExpert
© David Teten 2016. More at teten.com
Board Deal Exec
http://farm1.static.flickr.com/7/8228...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
Agenda
 Introduction
 Expert Networ...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
Overview: Board of Directors
Position...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
What are Boards responsible for?
 Br...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
40
What do Boards look for in their d...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
What Boards Look Like
…By the numbers...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
What Boards Look Like
…By the numbers...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
What NEW Directors look like…
62.5 y...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
 By background/function
- Active CEO...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
 Board & Committee meeting fees vs. ...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
Micro Small Medium Large Top 200
Valu...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
Additional Resources
 How to get on ...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
Board Member Networks
 Allen + Assoc...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
Agenda
 Introduction
 Expert Networ...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
Overview: Deal Executive / EIR
Positi...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
How Private Equity Views Executives
J...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
Selected Venture Capital Funds with F...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com http://www.flickr.com/photos/bfurlong...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
 Teaser
 Business plan
 Executive ...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
 CEO-level leader or direct report t...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
 Compatible goals
 Aligned incentiv...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
 Proactively seeking to identify dea...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
 Akoya Capital
 Blackmore Partners
...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
 Review industry for feasibility:
- ...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
 Find the company and get close to
s...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
 Secrecy
 Continuity
 Speed
 Lowe...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com Based on Post Capital, http://www.def...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com Based on Post Capital, picasaweb.goog...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com Based on Mario Kyd, Unlimited Horizon...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com Based on Mario Kyd, Unlimited Horizon...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com based on Post Capital; Lapis Group; n...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com Based on Post Capital upload.wikimedi...
Intro Advisor Deal Exec Next StepsExpert Board
© David Teten 2016. More at teten.com
This does not reflect compensation fo...
Next StepsIntro AdvisorExpert Board Deal Exec
© David Teten 2016. More at teten.com
Agenda
 Introduction
 Expert Network...
Next StepsIntro AdvisorExpert Board Deal Exec
© David Teten 2016. More at teten.com
 The Virtual Handshake: Opening Doors...
Next StepsIntro AdvisorExpert Board Deal Exec
© David Teten 2016. More at teten.com
Appendix: Compensation and Sample Org
...
Next StepsIntro AdvisorExpert Board Deal Exec
© David Teten 2016. More at teten.com
More Startup Compensation Data
 Angel...
Next StepsIntro AdvisorExpert Board Deal Exec
© David Teten 2016. More at teten.com
Startup Org Chart: Garage with < $100k...
Next StepsIntro AdvisorExpert Board Deal Exec
© David Teten 2016. More at teten.com
Sample Startup Org Chart: Seed: < $1.0...
Next StepsIntro AdvisorExpert Board Deal Exec
© David Teten 2016. More at teten.com
Sample Startup Org Chart: Funded: $1.0...
Next StepsIntro AdvisorExpert Board Deal Exec
© David Teten 2016. More at teten.com
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Working with Private Equity and Venture Capital Portfolio Companies

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Career Opportunities with Private Equity and Venture Capital Portfolio Companies

Serving as an Expert Network Consultant, Interim Executive, Senior Advisor, Executive in Residence, Entrepreneur in Residence, and/or Deal Executive

Speaker: David Teten
www.Teten.com

Working with Private Equity and Venture Capital Portfolio Companies

  1. 1. © David Teten 2016. More at teten.com© David Teten 2016. More at teten.com Expert Networks, Consultants, Interim Executives, Senior Advisors, Board Members, Deal Executives, and/or Executive/Entrepreneurs in Residence How Executives and Founders Can Work with Private Equity and Venture Capital Funds http://www.flickr.com/photos/izzard/183927/ David Teten HOF.capital / @HOFcapital teten.com / @dteten New York, NY
  2. 2. © David Teten 2016. More at teten.com© David Teten 2016. More at teten.com  Selected private equity and venture capital funds  CEO Trust  Executive Forum  Harvard Business School Alumni Career Management Webinar Series  Harvard Business School Club of Connecticut  International Executives Resource Group  Institute for International Research PE Operations conference Selected past audiences for this presentation
  3. 3. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com  Introduction  Expert Networks and Interim Executives  Senior Advisor Networks  Board of Directors  Deal Executives/EIRs  Next Steps Agenda
