The document provides an agenda for Day 3 of the Lead to Win program. It includes opportunities for participants to have their startup ideas assessed, presentations on funding a startup and growing a business, and a welcome to the Founders Club. Participants will work on strengthening their startup ideas, expanding their networks, and gaining knowledge to establish and grow a technology business. The day will conclude with messages and a wrap-up.

1. Welcome to Lead to Win
Thursday, October 27, 2011
Slide 1 Lead to Win

2. Day 3
David Hudson Day 3 opportunity
(Carleton) assessments
David Hudson Reviewers comments
(Carleton)
Eric Dormer (Dawnsuite Communications) Founders Club welcome
& Jason Daley (UcreateMedia)
Tony Bailetti Growth & Days 4-6
(Carleton)
Funding your startup
(Deloitte & Touche LLP)
Janice Singer & Deborah Dexter (IRAP) Day 3 takeaway messages
Wrap-up
Slide 2 Lead to Win

3. Day 3 Opportunity Assessments
October 27, 2011
David Hudson
Slide 3 Lead to Win

4. Ottawa-Gatineau experience
Jun Aug Nov Mar Jun Nov Nov Total
09 09 09 10 10 10 11
Applicants 82 66 98 69 41 49 59 464
123 Day 1 accepts 62 46 55 49 35 29 46 322
4 wks
456 Day 4 accepts 51 35 44 37 22 18 ? 207
Admitted to Phase 3 (passed Day 6)
Opportunity
development
Founders 39 27 34 26 14 13 ? 153
Deal
development
New startups 30 19 21 18 11 11 ? 110
75 start-ups active as of
October 15, 2011
Slide 4 Lead to Win

5. Day 3 opportunity reviews
Criteria and process to assess opportunities set by
representatives of nine LTW Strategic Associates
Part A - scoring
1. CUSTOMER VALUE
2. COMPETITIVE
3. PARTNER VALUE
Part B -
Part C - substantive feedback to opportunity proponents
Scoring of 1/2/3
Green: OK
Yellow: OK with a specific action
Red: Considerable work still required
Reds are not invited to join Days 4-6
Slide 5 Lead to Win

6. 28 Reviewers
1. Consumer products 3. Internet services A
(Daisy, 1st floor) (Blue, 2nd floor)
Line Brabant (LINE Hanan Anis (uOttawa)
International) Mark Antaya (Investors)
Chris Cope (City of Ottawa) Rob Collins (YearOne Labs)
Dan Istead (Fed Government) Llynne Plante (IRAP)
Christine McCrady (RBC)
Jonathan Wells (Carleton)
2. HW & SW products 4. Internet services B
(Marigold, 1st floor) (Red, 2nd floor)
Peter Carbone (PJCI) Elizabeth Gilhooly (Nuvance)
John Fielding (OCE) Claude Haw (VentureCoaches)
Farzi Khazai (Tech Gemini) Harriet Waterman (IRAP)
Raina Sharma (BDC) Michael Weiss (Carleton)
Stoyan Tanev (U Southern
Denmark)
Slide 6 Lead to Win

7. 28 Reviewers (continued)
5. Services 6. Special
(Violet, 1st floor) (Lilac, 3rd floor)
Saad Bashir (City of Ottawa) Diane Isabelle (National
Candace Enman (Welch Research Council)
Group) Carole Lair (OCRI)
Fiona Gilligan (Fiona Karen Letain (ETIS
Gilligan) Technologies)
David Hudson (Carleton) Steven Muegge (Carleton)
Sophia Leong (Industry Ian Scott (City of Ottawa)
Canada)
Slide 7 Lead to Win

8. Process
Presentations are made only to panel of reviewers
20 minutes is allocated to each opportunity. 20 minutes is a hard limit.
Lead reviewer is responsible for:
Distributing / collecting Opportunity Assessment Forms
Assigning ID codes to reviewers to guarantee reviewer anonymity
Keeping time and smooth running of the reviews
Ensuring forms are properly completed
Dealing with issues
Improving the opportunity assessment process
Each reviewer rates each opportunity independently before the next
group/individual is allowed into the room
If reviewers and opportunity proponents wish to exchange cards,
arrange follow ups, etc.; they should do so during lunch or the social
and not take time away from the assessment process
Slide 8 Lead to Win

