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DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMS
Startup Asset Management Service
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSAbout SiliconAlley.com
Since 1996, SiliconAlley.com has been dedicated to the
growth and evolution of the Internet industry. It is both a
community and a resource. A center of excellence where
industry best practices can be explored and where vision
and innovation are shared to build new Internet businesses.
It is a common ground for both people providing services
and those in need of them.
The service we are offering to investors is the management
of their startup investments. Investors who see startup
investment opportunities, but for lack of experience and the
minimal capital required, are unable to manage this asset for
their portfolios.
2
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSStartup Reality Check
11 out of 12 startups fail.
The dominant reason for failure is the startup’s
premature scaling in one or more of 5 dimensions:
- customer
- product
- team
- business model
- funding
Source: 2011 Startup Genome Infographics
3
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSIntroducing …
Silicon Alley Startup Asset
Management Service (SA|SAMS)
We manage your tech start-up
ideas, investment and process
from concept to market.
4
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSOur Umbrella Services
5
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSOur Key Deliverables
・ Education
・ Real estate
・ Legal
・ Accounting
・ HR & recruitment
・ Brand strategy
・ Marketing
strategy
・ SEO/Social media
plan
・ Business
development
・ Public relations
・ Wireframing
・ MVP design
・ MVP build
・ MVP testing
・ Go-to-market
strategy
・ Investor
documents
・ Investor intro
and negotiation
・ Board member
selection
Support
Services
Customer
Development
Product
Development
Business
Strategy
6
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMS
Our Best Practices / What We Believe In #1:
Pivot & Achieve Market Validation Early!
• Release the product sooner and confirm data
matches expectations.
• If data does not match expectations, pivot
until traction and market validation is
obtained.
• Scale at the appropriate points only after
data validation.
7
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMS
Our Best Practices / What We Believe In #2:
Don’t Waste Time; Speed-to-Market is Key
• It’s not cool, it’s cool work.
• Mentor employee relationship.
• The episodic nature of
different time zones working
together.
• Start building the idea right
away, not sitting in classes.
On- Off-
Shore Shore
24-Hour
Work Cycle
8
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMS
Our Best Practices / What We Believe In #3:
A Lean Process = MVP Launch in 12 Weeks
Week 1 2 3 4 5 6 7 8 9 10 11 12
Wire-
framing
MVP Design:
2-3 Rounds of
Development, Testing
& Pivots
MVP
Testing
MVP
Launch
Brand
Strategy
Marketing
Strategy
SEO /
Social
Media
Plan
Business
Dev.
Public
Relations
Customer Development:
Product Development:
Project
Planning
9
Business
Strategy
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMS
A Typical Process for Most Startups:
Lengthy, Inefficient and Expensive
10
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSOur Way vs. The Traditional Way
11
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSOur Tech Skill Sets
Others:
・ Apache Lucene
・ Google Analytics
・ Machine Learning
・ Adriano
Languages:
・ Java
・ C#
・ PHP
・ Ruby
・ JS
・ C/C++
Framework:
・ Backbone.JS
・ jQuery
・ Zend
・ ASP.NET
・ Spring
Databases:
・ mySql
・ sqlLite
・ mongoDB
・ ravenDB
Process:
・ Lean UX
・ Pen Testing
・ SCRUM/Kanban
・ thread modeling
・ wireframing
Mobile:
・ Android
・ Windows Phone
・ PhoneGap
・ HTML5
・ jQuery Mobile
12
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMS
Startup Selection Criteria:
What We Look For in Startups
Credentials and track record
Low maintenance principals; ability to listen well
Innovative technology not just better mousetrap
Reasonable flexible valuations
Products which can be built quickly at low cost
13
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSSource of Deals/Sales Leads
Lawyers
and
Accountants
Our
Network
and
Contacts
VCs
who are
buried in
deal flow
Teachers
& Prof’l
Orgs.