  4. 4. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com Don’t Take Notes! Download these slides at teten.com/oe
  5. 5. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com HOF Capital: Uniquely Positioned to Outperform  Primarily invest at the Seed and Series A stages  Our 9 initial Limited Partners consist of leading multinational corporations & family offices which view HOF as the best way to work with the US innovation economy, including: Orascom Group, Godrej Group, Dallah Albaraka, Globalive, and Travco Group  We provide our portfolio companies with active sales, capital-raising, and business development assistance, leveraging our relationships with enterprise leaders & governments worldwide  Powerful ecosystem relationships: co-invested with many leading VC funds in the same round with the same terms, including NEA, GV (Google Ventures), Bessemer Venture Partners, First Round Capital, and 8VC  International platform: 2 primary offices, team fluent in 8 languages  The majority of our firm has known one another for between 4-21 years  Significant internal technology stack  Close ties with next-generation family office members across EMEA and North America
  6. 6. New York (HQ) Mumbai San Francisco Cairo Taipei London Brazil Dubai HOF has a global presence Dublin Sydney 2 PRIMARY OFFICES 8 AFFILIATE REPRESENTATIVES Through Venture Partners & Associates 21 PORTFOLIO COMPANY HQ + AFFILIATE OFFICES Mountain View Los Angeles Santa Monica Beverly Hills Seattle Austin Toronto Nigeria Mexico City Estonia Bogota Brisbane
  7. 7. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com We take a thesis-driven approach to investing Source: (1) Gartner Research, (2) IHS Markit, (3) Forbes, (4) EdtechxGlobal, (5) Statista, (6) Statista Figures as of June 30, 2017 Trend Opportunity Sample HOF Investments Autonomous Transportation 21 million autonomous vehicles sold annually by 2035 2 Starship Technologies; Drive.ai Exploding Freelance Economy By 2020, freelancers are expected to make up 50% of the full time workforce in the US 3 VIDA; VOIQ; Yup Technologies Rapid Growth of Digital Payments in Africa & the Middle East $96bn+ annual digital payment transaction value in Africa and the Middle East by 2021 6 Flutterwave Regalii Micro-Targeted Digital Advertising $335bn+ global digital advertising spend per year by 2020 5 Social Native AI - Powered Enterprise Solutions By 2020, an estimated 85% of customer interactions with enterprise will be automated / non-human 1 SuperPhone; OPTii Solutions Blockchain Digital Infrastructure for Developing Economies 2 billion individuals, and 200 million micro, small, and midsize businesses in emerging economies today lack access to savings and credit1 Blockstack (in DD); Bitoasis (in DD) Asset Management Technology 39% operating margins + very unhappy clients; see more at DisruptInvesting.com and PEVCTech.com Drop Loyalty Among the areas where we see opportunity:
  8. 8. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com Backed by the leadership of global conglomerates Real Estate & Hospitality Telecom & Internet Media Infrastructure Financial Services Global $7bn conglomerate with presence in 44 countries; largest private employer in Saudi Arabia ✔ ✔ ✔ ✔ ✔ Egypt's largest tourism conglomerate with $600m+ in revenue; 1.3m tourist customers annually ✔ ✔ Founded WIND Mobile ($1.6bn exit) and Globalive Communications ($120m revenue) ✔ ✔ ✔ ✔ Indian conglomerate with current annual revenues of $4.1bn+ ✔ ✔ ✔ ✔ Global $18bn conglomerate employing over 60,000 people in over 20 countries ✔ ✔ ✔ ✔ ✔ We are building a base of complementary, scalable limited partners
  9. 9. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com David Teten  Managing Partner, HOF Capital  Previously Partner for six years, ff Venture Capital, one of the best-performing seed- and early-stage VC firms in the U.S.  Previously serial entrepreneur and Bear Stearns technology investment banker  Advised clients such as Goldman Sachs Special Situations Group, Icahn Enterprises, LLR Partners ($1.4b fund), Birch Hill Equity Partners (C$2B fund), and other institutional investors  Harvard MBA, Yale BA  Teten.com / @dteten / info@teten.com
  10. 10. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com FundCommitment Free Agent expenses+whatever you negotiate Rejected Executives Senior Advisor / Deal Executive expenses+whatever you negotiate Executive/Entrepreneur in Residence modest retainer+upside Portfolio Company / NewCo Management salary+upside Executive’s Income Expert Network / Interim Executive $300/hour - $1,000/day Operating Partner / Venture Partner salary+carry (sometimes) PE Fund Structural Options in Working with Operating Executives Private equity funds have a wide range of options in working with executives and entrepreneurs. Board of Directors salary + upside
  11. 11. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com Selected Searchable Databases of PE/VC Funds You can identify institutional investors through one of multiple online databases. All Investors Private Equity Venture Capital • S&P Global Market Intelligence • Grey House • Pratt’s Guide • Preqin • Thomson One • Eurekahedge • Pitchbook (free trial) • PrivateEquityFirms.com (free trial) • AngelList (free) • CrunchBase (free) • DowJones Venturesource • PWC MoneyTree • TheFunded (free) • VentureDeal (free trial) • Asian Venture Capital Journal
  12. 12. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com Source of Gains in Private Equity-Backed Companies Ernst & Young 2006 study of 100 exits Operational improvement drives 71% of value creation in PE-backed companies.