9. Suggested time allocation
We suggest
Set up time and niceties: 2 minutes
Presentation: 10 minutes
Q & A: 5 minutes
Day 3 Opportunity Assessment form completion: 3 minutes
Up to Review Panel
Slide 9 Lead to Win

10. Lead to Win Founders Club
Co-chairs: Eric Dormer & Jason Daley
Slide 11 Lead to Win

11. Blueprint to growth
(one more time)
October 27, 2011
Tony Bailetti
Slide 12 Lead to Win

12. Distinct functions of entrepreneurs
1. Responds to existing or future profit opportunities, all
of which consists of price differentials
P1 P2 Sales of:
Resources & Decisions to Expects P2 > P1
processes employ
resources &
processes
2. Acts to move away or destroy her/his present state
Seeks autonomy
Authors relationships
Makes declarations
Slide 13 Lead to Win

13. Four key skills
Make decisions when future is unknowable
Identify, create, shape, develop and refine
opportunity
Acquire and combine resources
products, services, solutions, processes
Slide 14 Lead to Win

14. Blueprint to grow revenue
Raise bar
Get house in Divest what adds no value
Get legal, cash, IP &
order personal affairs right
Act based on results/facts
Revenue Secure
Close deals
for 6+ jobs commitment
Implement growth formula
Increase # & diversity of Create mind share around
players that make money when
you sell Overcome does what it does
Develop differentiators for consumption Lever talent, technology &
which customers pay resources worldwide
Keep pace delivering value to barriers Lower cost of customer
customers & players Skills acquisition & go to market
Select right competitors $
Access/reach
Time
Slide 15 Lead to Win

15. Inventory of growth formulas for small
companies
1. Help strong customers grow
2. Bring innovation to market as complementary offer
3. Apply good technology developed by others to
different markets
4. Sell services to niche first & then develop & sell
product
5. Demonstrate offer works, sell to first customers, &
identify profitable business model at the price first
customers are willing to pay
6. Demonstrate that offers provides value to users &
economic benefits to customers & can be delivered
at a profit
Slide 16 Lead to Win

16. Inventory of growth formulas
(continued)
7. Make competition irrelevant by concurrently
delivering 2X the value at half the cost
8. Sell to narrow niche, cross-sell, then fill higher order
needs
9. Sell to customers in mature markets abandoned by
incumbents
10. Fill gaps that occur when migrating from an old to
new system
11. Resell services in geographies that are too
expensive for other service providers
Slide 17 Lead to Win

17. Days 4-6 overview
October 27, 2010
Tony Bailetti
Slide 18 Lead to Win

18. Tasks
Harden and strengthen opportunity
Prepare presentation for Day 6 assessment
Self assess presentation using 7 dimensions
Expand network
Attend social and engage
Gain knowledge to establish and grow tech business
Review and apply Day 1-3 course material
Gain confidence, encouragement and motivation
Interact with peers
Build foundation to sell to first customers
Identify first customers
Slide 19 Lead to Win

19. Days 4-6
Day 4
Legal issues
Business models
Entering a market, lessons from an entrepreneur
Day 5
Team and steering, lessons from an entrepreneur
Operations, lessons from an entrepreneur
From idea to management to sale, lessons from an entrepreneur
Day 6
Day 6 Opportunity Assessment
IRAP services to companies
Social where we hand out LTW Certificates of Achievement
Slide 20 Lead to Win

21. Agenda
So, you want to be an entrepreneur
Funding your firm and your family
Your runway
Sources of funding
Key take aways
Scenario
Slide 22 Lead to Win

22. Funding your firm and your family
Upon completion,
You will know . . .
What it means to be an Entrepreneur
How to separate family and firm
How much money you need and when
How much risk is for you
Sources of funding
You will know how to . . .
Take stock of your personal and professional situation
Engage your family in the process
Understand your funding sources
Slide 23 Lead to Win