Reporters
& Social
Media
Contacts
14
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSLiquidity Opportunities
Vendor
Finance
Joint
Venture
Cash
Flow
Sale Refinance
15
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSInvestment Fee Structure
Series A,
Vendor Finance,
Joint Venture,
Sale, Cash Flow,
Refinance
Milestone
Bonus
Management
Fee
Success
Fee
Profit
Share
Retainer
2% carry per
annum
Optional based
on type of
services
rendered to the
startup
Investor gets
100% return of
the capital
first. Then split
the balance
80/20
A monthly
retainer that’s
less than
what
professional
service firms
charge
2%!80/20
16
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSIllustrative Calculations
Potential Return on Investment:
Investment
= $100k
Investor’s 80% Profit Share = $720k
(In this scenario, investor makes 8.2x his original investment.
SA’s 20%
Profit Share
= $180k
Investment:
$ 1 mil$900k$800k$700k$600k$500k$400k$300k$200k$100k
Capital:
$78k
Retainer:
$20k
Management Fee:
$2k
17
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSOur Core Team
Norman S. Rosenthal
・ Over 25 years management and
technical experience in
technology companies
・ Positions included VP of Sales,
CMO, COO, VP of BusDev and
President
・ Presently CEO of Tempest
Systems, a cutting edge
technology-consulting/ advisory
firm providing business
development services to 100+
hardware and software
vendors.
Arthur Bierer
・18 years of experience at
Microsoft as a Software
Developer and Product Guy
・ Built Internet Explorer 1.0
・ Worked as Windows developer,
worked with Anders Hejlsberg
on the C# language
・ Founded the NY International
Technology Meetup which
sponsors monthly events for
technologists
・ Founded abDevLabs along with
3 companies in the past year
since leaving Microsoft
Miles J. Rose
・ Founded siliconalley.com in 1996
・ Liquidity events: Consumer Search
(sold to NYTimes 2006);
Squashware software to Adobe
・ Advisor to Oddcast, the Humo
Network
・ Guest lecturer at NYU
・ Named to Silicon Alley Top 100
・ Received Mayor of New York’s
citation for hosting WWWAC
BizSig meeting during Internet
World
・ Featured in articles in New York
Times, Wall Street Journal and
other business publications
18
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSWhy Partner with Us
• The only NYC incubator with turnkey services to ensure
startup success (Go-to-market strategy, Investor documents, Investor intro and
negotiation, Board member selection, Wireframing, MVP design, MVP build, MVP testing, Brand
strategy, Marketing strategy, SEO/Social media plan, Business development, Public relations,,
Education, Real estate, Legal, Accounting, HR & recruitment)
• Proven best practices get things done faster and cheaper
• Access to an extraordinary large set of tri-state area
angel, VC, institutional and strategic investors
• Founders have 50+ years of combined experience
• siliconalley.com’s long-standing reputation as a primary
influencer of investment capital to NY-based tech
companies
• Hybrid resource teams and offices (onshore and offshore)
19
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSStartup Reality Check
11 out of 12 startups fail.
Source: 2011 Startup Genome Infographics
But businesses that go through incubators have an
87% success rate (still in business after 5 years) …
Source: National Business Incubation Association
… and business-heavy founding teams are 6.2x more
likely to successfully scale with sales.
Source: Genome Report 2012
Alternate version for Page 2
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMS
Our Best Practices / What We Believe In #3:
A Lean Process = MVP Launch in 12 Weeks
Week 1 2 3 4 5 6 7 8 9 10 11 12
Wire-
framing
MVP Design:
2-3 Rounds of
Development, Testing
& Pivots
MVP
Testing
MVP
Launch
Brand
Strategy
Marketing
Strategy
SEO /
Social
Media
Plan
Business
Dev.
