On December 2nd, 2010 the Michigan Energy Forum will present its Year in Review discussion panel and networking event, “Models for Generating New Energy Businesses.” The panel will provide an overview of the various clean-tech technologies discussed throughout 2010 and highlight promising points of entry for entrepreneurs and expanding businesses. The panel will discuss the confluence of attractive energy technologies, public policy shifts, and sources of private funding, as well as successful models for generating new business opportunities in the clean tech space. • What were the highlights from the last year of MEF, any updates on panelists? • What have been the most important enablers in terms of technology and public policy that we should be aware of? • What’s being funded, where is the money going? • After being inspired to generate a new clean tech venture, what are my next steps? • For audience and panelists: what do you need from the MEF in 2011 to generate traction?

1. Michigan Energy Forum
Dec 2, 2010
Kurt Riegger
Managing Director
Business Engines
Dec 2, 2010

2.  Managing Director, Business Engines, a Midwest
Venture Catalyst and Investment firm
 Previously Venture Partner, North Coast Technology
Investors - $100M VC Fund in Ann Arbor
 Prior Companies
◦ COO, Intelliseek an Inc 500 company (acq AC Nielsen div)
◦ COO, WorkWell Health and Safety (acq Liberty Mutual)
◦ President, Systems and Software (acq CommerceOne)
 20 years of Board experience
 Raised $35M in capital and 6 significant M&A
transactions
 Education – University of Michigan, dual BS
Dec 2, 2010

3.  The fundamental question: what is the unmet
need?
 Who approves the purchase and signs the
check?
 How does this person measure value for your
product or service?
 Most customers have different preferences
than you might expect – ask them.
Dec 2, 2010

4.  Develop a clear vision and strategy around
customers and validated value
 Write and review the Plan
 Does the team believe and can achieve plan?
 Validate the Plan with key stakeholders
 Choose reasonable milestones
 Hit your milestones; behave like a public
company
 No Excuses Execution
Dec 2, 2010

5.  Engage One Key Advisor
 Find strategic partners or distribution
partners to propel you into the market
 Build an advisory board or board of directors
who can add real value
◦ Experienced
◦ Engaged
◦ Frank
Dec 2, 2010

6.  What are your strengths?
 Define your culture and values
 Find complementary team members
 Define roles and have clear measures
 Ensure alignment and share success
 Hire carefully; Fire more quickly than you
would like.
Dec 2, 2010

7.  Passion, urgency, energy, vision, disciplined,
persistent, following through
 Sharing information, praise/credit, equity
 Win-Win deals but stretching to what may not
seem to be possible initially.
 Fair but tough; motivate not denigrate
 Ask why, do your diligence, look carefully
 Integrity/Ethics the front page WSJ test
 Leader = teacher
Dec 2, 2010

8.  Have a story
◦ ‘About’ paragraph
◦ Practice so everyone can tell it
◦ Tell it often via public relations and social media
 Identify thought leaders and potential king-
pin customers
 Commit to engaging people and updating
 Network in related industries and across
geography to find talent, customers, cross
pollination of products
Dec 2, 2010

9.  Early product development with Grants
 Engage customers early; co-opt customer
partners
 Don’t worry about valuation; choose the right
source of capital and value add partner
 Raise capital when you have a defined
product which can be sold and scaled.
 If raising $5M, can you be a $50M valuation
business?
Dec 2, 2010

10.  A+ Leadership; passionate founders team
 Large, fast growing, underserved market
Leverage network effects for adoption
Building authoritative, trusted brand
Obsess on customer experience (Wow!)
 Reasonable Financings
Pre-money is not most important thing
 Sense of Urgency
 Missionaries, not mercenaries
Commitment to technical, market excellence
Dec 2, 2010

11. Factor Angels Entrepreneurs Venture Capitalist
Pts Rank Pts Rank Pts Rank
Quality of management 7.1 1 5.5 1 5.4 1
Growth potential 4.7 2 5.4 2 4.2 4
Barriers to competitive entry 4.2 5 5.4 2 4.1 7
ROI 3.9 7 5.3 4 4.2 4
Competition 4.0 6 5.3 4 4.2 4
Proprietary (unique) product 4.4 3 5.1 6 4.4 3
Size of market 4.3 4 5.1 6 4.6 2
Stage of development of the company 3.7 9 5.1 6 3.8 8
Industry the company is in 3.8 8 4.9 9 3.6 9
SOURCE: Profit Dynamics, Inc., Fountain Hills, AZ, March, 2002
Dec 2, 2010

12. Mistake Angel Investors Entrepreneurs Venture Capitalist
Unrealistic projections 32% 8% 21%
Weak analysis of 32% 16% 18%
market/competition
Not realistic about 24% 27%
challenges
Incorrect valuation and 12% 10%
exit strategy
Lacking clarity 16% 17%
Incomplete 15% 8%
Management weak 4% 8%
Mistakes and errors 10%
Other 4% 18%
SOURCE: Profit Dynamics, Inc., Fountain Hills, AZ, March, 2002
Dec 2, 2010

13.  GLEQ coaches and educational material: gleq.org
 Small Business Tech Development Center: sba.gov/sbtdc
 SmartZones across the State- SPARK, TechTown, AAlley
 ACE Event – Jan 31, 2011 www.ace-event.org
 StartupNation.com
 Michigan Venture Capital Association: michiganvca.org
 Experienced entrepreneurs; SCORE, retired CEOs
 Angels – Ann Arbor, Great Lakes, Grand, Blue Water,
CoreNetwork
 Professionals such as attorneys, accountants, PR firms
Dec 2, 2010

14. Dec 2, 2010

15.  Management Team
◦ Committed and accomplished team members
◦ Compelling vision for a company not just product
 Solving real problems customers understand and
care about
 Business model that generates 60% gross
margins
 Clear path to the market and reasonable costs to
acquire customers
 World class technology/solution
◦ Protected by patent/copyright/trade secret
◦ Published and accepted
Dec 2, 2010

16.  Great Company
◦ unique product, great management, timely
 Reasonable Valuation
◦ Suitable returns for the stage and risks
 Strong Capital and Exit markets
◦ Weak from Sept 2008 until early 2010
 Suitable geography, sector & stage for the
Investor
 Great chemistry between management team
and investors – share the vision; values
 Agreement on terms
Dec 2, 2010

17.  Viable choice and for some businesses the
Only Choice
 Half of the Inc 500 built with less than $50K
 Creates a sense of urgency and customer
focus
 May cause undue hardship and frustration
 Capital intensive businesses will require
strategic partners to launch.
Dec 2, 2010

18.  Someone who wants to buy your product or
services or have access to your technology
◦ Motivated by a competitive advantage
◦ May want an exclusive field of use relationship or
additional rights to buy the product for reduced prices
 Could be a customer, a vendor or even a
competitor
 Focuses the firm on generating revenue for
customers with the problem you solve. May
be a distraction if not careful and could
preclude future markets.
Dec 2, 2010

19. Successful high-tech entrepreneurs
recognize that you cannot control your
fate by controlling your company. You
control your fate by controlling your
market. Once an entrepreneur focuses on
gaining control of his or her market, all
other desired outcomes follow.
Professor William F. Miller, Stanford
Graduate School of Business
Dec 2, 2010

20. Dec 2, 2010