23. Becoming an entrepreneur
Pros Cons
What are these How high are these
??????
Slide 24 Lead to Win

24. Becoming an entrepreneur
Pros Cons
Living the dream! Give up on a full time job and
Build a firm my way lose $100k income
Possible comfortable living or Go into debt for $100k
exit in excess of $1m Work very long hours
Innovative IP Not see the family
Capitalize on your strengths Learning process
out of work for 12 months and a $100k debt
Slide 25 Lead to Win

25. Sharing with the family
This is a dialog!
The plan
Describes your thinking and planning
Lets them describe their thoughts (may take weeks)
The expectations
Articulate your expectations, listen to their expectations
Describe the time invested
Describe financial expectations and situation
The exit
Establish your exit plan, with clear exit event or point
The contract
Take the time and write it down and refer to it monthly
Slide 26 Lead to Win

26. Sharing with the family
Describe the plan
I would like to do this . . . (Start a firm, test equipment, etc)
The expectations
Articulates the expectations borrow $100k
Work long hours, never home for dinner or always home for
dinner but work in the evening??
No vacations etc because of low funds
Family response
They agree to do . . . (Look after the family single handedly)
The exit
Establish the clear quit point after 2 years if no sales then will
go find a firm to work for . . .
The contract
Write it all down and everyone signs even the dog
Slide 27 Lead to Win

27. Find a trusted confidant to talk to when things are going well, so
you can confide when things are bad spouses are not a good
choice
Constantly looking for funds
Never pass up funds because you think you have enough
Ever opportunity must be taken
Driving the direction of the firm
Dealing with challenging employees
Selling to customers
Extreme highs and extreme lows
Slide 28 Lead to Win

28. Setting up the firm
Stock structure capital structure
Shareholder rights, drag alongs
Incorporation
What happens if you leave
What happens if you fire your partner
Slide 29 Lead to Win

29. Business corporation basics
Ownership is separate from
management
Appoint
Shareholders Board is responsible to
manage or supervise the
business affairs and may
Auditor Elect delegate its authority to
management
Appoint Board of Directors As a startup, you likely are
all three, but need to
Appoint understand the different
rights and responsibilities
Audit Committee Management / Company
Appoint
Internal Auditor Hire Retain
Employees Consultants & Advisors
Slide 30 Lead to Win

30. Different funding for different firms
Consulting firms
Require virtually zero capital to start, usually all intellectual property is in
the heads of the employees
Intellectual property license firms
Require minimal capital to build, usually the first invention (patent) can
be built with a couple of people with product launch via license or
lawsuit
Internet and mobile app firms
Require minimal capital to build, usually the product development can
be completed by a couple of people with product launch via the web
Software firms
Require intermediate amounts of capital to build, because of longer
product development cycle, however, fixes can be applied after product
launch
Hardware firms
Require the most amount of capital to build, because of the longer cycle
coupled with any hardware rework costing significant time and money to
implement
Slide 31 Lead to Win

32. Without cash
Stress? You need a $ platform to keep you whole!
Without cash
How much?! Too little you choke, too much you waste it.
How much $$ do you need? When do you need the $$
It takes two plans Family and Firm
Slide 33 Lead to Win

33. Cash Flow and Risk are intertwined
Family
Understand how much it costs to live
Prepare the family budget (even if its just you)
What can you live with?
Business
Understand how much it costs to build
Prepare a business cash flow forecast
Be pessimistic (2x the time and 2x the cost)
Know the bottom line costs
Slide 34 Lead to Win