Public
Relations
Customer Development:
Product Development:
Project
Planning
Business Strategy (Go-to-market Strategy, Investor Docs, Intro, Negotiation, Board Members)
Support Services (Education, Real Estate, Legal, Accounting, HR & Recruitment)
Alternate version for Page 9
DRAFT AND CONFIDENTIAL • JANUARY 26, 2013
SAMSOur Way vs. The Traditional Way
Alternate version for Page 11

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SiliconAlley Startup Services for Startups

  • 1. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMS Startup Asset Management Service
  • 2. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSAbout SiliconAlley.com Since 1996, SiliconAlley.com has been dedicated to the growth and evolution of the Internet industry. It is both a community and a resource. A center of excellence where industry best practices can be explored and where vision and innovation are shared to build new Internet businesses. It is a common ground for both people providing services and those in need of them. The service we are offering to investors is the management of their startup investments. Investors who see startup investment opportunities, but for lack of experience and the minimal capital required, are unable to manage this asset for their portfolios. 2
  • 3. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSStartup Reality Check 11 out of 12 startups fail. The dominant reason for failure is the startup’s premature scaling in one or more of 5 dimensions: - customer - product - team - business model - funding Source: 2011 Startup Genome Infographics 3
  • 4. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSIntroducing … Silicon Alley Startup Asset Management Service (SA|SAMS) We manage your tech start-up ideas, investment and process from concept to market. 4
  • 5. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSOur Umbrella Services 5
  • 6. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSOur Key Deliverables ・ Education ・ Real estate ・ Legal ・ Accounting ・ HR & recruitment ・ Brand strategy ・ Marketing strategy ・ SEO/Social media plan ・ Business development ・ Public relations ・ Wireframing ・ MVP design ・ MVP build ・ MVP testing ・ Go-to-market strategy ・ Investor documents ・ Investor intro and negotiation ・ Board member selection Support Services Customer Development Product Development Business Strategy 6
  • 7. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMS Our Best Practices / What We Believe In #1: Pivot & Achieve Market Validation Early! • Release the product sooner and confirm data matches expectations. • If data does not match expectations, pivot until traction and market validation is obtained. • Scale at the appropriate points only after data validation. 7
  • 8. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMS Our Best Practices / What We Believe In #2: Don’t Waste Time; Speed-to-Market is Key • It’s not cool, it’s cool work. • Mentor employee relationship. • The episodic nature of different time zones working together. • Start building the idea right away, not sitting in classes. On- Off- Shore Shore 24-Hour Work Cycle 8
  • 9. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMS Our Best Practices / What We Believe In #3: A Lean Process = MVP Launch in 12 Weeks Week 1 2 3 4 5 6 7 8 9 10 11 12 Wire- framing MVP Design: 2-3 Rounds of Development, Testing & Pivots MVP Testing MVP Launch Brand Strategy Marketing Strategy SEO / Social Media Plan Business Dev. Public Relations Customer Development: Product Development: Project Planning 9 Business Strategy
  • 10. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMS A Typical Process for Most Startups: Lengthy, Inefficient and Expensive 10
  • 11. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSOur Way vs. The Traditional Way 11
  • 12. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSOur Tech Skill Sets Others: ・ Apache Lucene ・ Google Analytics ・ Machine Learning ・ Adriano Languages: ・ Java ・ C# ・ PHP ・ Ruby ・ JS ・ C/C++ Framework: ・ Backbone.JS ・ jQuery ・ Zend ・ ASP.NET ・ Spring Databases: ・ mySql ・ sqlLite ・ mongoDB ・ ravenDB Process: ・ Lean UX ・ Pen Testing ・ SCRUM/Kanban ・ thread modeling ・ wireframing Mobile: ・ Android ・ Windows Phone ・ PhoneGap ・ HTML5 ・ jQuery Mobile 12
  • 13. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMS Startup Selection Criteria: What We Look For in Startups Credentials and track record Low maintenance principals; ability to listen well Innovative technology not just better mousetrap Reasonable flexible valuations Products which can be built quickly at low cost 13
