This document provides an overview of entrepreneurship and the startup ecosystem in Pittsburgh, Pennsylvania. It discusses the different types of startups, including lifestyle businesses and high-growth investment/exit companies. It then describes the various players that support startups such as incubators, accelerators, and government agencies. The document outlines common funding sources for startups, including angels, venture capitalists, crowdfunding, and various public and private sector funds. Finally, it maps out Pittsburgh's innovation community that provides resources, mentoring, funding and support for entrepreneurs and startups.

1. Entrepreneurship 101
Kit Needham

2. Not all Startups are the Same
Small Business/Life-Style
Ø Known business
examples to learn from
Ø Funded by banks or
stockholders
Ø Business plan
Ø Sustain a particular
level of income
Ø Provide dividends or
increased stock price
Investment/Exit
Ø Untested business
model with a high
degree of uncertainty
Ø Funded by investors
(angels and VCs)
Ø Business model
Ø Grow big quickly and
sell (exit)
Ø Provide a 5x-10x return
to the investors

3. The Players
• Incubators
• Accelerators
• TBEDs

4. Incubators
• Where the commercialization plan
‘hatches’
– Mentoring/coaching/guidance
– Access to materials
– Introductions to advisors, domain expertise
– May provide space
– May provide micro-grants
• Goal – get initial seed funding

5. Pittsburgh: A Community of Innovation
FOR INVESTMENT/EXIT START-UPS
Idea
Development
Startup Early Growth Rapid Growth EXIT
UNIVERSITIES
leveraging$$billion$$researchand
studentinnovation
O
L
Y
M
P
U
S
Incubators
I F
D O
E U
A N
D
R
Y
I I
N N
N S
O T
V I
A T
T U
I T
0 E
N

6. Accelerators
• Fixed term, cohort-based programs
– Provide mentorship and educational
components
– Highly competitive to get in
– Get seed investment ($20k-$50k) in exchange
for equity
• Goal – “Demo Day” to attract follow-on investment
• Examples: AlphaLab/Gear, Idea Foundry, Tech
Stars, Y Combinator, DreamIt Ventures, etc

7. Pittsburgh: A Community of Innovation
Idea
Development
Startup Early Growth Rapid Growth EXIT
UNIVERSITIES
leveraging$$billion$$researchand
studentinnovation
O
L
Y
M
P
U
S
Incubators
I F
D O
E U
A N
D
R
Y
Idea Foundry
HEALTHCARE &
LIFE SCIENCES
ENTERTAINMENT &
EDUCATION
SOC. ENTERPRISES
WATER
AlphaLab
SOFTWARE
AlphaLab Gear
HARDWARE &
ROBOTICS
THRILLMILL
DemandCo
I I
N N
N S
O T
V I
A T
T U
I T
0 E
N
ACCELERATORS

8. Pittsburgh: A Community of Innovation
Idea
Development
Startup Early Growth Rapid Growth EXIT
UNIVERSITIES
leveraging$$billion$$researchand
studentinnovation
O
L
Y
M
P
U
S
Incubators
I F
D O
E U
A N
D
R
Y
Idea Foundry
HEALTHCARE &
LIFE SCIENCES
ENTERTAINMENT &
EDUCATION
SOC. ENTERPRISES
WATER
AlphaLab
SOFTWARE
AlphaLab Gear
HARDWARE &
ROBOTICS
THRILLMILL
THINKTIV
PITTSBURGH
LIFE SCIENCES GREENHOUSE
INNOVATION
WORKS
IT
MEDICAL
DEVICES
I I
N N
N S
O T
V I
A T
T U
I T
0 E
N
ACCELERATORS Idea
Foundry

9. MONEY/FUNDING
Investors
• INVESTORS
– FRIENDS & FAMILY (& FOOLS)
– CROWDFUNDING
– ANGELS and ANGEL GROUPS
– SUPER ANGELS
– VENTURE CAPITALISTS