34. Example : monthly cash flow plan
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
CASH OUTFLOWS
Rent (600) (600) (600) (600) (600) (600) (600) (650) (650) (650) (650) (650)
Utilities 0 (50) 0 (50) 0 (30) 0 (30) 0 (30) 0 (50)
Phone and Internet (40) (40) (40) (40) (40) (40) (40) (40) (40) (40) (40) (40)
Materials 0 0 0 (200) (500) 0 0 0 0 0 0 0
Testing 0 0 0 0 0 0 (500) 0 0 0 0 0
Advertising 0 0 0 0 0 0 0 (400) 0 0 0 0
TOTAL CASH OUTFLOWS (640) (690) (640) (890) (1140) (670) (1140) (1120) (690) (720) (690) (740)
CASH INFLOWS
Savings 6000 0 0 0 0 0 0 0 0 0 0 0
Government Grant 0 0 0 0 0 0 0 0 500 0 0 500
Family loan 0 0 0 0 0 0 0 0 0 0 5000 0
TOTAL CASH INFLOWS 6000 0 0 0 0 0 0 0 500 0 5000 500
Opening balance 6000 5360 4670 4030 3140 2000 1330 190 (930) (1120) (1840) 2470
Closing balance 5360 4670 4030 3140 2000 1330 190 (930) (1120) (1840) 2470 2230
Slide 35 Lead to Win

35. Example of cash flow projections
Company Name
Forecast operating results & cash flow from operations
Currency $ 000 s
Forecast For Years Ending (Month and Day)
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Revenue xxx xxx xxx xxx xxx xxx
COGS xxx xxx xxx xxx xxx xxx
Gross Profit xxx xxx xxx xxx xxx xxx
Operating expenses xxx xxx xxx xxx xxx xxx
Operating expenses 1 xxx xxx xxx xxx xxx xxx
Operating expenses 2 xxx xxx xxx xxx xxx xxx
Operating expenses 3 xxx xxx xxx xxx xxx xxx
Total operating expenses xxx xxx xxx xxx xxx xxx
Operating income/(loss) EBIT xxx xxx xxx xxx xxx xxx
Interest expense xxx xxx xxx xxx xxx xxx
Earnings (loss) before tax xxx xxx xxx xxx xxx xxx
Income tax xxx xxx xxx xxx xxx xxx
Net income (loss) xxx xxx xxx xxx xxx xxx
Operating income/(loss) EBIT xxx xxx xxx xxx xxx xxx
Add: Depreciation /amortization xxx xxx xxx xxx xxx xxx
EBITDA xxx xxx xxx xxx xxx xxx
Less: Cash taxes xxx xxx xxx xxx xxx xxx
Less: Working capital investment xxx xxx xxx xxx xxx xxx
Less: Capital expenditures xxx xxx xxx xxx xxx xxx
Cash flow from operations xxx xxx xxx xxx xxx xxx
Slide 36 Lead to Win

36. Sources of funding
You build runway with $$
Angels, friends and family
Venture Capital
Banks
Government
Strategic Investment
Capital Pool Company (CPC)
Initial Public Offering (IPO)
Slide 37 Lead to Win

38. Angels, friends and family
Earliest investors
Desire for privacy makes them difficult to identify/find
Deploy small amounts ($10k 500k)
Longer term investment horizon, often with high return
expectations
Provide funds for product development
Provide cash for common shares, convertible debt
Valuation of shares a question
May provide services for shares
Need a shareholder agreement to set out the terms
Slide 39 Lead to Win

39. Venture capital
Equity investor looking for high growth over 5-10 years
VC Status
Canadian VC LP system is in distress
WW VC funding is reducing to pre-2000 levels (half the current rate)
Number of VC firms and funding to be reduced to 50% of current levels
Expectation that it will be significantly more difficult raise funding than
even today
VC Game
Experienced teams, large markets, significant traction
Eat a share of your firm every time they invest
Leave you with 1 or 2%!!!
You may be pushed aside
Risk
Slide 40 Lead to Win

40. Banks
There are many types: charter (eg big five), quasi-banks,
government (BDC, EDC), investment
Need assets to secure the funds
Your house
Your receivables
They do not take risks they are lenders, not investors
They are very useful at various times but look for the collateral
After you file income tax, an SRED claim is collateral
After you ship, accounts receivable is collateral
After you own inventory, its collateral
Etc.
RISK if the plan fails, you could lose your house!
Reward non-dilutive to your ownership, use someone else
money
Slide 41 Lead to Win