  13. 13. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com Global economic crisis • Most portfolio companies require operating changes to survive Investors seek differentiation • Bain: “as much as 80% of PE returns will come from real performance improvement, rather than … financial structuring.”* Maturing Private Equity Industry • Larger size and greater complexity leads to greater role specialization Risk Mitigation • Operational perspective add counter-balance to deal team Strategy Driven • Deep value investing, turnarounds, mid-market focus, and industry-specialized funds require hands-on approach. based on Jon Weber, Anchorage Advisors LLC * http://www.bain.com/bainweb/publications/publications_detail.asp?id=10735&menu_url=publications_results.asp Operational improvement is particularly important now because of the economic landscape and the maturation of the PE industry.
  14. 14. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com Matthew Kissner, Kissner Group Management Environment Before and After PE Investment PE funds almost always require an upgrade in management, and change management teams if necessary. Before Investment After Investment Reporting Independent Have a “boss” Style Loose, entrepreneurial Financial discipline Decision making Just do it Board approval Determining success Divide up the cash at the end of of the year Monthly financials, annual bonuses Spending Invest as needed Must be justified
  15. 15. Intro Advisor Board Next StepsExpert Deal Exec © David Teten 2016. More at teten.com Matthew Kissner, Kissner Group Growth Capacity Before and After PE Investment PE funds require a company to lay capacity for organic and, often, acquisition-led growth. Success Factors when Small Success Factors for Growth Lean senior executive team Complete senior and mid-management team Informal small group dynamics Formal roles, responsibilities, and systems Ad hoc IT projects – reactive Flexible and scalable IT Cash basis financial systems Strong monthly financial and operational reporting All business is good business Customer segmentation Limited prioritization Strategic plan drives priorities
  16. 16. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec  Introduction  Expert Networks and Interim Executives  Senior Advisor Networks  Board of Directors  Deal Executives/EIRs  Next Steps Agenda
  17. 17. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec Overview: Expert / Interim Executive Position  Provide advice to investors, primarily in 30-60 minute phone calls  Act as executive for short time period, typically 7-30 days Pay  $100-$1,000 / hour Requirements  Maintain a very detailed and current bio, and update your availability  Keep current on your industry  Proactively seek new assignments  Consider becoming a public expert, e.g., with PRNewsWire ProfNet, HelpaReporter.com
  18. 18. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec  Interact with professional investors and corporations  Strategic, thought-provoking projects  Competitive compensation  Receive fees to introduce colleagues And the big NO’s:  No membership cost  No marketing cost  No time spent on negotiating or chasing payment Benefits To Executive of Participating in Expert Network http://flickr.com/photos/foundphotoslj/1134148114/ Expert networks are highly attractive to participants, whether working full-time, consultants, or in transition.
  19. 19. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec Expert Network Access Model Investor Buyers Academics Supplier Government New Entrants CompetitorCorporate Alumni based on Competitive Strategy: Techniques for Analyzing Industries and Competitors, Michael Porter. Management Expert networks provide investors access to experts from all of the forces that impact a company.
  20. 20. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec Selected Leading Expert Networks The expert network industry is the fastest-growing sector of the investment research sector, with aggregate revenues over $300m. Generalists  Atheneum Partners  AlphaSights  CAPVision (China)  Coleman Research Group  GLG  Guidepoint Legal  IMS EpertServices  Round Table Group  TASA Medical  MEDACorp (Leerink Swaan)  Sermo  Insight Alpha India Pvt Ltd  Maven Research, Inc  Kingfish Group  Primary Insight  Third Bridge
  21. 21. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec USA-focused  Business Talent Group  Expert360  Highpoint Associates  Point B  PwC Talent Exchange  Talmix  10EQS Europe-focused  a-connect  Eden McCallum  Mindbench http://www.flickr.com/photos/opendemocracy/1441901063/ Selected Consultant Networks Networks of independent consultants have emerged as a new niche, typically engaging in projects of 2-6 months duration.