  • 14. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSSource of Deals/Sales Leads Lawyers and Accountants Our Network and Contacts VCs who are buried in deal flow Teachers & Prof’l Orgs. Reporters & Social Media Contacts 14
  • 15. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSLiquidity Opportunities Vendor Finance Joint Venture Cash Flow Sale Refinance 15
  • 16. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSInvestment Fee Structure Series A, Vendor Finance, Joint Venture, Sale, Cash Flow, Refinance Milestone Bonus Management Fee Success Fee Profit Share Retainer 2% carry per annum Optional based on type of services rendered to the startup Investor gets 100% return of the capital first. Then split the balance 80/20 A monthly retainer that’s less than what professional service firms charge 2%!80/20 16
  • 17. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSIllustrative Calculations Potential Return on Investment: Investment = $100k Investor’s 80% Profit Share = $720k (In this scenario, investor makes 8.2x his original investment. SA’s 20% Profit Share = $180k Investment: $ 1 mil$900k$800k$700k$600k$500k$400k$300k$200k$100k Capital: $78k Retainer: $20k Management Fee: $2k 17
  • 18. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSOur Core Team Norman S. Rosenthal ・ Over 25 years management and technical experience in technology companies ・ Positions included VP of Sales, CMO, COO, VP of BusDev and President ・ Presently CEO of Tempest Systems, a cutting edge technology-consulting/ advisory firm providing business development services to 100+ hardware and software vendors. Arthur Bierer ・18 years of experience at Microsoft as a Software Developer and Product Guy ・ Built Internet Explorer 1.0 ・ Worked as Windows developer, worked with Anders Hejlsberg on the C# language ・ Founded the NY International Technology Meetup which sponsors monthly events for technologists ・ Founded abDevLabs along with 3 companies in the past year since leaving Microsoft Miles J. Rose ・ Founded siliconalley.com in 1996 ・ Liquidity events: Consumer Search (sold to NYTimes 2006); Squashware software to Adobe ・ Advisor to Oddcast, the Humo Network ・ Guest lecturer at NYU ・ Named to Silicon Alley Top 100 ・ Received Mayor of New York’s citation for hosting WWWAC BizSig meeting during Internet World ・ Featured in articles in New York Times, Wall Street Journal and other business publications 18
  • 19. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSWhy Partner with Us • The only NYC incubator with turnkey services to ensure startup success (Go-to-market strategy, Investor documents, Investor intro and negotiation, Board member selection, Wireframing, MVP design, MVP build, MVP testing, Brand strategy, Marketing strategy, SEO/Social media plan, Business development, Public relations,, Education, Real estate, Legal, Accounting, HR & recruitment) • Proven best practices get things done faster and cheaper • Access to an extraordinary large set of tri-state area angel, VC, institutional and strategic investors • Founders have 50+ years of combined experience • siliconalley.com’s long-standing reputation as a primary influencer of investment capital to NY-based tech companies • Hybrid resource teams and offices (onshore and offshore) 19
  • 20. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSStartup Reality Check 11 out of 12 startups fail. Source: 2011 Startup Genome Infographics But businesses that go through incubators have an 87% success rate (still in business after 5 years) … Source: National Business Incubation Association … and business-heavy founding teams are 6.2x more likely to successfully scale with sales. Source: Genome Report 2012 Alternate version for Page 2
  • 21. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMS Our Best Practices / What We Believe In #3: A Lean Process = MVP Launch in 12 Weeks Week 1 2 3 4 5 6 7 8 9 10 11 12 Wire- framing MVP Design: 2-3 Rounds of Development, Testing & Pivots MVP Testing MVP Launch Brand Strategy Marketing Strategy SEO / Social Media Plan Business Dev. Public Relations Customer Development: Product Development: Project Planning Business Strategy (Go-to-market Strategy, Investor Docs, Intro, Negotiation, Board Members) Support Services (Education, Real Estate, Legal, Accounting, HR & Recruitment) Alternate version for Page 9
  • 22. DRAFT AND CONFIDENTIAL • JANUARY 26, 2013 SAMSOur Way vs. The Traditional Way Alternate version for Page 11