41. Government
Government Funding
Policy based, such as employment driven
Long gestation cycle, may take a year
Funds arrive in buckets (they can run out part way through the
year)
Competitive in nature your proposal must be better than others
Avoid people who promise to get you funding
Watch out for repayable loans, they have expensive reporting
requirements
RISK As long as you complete the project as outlined,
little risk
Reward Non-dilutive source of funds
Slide 42 Lead to Win

42. Government (continued)
SDTC Sustainable Development Technology Canada
Projects must demonstrate new technology with environmental
sustainability
Collaborative with industry/academic partner
ETF Emerging Technologies Fund
For Ontario innovation
Clean technology, life sciences, digital media, information
communication technology
Passive equity investment
OCE Ontario Centers for Excellence
Funds for research, commercialization and talent
Must collaborate with academic initiation
Slide 43 Lead to Win

43. Government (continued)
OCE Investment Accelerator Fund
Seed money preparing company for first round funding
Joint between MARS in Toronto & ministry
For Ontario innovation, clear path to commercialization
IDF Innovation Demonstration Funds
Environmentally friendly technologies
Ontario based, global market, tested technology
Combined grant and debt vehicle
SADI Strategic Aerospace Defense Initiative
Aerospace & defense activities
Working with research and academic institutions
Promotes innovation
Contributes % of expenses, repayable royalty
Slide 44 Lead to Win

44. Government (continued)
IRAP Industrial Research Assistance Program
Help small/medium business commercialize IP
Typically provide < $200k
Market Access Program
Global expansion for small/medium business in Ontario
More than 5 employees and minimum $500k
Eligible for trade shows, market research etc. up to $30k per
project to a max of 50% of costs
Slide 45 Lead to Win

45. R&D tax credit program
Combined tax credits available to qualifying Canadian
Controlled Private Corporations (CCPCs):
Claim is filed annually via corporate tax return (after money is
spent)
35% enhanced refundable credit on first $3 million
20% on balance (may be partially refundable)
Taxable income and taxable capital tests must be met to qualify
Additional credits available from Provinces
Deadline to file a claim is 18 months after fiscal year end
Must have documentation & evidence that criteria are met
Slide 46 Lead to Win

46. Capital Pool Company (CPC)
Capital Pool Company (CPC) publically traded company with
cash and no operations
Exists as vehicle for small business to obtain funds and become
public
A TSX Venture Exchange program
Filing and clearing of a prospectus, completion of an IPO and
Agreement in principle in respect of a proposed qualifying
transaction
Provides entry-level public vehicle for small businesses
Public offering is a minimum of $200K and maximum of $1,900K.
Gives access to future equity financing
Expensive process legal and compliance requirements
Slide 47 Lead to Win

47. Strategic investment
Possibly at later stage
Equity financing form strategic investor
Motivated by business/strategy/fit as opposed to
financial opportunity
Complementary to your business?
Consider whether this might limit potential for future
financing/exit
Slide 48 Lead to Win

48. Initial Public Offering (IPO)
Co offers common shares to the general public, in CDN
or US
Typically when revenue growth & profitability trending
very positive
Need underwriter, lawyers, accountants
Complex, costly legal process involving filing of
Process takes 3-6 months, completion depends on
market conditions
Provides liquidity exit to investors and cash to company
for growth acquisitions, etc.
Slide 49 Lead to Win

49. cash?
What is your business model??
No revenue, small costs
No revenue, lots of costs
Revenue from services while concurrently developing product
One partner has a job and pays the rest to develop product
Revenue from customers at the outset
Revenue from R&D and selling IP
Revenue from selling product or service that complements a large
firm's product or service
There are many business models!
Slide 50 Lead to Win

50. Key Takeaways
Family is as important as the firm
Know your limits
Many sources of funding exist
Plan for it to take 2x in time and cost 2x in funds than
your forecast
Things change as you grow, be prepared to exploit
changes
community
Slide 51 Lead to Win