  22. 22. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec USA-focused  Accordion Partners  EagleFirst  Expertera  HourlyNerd  IQWorkForce  SpareHire http://www.flickr.com/photos/opendemocracy/1441901063/ Selected Consultant Networks Networks of investment bankers/M&A professionals have also emerged Europe-focused  MBA & Co
  23. 23. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec Selected Interim Executive Providers USA -focused  Business Talent Group  Boyden Interim  Cerius Interim Executive Solutions  Executive Smarts  ForteCEO  FTI Consulting  Geller & Company  Heidrick & Struggles  McDermott & Bull  OnDemand Resources  OneAccord  Tatum Executive Services  Willmark Associates Europe - focused  Alium Partners  BIE  Brooklands Executives  EIM (Executive Interim Management)  Impact Executives  Marble Hill Partners http://www.flickr.com/photos/opendemocracy/1441901063/ The interim executive industry is much better developed in Europe than in the US.
  24. 24. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec Other forms of engagement:  Presentations  Surveys  White papers  Longer consulting projects http://farm2.static.flickr.com/1318/1134149284_85feb293d3.jpg?v=0 Expert networks engage with experts in a range of ways, but telephone calls are the primary method.
  25. 25. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec  Accept/Reject request within 48 hours  Consultation strictly between expert and client  No fixed obligation http://farm4.static.flickr.com/3274/2866399803_8c9493b42f_o.jpg Expert networks are designed to require an extremely low level of commitment from experts.
  26. 26. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec Experience  Industry Recognition  Academic credentials Access to unique knowledge  Affiliations Communication skills Irrelevant: social skills, management skills http://www.flickr.com/photos/kanzeon_zen_center/183801709/ Expert Network Selection Criteria Expert networks assess experts based on their knowledge and ability to share it.
  27. 27. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec  Update your availability and bio - Quantify achievements - Explain how you acquired your expertise  Insert specific keywords - Identify firms you touched - Focus on industry-specific knowledge  Update your bio and profile questions again based on consults you get  More ideas: teten.com/resume The #1 driver of your participation in expert networks is the quality of data in your online profile. http://www.flickr.com/photos/edenpictures/3460562429/sizes/z/in/photostream/
  28. 28. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec  Apply for open projects  Mail your liaison when you have insight into a hot topic - breaking news - a conference you just attended  Go on-call  Contribute to expert network discussion boards  Ask http://www.flickr.com/photos/sarahquinn/124454341/ Successful consultations lead to more consultations. Also, experts can increase consulting volume through 5 methods:
  29. 29. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec  Observe compliance restrictions  Review current news  Ask client’s level of background—do they want an introduction or to jump into very specific topics?  Ask questions to understand the client’s hot buttons  Make sure to answer client’s key questions  Acknowledge your limits  Prepare to debate  Offer referrals http://upload.wikimedia.org/wikipedia/commons/3/3b/Old_key_on_table.jpg Thorough preparation for a consultation enhances your client ratings.
  30. 30. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec Agenda  Introduction  Expert Networks and Interim Executives  Senior Advisor Networks  Board of Directors  Deal Executives / EIRs  Next Steps
  31. 31. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec Overview: Senior Advisor Position  Work closely with fund to source deals  Work closely with portfolio companies to mentor & provide advice  Modest time commitment, typically 2-10 hours/month Pay  Variable pay; retainer or service fee Path Forward  Work for 10+ years as successful entrepreneur/executive  Research funds with established advisor networks / EIR programs and contact them via referral
  32. 32. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec “Senior advisor network” or “Executive network” = investor-sponsored group of executives with ability and willingness to add value to portfolio companies Industry Expert Deal Source Interim CFO Investor Portfolio Company “C” Portfolio Company “B” Portfolio Company “A” Board Member based on Jon Weber, Anchorage Advisors LLC Definition
  33. 33. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec based on table from Jon Weber, Anchorage Advisors LLC Senior Advisor Network vs. Traditional Talent Sources Senior Advisor networks offer a low-fixed-cost, high-return talent pool option. Experts and Consultants Senior Advisor Network Executive Recruitment Relationship Owner Expert network / consultancy Fund Recruiting firm, then handed over to fund Duration 1–2 hours to 3 months 6 months–2 years+ Permanent job and board positions Sample Service Providers GLG, McKinsey Harvey & Co., Notch Partners Accolo, Heidrick & Struggles, Russell Reynolds Illustrative Cost $1,000/hr for expert networks $300–700/hr for consultants Sometimes retainer, sometimes paid like investment banker 1/3 compensation Driver of Exec Compensation Length of consultation Value creation and continued involvement with client companies Winning full-time employment Confidentiality NDA possibly. Consultant may “shop” ideas. Signed, enforceable NDA NDA unusual
  34. 34. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec Selected Funds with Senior Advisor Networks Many leading PE and VC funds have built Senior Advisor Networks. Private Equity Venture Capital  3i  Castle Harlan  Cerberus  Irving Place Capital  General Atlantic  Goldman Sachs Special Situations Group  Great Oaks Venture Capital  HOF Capital  Lions Capital
  35. 35. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec U.S. Funds That Typically Partner with Executives to Execute a Transaction and Bring in New Management Upon Investing Data based on firm websites as of 2012. Frontenac AUM based on last two funds. # Investments/Year based on mean activity level over firm’s existence, with some adjustment for growth of fund over time. Partnering with operating executives is a successful strategy which is a focus for only a small number of funds. Private Equity Fund Founded AUM ($m) Cum. # Investments # Deals/ Year (est.) GTCR 1980 $8,000 100 7 Wind Point Partners 1984 $2,000 80 5 Frontenac Company 1971 $875 200 5 Housatonic Partners 1997 $1,000 50 4 Prospect Partners 1998 $270 35 3 Red Diamond Capital 2002 $150 8 1 Post Capital Partners 2004 $100 7 1
  36. 36. Intro Advisor Next StepsExpert © David Teten 2016. More at teten.com Board Deal Exec http://farm1.static.flickr.com/7/8228640_921246eaa3.jpg?v=0  Abernathy Group “Collaborative Investing”  Frontenac  Institutional Venture Partners Founders Fund  Irving Place Capital (formerly BSMB) Selected PE Funds with Executive Funds Some PE funds offer favorable economic terms for executives who are “friends of the firm”.
  37. 37. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Agenda  Introduction  Expert Networks and Interim Executives  Senior Advisor Networks  Board of Directors  Deal Executives / EIRs  Next Steps
  38. 38. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Overview: Board of Directors Position  Broad oversight of management and company Pay  Startups: options  Established companies: $100-200K on up, plus equity Path Forward  Have history of leadership / management experience, at the C-level  Contact recruiters in this sector via referral  Many boards aggressively seeking women and minority representation
  39. 39. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com What are Boards responsible for?  Broad oversight of management  Manage CEO succession  Guidance and strategic sounding board  “Mentors and Monitors” “Landing a Board Seat” for International Executive Resources Group-Boston. October 26, 2011. New Directions, Inc.
  40. 40. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com 40 What do Boards look for in their directors?  Proven leadership  Specific skills or experience, e.g.: - Financial background - International experience - Position as active or retired CEO - Experience in dealing with challenges faced by company / CEO  Network - E.g. for startups: connection to VCs “Landing a Board Seat” for International Executive Resources Group-Boston. October 26, 2011. New Directions, Inc.
  41. 41. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com What Boards Look Like …By the numbers  Average board size –10.7  Independent directors = 82% of board seats  CEO is sole insider in 50% of boards  Average age – 61.7 years  Diversity: - Women=16% of independent directors - Minorities=15% of independent directors  Average tenure of current directors=8.4 yrs  One year terms becoming the norm (68%)  80% have mand. retirement EY Board Matters Quarterly January 2017
  42. 42. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com What Boards Look Like …By the numbers  50% of boards separate the CEO and Chairman roles - 19% have an independent Chairman - 92% have an outside Lead Director  Average Board has 8.2 committees - Audit , Compensation, and Nominating/Governance (100%) - Executive (44%) - Finance (33%)  Average # of meetings/year: - Full Board (8.4); Audit (6.9); Compensation (5.3) -EY Board Matters Quarterly January 2017
  43. 43. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com What NEW Directors look like… 62.5 years = average age of a new Director Women = 20% of new independent Directors 10% of boards still have no women 11% of boards still have no minorities An ongoing need for Diversity…gender, race, experience, professions, Spencer Stuart 2010 Board Index of S&P500 EY Board Matters Quarterly January 2017
  44. 44. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com  By background/function - Active CEOs/Pres=26% of new Directors (vs 53% in 1999) - Retired CEOs/Pres=17% (vs 7% in 1999) - Business unit heads / Functional heads=18% (vs 11% in 1999) - Financial backgrounds=21% (vs 17% 1999) Overall, 61% are active executives (vs 66% in 2006) and 39% are retired (vs in 2006) -Spencer Stuart 2010 Board Index of S&P500 What NEW Directors look like…
  45. 45. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com  Board & Committee meeting fees vs. retainers  Mix of cash + equity - Shifting to more equity, less cash - Equity grants Shares vs. options Fixed value vs. fixed shares - Equity ownership requirements Director compensation “Landing a Board Seat” for International Executive Resources Group-Boston. October 26, 2011. New Directions, Inc.