51. Two Friends with a Plan
Person 1 Bill is a new PhD grad who has been doing
low analog signals
Person 2 James is a test and measurement industry
veteran with experience in selling and marketing
products to semiconductor firms world wide
Opportunity
the emerging green automobile market.
Implementation to create, build and sell a new
sector
Slide 52 Lead to Win

52. Background on James
Age 40
Married for 15 years with two children, a girl 14 and a
boy 10
Comfortable life, low debt load (can afford a $100k
loan)
No significant retirement savings for James
Spouse works for Fed Gov ($60k per year)
Always talked about starting his own business
Met Bill through a university industry project and liked
him and his technology
Slide 53 Lead to Win

53. Becoming an Entrepreneur - James
Pros Cons
Living the dream! Give up on a full time job and
Build a firm my way lose $100k income
Possible comfortable living or Go into debt for $100k
exit in excess of $1m Work very long hours
Innovative IP Not see the family
Knows how to sell
industry
out of work for 12 months and a $100k debt
Slide 54 Lead to Win

54. Sharing with the family - James
Describe the plan
Describes thinking and planning with spouse and children
Lets them describe their thoughts (may take weeks)
The expectations
Articulates the expectations borrow $100k
Work long hours, never home for dinner or always home for
dinner but work in the evening??
No vacations etc. because of low funds
The exit
Establish the clear quit point after 2 years if no sales then will
go find a firm to work for . . .
The contract
Write it all down and everyone signs even the dog
Slide 55 Lead to Win

55. Personal/Family Budget
Jan Feb March April May June July Aug Sept Oct Nov Dec Year
INCOME
Wages 3,000.00 3,000.00
Interest/dividends 0.00
Miscellaneous 0.00
Income totals 3,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,000.00
EXPENSES
Home
Mortgage/rent/taxes 0.00
Utilities 500.00 500.00
Home and mobile telephone 150.00 150.00
Food 700.00 700.00
Clothes and cleaning 0.00
Entertainment 500.00 500.00
Car, Bus, Fuel 500.00 500.00
Insurance 300.00 300.00
Health 50.00 50.00
Subscriptions 0.00
Dues 0.00
Charity 0.00
Recreation 0.00
Team dues 0.00
Courses 0.00
Kids Stuff 400.00 400.00
Vacations 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Home totals 3,100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,100.00
Financial obligations
Long-term savings 0.00
Retirement (401k, Roth IRA) 0.00
Credit card payments 0.00
Line of Credit 0.00
Other obligations 0.00
Financial obligation totals 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Misc. payments
Other 0.00
Other 0.00
Other 0.00
Other 0.00
Other 0.00
Misc. payments totals 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total expenses 3,100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,100.00
Cash short/extra -100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -100.00
Slide 56 Lead to Win

56. Funding - Needs and Sources
Year 1 capital $100k (see spreadsheet)
Bill stays at university to teach and continue research (prototype)
Applies for NSERC to pay him for 1 year
James consults half time (all goes into firm)
Builds business plan, researches funding options
Firm applies for IRAP support, meets with OCE
Firm is incorporated, shareholder agreements, etc prepared, taxes filed
All costs deferred by lawyers and accountants
IRAP supports technical intelligence search, OCRI supports business
intelligence search firm closes in on marketing plan and business plan
Year 2 capital $100k (see spreadsheet)
Bill stops teaching, works on product full time, paid by OCE research
James stops consulting, leads firm full time, draws no salary
Firm hires first two key technical people, rest on contracts
Firm completes prototype to show to potential customers (auto parts)
IRAP supports project to 75% of salaries and contractors
Capital is used to pay for rent (cheap building), material etc
Slide 57 Lead to Win