  46. 46. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Micro Small Medium Large Top 200 Valuation $50- $500M % inc YOY $500M<$ 1B % inc YOY $1B< $2.5B % inc YOY $2.5B<$ 10B % inc YOY >$10B % inc YOY Total Director Comp $91K 20% $119K 10% $148K 13% $176K 7% $228K 5% Change in Total Director Pay by Company Size % inc YOY = % increase over 2009-2010 data. Source: 2010 –2011 NACD Director Compensation Report
  47. 47. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Additional Resources  How to get on a board  How To Get a Board of Directors Seat  Shall Partners Board Compensation Study  Directors & Boards  OnBoard Bootcamps  National Association of Corporate Directors
  48. 48. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Board Member Networks  Allen + Associates  Bridgespan  BoardProspects  boardnetUSA  Execrank  Korn Ferry  Stybel, Peabody  Spencer Stuart  Thomson Reuters Director Search  NASDAQ’s registry of prospective directors Diversity  Women Corporate Directors  Catalyst – women  ELC - African-American directors  Hispanic Association on Corporate Responsibility
  49. 49. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Agenda  Introduction  Expert Networks and Interim Executives  Senior Advisor Networks  Board of Directors  Deal Executives / EIRs  Next Steps
  50. 50. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Overview: Deal Executive / EIR Position  Full-time role looking for a company to invest in, and typically serve in as CEO Pay  Usually modest retainer with carrot of finder’s fee + CEO role in new new company Path forward  Demonstrate history of successfully leading company at C-level, or direct report to C-level  Offer a deal thesis or letter of intent to PE firm
  51. 51. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com How Private Equity Views Executives Job SeekerDeal Resource Thesis-Driven Deal Exec Deal Exec with Letter of Intent Target-Driven Deal Exec http://www.flickr.com/photos/chailey/138654755/ . Inspired by Notch Partners. PE funds are primarily looking for deals, not executives.
  52. 52. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Selected Venture Capital Funds with Formal EIR Programs Certain VC funds proactively seek out qualified Entrepreneurs in Residence  Austin Ventures  Dell (the computer company)  Foundation Capital  HOF Capital  General Catalyst  Redpoint Ventures  VTT Technical Research Centre of Finland
  53. 53. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com http://www.flickr.com/photos/bfurlong/2351689062/ . Based on Notch Partners and many other sources.  Clear definition of industry – niche, size, geography, etc.  Transaction rationale consistent with company’s growth prospects  Basic financial markets analysis: trading range, feasibility  Outline of value-creation opportunities  Plan for pursuing those sources of value  Explanation of why you/ your team are ideally suited to lead effort  Roster of 5-20 target companies  Status of discussions with targets (if any)  Thoughts on likely exit (IPO, strategic buyer) Elements of a Deal Thesis
  54. 54. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com  Teaser  Business plan  Executive profile  Forecasts - Strategic - Operational - Financial http://www.flickr.com/photos/11846056@N06/3110329005/ Elements of a Deal Memo
  55. 55. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com  CEO-level leader or direct report to C- level - 10+ years in industry/related market. 10+ years leading P&L and preferably also balance sheet experience. - Clear value creation plan. Understanding of private equity.  Personal capital to invest  Ideally: ready management team; corporate governance skills (board experience), investor relations experience http://www.flickr.com/photos/ilker/2494740320/ Deal Executive Preferred Profile: Credibility
  56. 56. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com  Compatible goals  Aligned incentives  Personal chemistry http://www.flickr.com/photos/superrabbit/319538167/ Deal Executive Preferred Profile: Compatibility
  57. 57. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com  Proactively seeking to identify deals. - Preferably, has proprietary deal(s)  Financially stable to go without salary during search  Spousal support  100% committed to a risky process not fully in your control  Entrepreneurial and sales oriented  Can relocate  Prefer: acquisition experience. http://flickr.com/photos/krikit/2745563123/sizes/o/ Deal Executive Preferred Profile: Deal-Catcher
  58. 58. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com  Akoya Capital  Blackmore Partners  Cook Associates  Executive Capital Partners  Harvey & Company PE/executive intermediaries are investment bank+recruiter hybrids which work with executives throughout the process to help execute a transaction. Leading Investment Banks/Recruiters Specializing in Matching PEGs with Executives  Notch Partners  R.B. Price & Company  Silverfern Group  Skill Capital  Tri-Artisan Partners LLC
  59. 59. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com  Review industry for feasibility: - Market trends (opportunistic research analysis) - Valuation analysis - Capital-intensity requirements - Fragmentation analysis  Profile executive to assess candidacy  Source companies  Source sponsors http://www.flickr.com/photos/pfala/3036252334/ PE fund/executive intermediaries have a standard process to execute a transaction.
  60. 60. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com  Find the company and get close to signing a Letter of Intent, then pursue sponsor  Find sponsor and then search for company. - Executive screens for funds with track record of pursuing executive- led transactions and interest in industry - More important to use this strategy with larger deals http://www.flickr.com/photos/thalamus/3560789785/ An executive has two main paths to choose from in pursuing a transaction:
  61. 61. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com  Secrecy  Continuity  Speed  Lower investment banking fees  “Dummy insurance”: easier to keep a stake in the spunoff company  Trust/proven competency  Relationship with the Board of Directors Rick Rickertson, Buyout: The Insider’s Guide to Buying Your Own Company, 49-50. Primary Reasons Some Companies Prefer Selling to Management Many companies prefer to sell to management, even at risk of a lower price than they might get from an auction.
  62. 62. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Based on Post Capital, http://www.defenselink.mil/dodcmsshare/newsphoto/2008-03/hires_080301-F-2319R-006.jpg  Introduction  Initial meetings  Assessment of investment thesis Duration: 2-4 weeks Step 1 of 5: Launch Relationship with Fund
  63. 63. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Based on Post Capital, picasaweb.google.com/lh/photo/FOHUbVdTEYKdftpmi6TkXQ  Refine thesis  Agree on compensation/economics and exclusivity  Background check  Formulate deal origination plan Step 2 of 5: Finalize partnership between executive and fund Duration: 1-4 weeks
  64. 64. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Based on Mario Kyd, Unlimited Horizons; http://www.flickr.com/photos/carve/2856365431/  Inefficiencies within a market segment or industry  Ineffective processes  Outdated business models  Competition from low cost countries  Novel product, process or idea  Rollup of fragmented industry  Industry changes (read the trade rags) Concept-Driven Approach (e.g., with investment banker) Step 3 of 5: Identify/Contact Opportunities Duration: 1-12 months
  65. 65. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Based on Mario Kyd, Unlimited Horizons; http://www.flickr.com/photos/jurvetson/3346659199/  Former employers, suppliers, customers, competitors  Investment bankers, brokers, accountants, lawyers  Attend conferences  Look for reasons why people sell Opportunistic Approach (Network), led by Executive Step 3 of 5: Identify/Contact Opportunities (cont’d) Duration: 1-12 months
  66. 66. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com based on Post Capital; Lapis Group; numerous other sources. http://www.flickr.com/photos/matt_gibson/954340171/  Company meetings  Negotiate  Due Diligence  Can a deal be made?  Can we interest investors?  Can you “drive” the deal? Step 4 of 5: Evaluate Targets Duration: up to 3 months
  67. 67. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com Based on Post Capital upload.wikimedia.org/wikipedia/commons/4/47/Tower_Bridge_closing.jpg  Finalize documentation  Finalize financing Step 5 of 5: Closing Duration: up to 3 months
  68. 68. Intro Advisor Deal Exec Next StepsExpert Board © David Teten 2016. More at teten.com This does not reflect compensation for an executive’s role as a company employee post-deal. Note that transaction fee and carry are inversely related. * Robert Seber, Dechert LLP, “Transaction and Monitoring Fees: Does Anything Go?”, 2003. ** The PEG’s fund documents will generally discuss whether a portion of that fee (often half) is set off against management fees that the LP’s would otherwise owe. Other data based on Akoya Capital, Oberon Securities, and other interviewees. Typical Economics for Mid-Market Private Equity Acquisition, for PEG, Deal Finders, Investment Bankers, and other Executives Fee Type Payer Amount Recipient of Payment Transaction Fees Capital providers 0.5-3.4% deal size* PEG pays finder’s fee of 1-3% of enterprise value, plus sometimes carry, to deal finder + buy-side investment bank (if any). (Company (specifically selling shareholders) pay investment banker seller’s fee.) Monitoring Fees Company 0.2%-4.4% EBITDA (median 1.2%)*,** Company pays outside board members for ongoing services (~$5K+/meeting + equity incentives) Expenses Company Post-deal expenses, not pre-deal Company pays PEG for post-deal expenses. Important for buy-side operating exec/investment banker to get PEG to commit to pay broken deal costs. Carry Limited Partners ~1% assets + ~20% carry LPs pay PEG this carry. Investment rights - - Usually unlimited co-invest rights for executives involved, with no PEG management fee. Executives will, however, pay pro rata monitoring/other monitoring/other fees.