57. Company Cash Flow Forecast, Yr 1
Company Name In Thousands Cash Flow Projection
Prepared By: For the Year Ending: Date:
Month -1 1 2 3 4 5 6 7 8 9 10 11 12 Total
Cash Receipts:
Cash Receipts:
Act Pay Receipts 0
Loans 0
Government Forecast 0
Other (James contract) 10 10 10 10 10 10 10 10 10 10 10 120
Total Cash Receipts 0 0 10 10 10 10 10 10 10 10 10 10 10 120
Cash Disbursements:
Company - Direct Labour 0
Fringe Benefits 0
Material Purchases 0
Overheads - Utilities 0
Rent / Mortgage 0
Insurance 0
Property Taxes 0
Office Supplies 0
Automobile 0
Travel 0
Maintenance 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 1.3
Admin - Salaries 0
Professional Fees 0
Advertising 0
Interest & Bank Charge 0
Income Taxes 0
Fixed Asset Additions 0
Loan Repayment 0
Other Company Costs 0
Company Exp Sub-Total 0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 1.3
Employee Expenses
Salaries - Position 1 0
Salaries - Position 2
Salaries - Position 3
0
0 !
Salaries - Position 4 0
Salaries - Position 5 0
Subcontractor / Cons 1 0
Subcontractor / Cons 2 0
Project Material 0
Rental Equipment 0
Project Travel 0
Project Overhead 0
Other Project Costs 0
Exp Sub-Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Total Disbursements 0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 1.3
Net Cash Over (Short) 0 -0.1 9.9 9.9 9.9 9.9 9.9 9.9 9.9 9.9 9.9 9.9 9.9 118.7
Cash Balance, Beginning 100 100 99.9 109.8 119.7 129.6 139.5 159.3 169.2 179.1 189 198.9 208.8
Cash Balance, Ending 100 99.9 109.8 119.7 129.6 139.5 149.4 169.2 179.1 189 198.9 208.8 218.7
Slide 58 Lead to Win

58. Company Cash Flow Forecast, Yr 2
Company Name In Thousands Cash Flow Projection
Prepared By: For the Year Ending: Date:
Month -1 1 2 3 4 5 6 7 8 9 10 11 12 Total
Cash Receipts:
Cash Receipts:
Act Pay Receipts 0
Loans 0
Government Forecast 18 18 18 18 18 10 10 10 10 10 10 168
Other (specify) 0
Total Cash Receipts 0 0 18 18 18 18 18 10 10 10 10 10 10 168
Cash Disbursements:
Company - Direct Labour 0
Fringe Benefits 0
Material Purchases 0
Overheads - Utilities 0
Rent / Mortgage 2 2 2 2 2 2 2 2 2 2 2 2 26
Insurance 0
Property Taxes 0
Office Supplies 2 2 2 2 2 2 2 2 2 2 2 2 26
Automobile 0
Travel 0
Maintenance 2 2 2 2 2 2 2 2 2 2 2 2 26
Admin - Salaries 0
Professional Fees 0
Advertising 0
Interest & Bank Charge 0
Income Taxes 0
Fixed Asset Additions 0
Loan Repayment 0
Other Company Costs 0
Company Exp Sub-Total 0 6 6 6 6 6 6 6 6 6 6 6 6 78
Employee Expenses
Salaries - Position 1
Salaries - Position 2
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
65
65
??
Salaries - Position 3 0
Salaries - Position 4 0
Salaries - Position 5 0
Subcontractor / Cons 1 7 7 7 7 7 7 42
Subcontractor / Cons 2 7 7 7 7 7 7 42
Project Material 30 30 60
Rental Equipment 3 3 3 3 3 3 3 3 3 30
Project Travel 0
Project Overhead 0
Other Project Costs 0
Exp Sub-Total 0 24 24 24 57 57 27 13 13 13 13 13 13 304
Total Disbursements 0 30 30 30 63 63 33 19 19 19 19 19 19 382
Net Cash Over (Short) 0 -30 -12 -12 -45 -45 -15 -9 -9 -9 -9 -9 -9 -214
Cash Balance, Beginning 218.7 218.7 188.7 176.7 164.7 119.7 74.7 58.7 49.7 40.7 31.7 22.7 13.7
Cash Balance, Ending 218.7 188.7 176.7 164.7 119.7 74.7 59.7 49.7 40.7 31.7 22.7 13.7 4.7
Slide 59 Lead to Win