  69. 69. Next StepsIntro AdvisorExpert Board Deal Exec © David Teten 2016. More at teten.com Agenda  Introduction  Expert Networks and Interim Executives  Senior Advisor Networks  Board of Directors  Deal Executives / EIRs  Next Steps
  70. 70. Next StepsIntro AdvisorExpert Board Deal Exec © David Teten 2016. More at teten.com  The Virtual Handshake: Opening Doors and Closing Deals Online, David Teten and Scott Allen  Buyout: The Insider’s Guide to Buying Your Own Company, Rick Rickertson  goodreads.com/teten  teten.com Suggested Reading
  71. 71. Next StepsIntro AdvisorExpert Board Deal Exec © David Teten 2016. More at teten.com Appendix: Compensation and Sample Org Charts at VC Portfolio Companies
  72. 72. Next StepsIntro AdvisorExpert Board Deal Exec © David Teten 2016. More at teten.com More Startup Compensation Data  AngelList  CompStudy - tech industry focus  ExpertCEO Salary Survey  Erieri  GlassDoor.com  Payscale.com  Quora  Salary.com  Wealthfront
  73. 73. Next StepsIntro AdvisorExpert Board Deal Exec © David Teten 2016. More at teten.com Startup Org Chart: Garage with < $100k funding Business / Product / Sales / Marketing Engineer Engineer Position Equity Salary Engineer 3 - 10% ~$50k VP 3 - 10% ~$50k CEO 10 - 20% ~$50k 2 engineers + business person Updated from estimates in Aaron Patzer, Mint.com CEO, Founder Institute Presentation, July 2008
  74. 74. Next StepsIntro AdvisorExpert Board Deal Exec © David Teten 2016. More at teten.com Sample Startup Org Chart: Seed: < $1.0m funding Business / Sales / Marketing Product / Design / UI Dir / VP / Eng EngineerEngineer Engineer Position Equity Salary Engineer 0.5 - 3% ~$100 - $175k VP 1 - 3 % ~$80 - $125k CEO 5 - 15% ~$80k - $150K 4 engineers + product + business person Updated from estimates in Aaron Patzer, Mint.com CEO, Founder Institute Presentation, July 2008
  75. 75. Next StepsIntro AdvisorExpert Board Deal Exec © David Teten 2016. More at teten.com Sample Startup Org Chart: Funded: $1.0m + funding CEO Sales / Marketing / PR Dir / VP / Eng QA / TestEngineer x 4 Tech Ops / IT / Servers Product / Design / UI HR / Finance Position Equity Salary Engineer 0.2 - 1% ~$100 - $175k VP 1 - 2% ~$80 - 125k CEO 4 - 7% ~$100 - 150k 10 – 12 people, $4.0m in Series A funding scenario Updated from estimates in Aaron Patzer, Mint.com CEO, Founder Institute Presentation, July 2008
  76. 76. Next StepsIntro AdvisorExpert Board Deal Exec © David Teten 2016. More at teten.com Any questions ? slides at teten.com/oe Sign up for the mailing list at teten.com @dteten
  77. 77. Next StepsIntro AdvisorExpert Board Deal Exec © David Teten 2016. More at teten.com A representative of an asset management firm (“Firm”) is providing this presentation for informational purposes to the intended audience. Nothing in this presentation shall constitute an offer or solicitation with respect to the purchase or sale of any security in any jurisdiction nor should anything in this presentation form the basis of, or be relied upon for, making any investment decision. Nothing in this presentation constitutes professional and/or financial advice of any kind (including business, employment, investment advisory, accounting, tax, and/or legal advice), nor does any information in this presentation constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. This presentation and the information contained herein are provided “AS IS”. The Firm and the presenter make no representation or warranty (express or implied) with respect to the information contained herein (including, without limitation, information obtained from third parties) and expressly disclaims any liability based on or relating to the information contained in, or errors or omissions from, these materials; or based on or relating to the recipient’s use (or the use by any of its affiliates or representatives or any other person) of these materials; or based on any other written or oral communications transmitted to the recipient or any of its affiliates or representatives. The Firm and the presenter undertake no duty or obligation to update or revise the information contained in this presentation. Disclaimer

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