59. Funding - Needs and Sources
Year 3 capital $0k, need another $300k (see
spreadsheet)
Bill joins firm full time, no salary
James with firm full time, no salary
Firm signs first customer order but product needs a complete redesign
Contract worth $100k
Funding from??, Angels, customer, supplier?
Year 4 capital $500k
Bill and James draw a modest salary, $40k ea
Firm ramps business to $1m
Firm signs second customer
EDC and BDC and bank support SRED, accounts receivable, etc
Capital is used to pay for rent (cheap building), material, salaries etc
Still cash flow negative but burn is reducing
Slide 60 Lead to Win

60. Company Cash Flow Forecast, Yr 3
Company Name In Thousands Cash Flow Projection
Prepared By: For the Year Ending: Date:
Month -1 1 2 3 4 5 6 7 8 9 10 11 12 Total
Cash Receipts:
Cash Receipts:
Act Pay Receipts 50 50 100
Loans 0
Government Forecast 40 10 10 10 80
Other (ANGEL) 30 30 30 30 30 30 30 30 30 300
Total Cash Receipts 0 40 30 30 30 30 90 40 40 80 30 0 0 480
Cash Disbursements:
Company - Direct Labour 0
Fringe Benefits 0
Material Purchases 0
Overheads - Utilities 0
Rent / Mortgage 2 2 2 2 2 2 2 2 2 2 2 2 26
Insurance 0
Property Taxes 0
Office Supplies 2 2 2 2 2 2 2 2 2 2 2 2 26
Automobile 0
Travel 0
Maintenance 2 2 2 2 2 2 2 2 2 2 2 2 26
Admin - Salaries 0
Professional Fees 0
Advertising 0
Interest & Bank Charge 0
Income Taxes 0
Fixed Asset Additions 0
Loan Repayment 0
Other Company Costs 0
Company Exp Sub-Total 0 6 6 6 6 6 6 6 6 6 6 6 6 78
Employee Expenses
Salaries - Position 1 5 5 5 5 5 5 5 5 5 5 5 60
Salaries - Position 2 5 5 5 5 5 5 5 5 5 5 5 60
Salaries - Position 3 5 5 5 5 5 5 5 5 5 5 5 60
Salaries - Position 4 0
Salaries - Position 5 0
Subcontractor / Cons 1 7 7 7 7 7 7 42
Subcontractor / Cons 2 7 7 7 7 7 7 42
Project Material 30 30 90
Rental Equipment 3 3 3 3 3 3 3 3 27
Project Travel 0
Project Overhead 0
Other Project Costs 0
Exp Sub-Total 0 29 29 29 32 32 32 48 48 18 18 18 0 381
Total Disbursements 0 35 35 35 38 38 38 54 54 24 24 24 6 459
Net Cash Over (Short) 0 5 -5 -5 -8 -8 52 -14 -14 56 6 -24 -6 21
Cash Balance, Beginning 4.7 4.7 9.7 4.7 -0.3 -8.3 -16.3 21.7 7.7 -6.3 49.7 55.7 31.7
Cash Balance, Ending 4.7 9.7 4.7 -0.3 -8.3 -16.3 35.7 7.7 -6.3 49.7 55.7 31.7 25.7
Slide 61 Lead to Win

61. Overall Review
Clearly communicate specifics with your family
Understand the basics of corporate ownership
Amount of funding depends on business model risk/reward
tradeoff
Sources of funding - at each stage of life cycle
Angels, friends and family
Venture capital
Banks
Government
R&D tax incentives
Capital pool company
Strategic investment
IPO
Calculate your personal budget and corporate cash flow forecast
Slide 62 Lead to Win

62. Slide 63 Lead to Win

63. Day 3 takeaways
October 27, 2011
Janice Singer and Deborah Dexter
Slide 64 Lead to Win

64. Day 3 takeaways
Slide 65 Lead to Win