10. Angels vs VCs
Angels
Ø High net-worth
individuals i.e. their
own money)
Ø Tend to invest locally
Ø Tend to invest early
($25k - $50k)
Ø Often form Angel
Groups to research and
co-invest in deals (e.g.
BlueTree)
Venture Capitalists
Ø Create a fund using
other people’s money
Ø Seek deals from
everywhere and often
require them to relocate
nearby

11. Angels: Majority of Startup Funding
• $22.5B
• ~66,000 deals
• 42% seed/startup
• 55% early stage
• ~ 318,500 individuals
Angel Investors 2011
• $29B
• ~3,750 deals
• 3.5% seed/startup
• 68% later/expansion capital
• Total 791 firms (not all active)
Venture Capital 2011
Sources: UNH Center for Venture Research, PwC MoneyTree and NVCA
$9.5B
$12.4B
$0.45B* $0.22B*
$1.0B
$8.4B
$9.8B $9.9B
*es$mated

12. MONEY/FUNDING
Terms
Terms
- Seed Funding
- Series A, B, etc.
- Valuation
- Convertible Debt
- 10x return
- Exit (Sale or IPO – Initial Public Offering)

13. People
• Steve Blank – 4 Steps to Epiphany
“Get out of the building”
• Eric Reis – The Lean Startup
– MVP (Minimal Viable Product)
– Feedback Loop
Build
Learn Measure

14. People and Terms
• Steve Blank – “Get out of the building”
• Eric Reis – “The Lean Startup”
• Business Model Canvas

15. Pittsburgh: A Community of Innovation
Funding for investment/Exit Startups
Idea
Development Startup Early Growth Rapid Growth EXIT
*FEDERAL
GOVERNMENT
Funds research
FEDERAL GOVT
SBIRS/STTRs
Funds startups
STATE: DCED
Funds IW and subs, PLSG
*FOUNDATIONS
Funds startups
ANGELS
BlueTree Allied Angels
Keiretsu Forum
Funds startups
VCs: Adams, Birchmere,
PEP, Draper, etc.
Funds startups
FUNDING
Local: URA
Funds Startups
PUBLIC
SECTOR;
PRIVATE
SECTOR
CROWD
FUNDING

16. Pittsburgh: A Community of Innovation
LifeStyle and Investment/Exit Startups
Idea
Development Startup Early Growth Rapid Growth Maturity
Chatham’s Center for Women’s Entrepreneurship (CWE)
(CWESmall Business Development Centers- Pitt; Duquesne
Innovation Practice Institute –Pitt Law
School (Start Smart) with CMU
Education

17. Pittsburgh: A Community of Innovation
LifeStyle and Investment/Exit Startups
Idea
Development Startup Early Growth Rapid Growth Maturity
Chatham’s Center for Women’s Entrepreneurship (CWE)
(CWESmall Business Development Centers- Pitt; Duquesne
Innovation Practice Institute –Pitt Law
School (Start Smart) with CMU
Education Mentoring
SCORE
CWE
Powerlink
IEE - Pitt

18. Pittsburgh: A Community of Innovation
LifeStyle and Investment/Exit Startups
Idea
Development Startup Early Growth Rapid Growth Maturity
Chatham’s Center for Women’s Entrepreneurship (CWE)
(CWESmall Business Development Centers- Pitt; Duquesne
Innovation Practice Institute –Pitt Law
School (Start Smart) with CMU
Education Mentoring
SCORE
CWE
Space/Support
Services
Riverside Center for Innovation
Revv I, II, III?
Startup Town
The Beauty Shop
Former Paramont Studio
Powerlink
IEE - Pitt

19. Pittsburgh: A Community of Innovation
LifeStyle and Investment/Exit Startups
Idea
Development Startup Early Growth Rapid Growth Maturity
Chatham’s Center for Women’s Entrepreneurship (CWE)
(CWESmall Business Development Centers- Pitt; Duquesne
Innovation Practice Institute –Pitt Law
School (Start Smart) with CMU
Education Mentoring
SCORE
CWE
ResourcesSpace/Support
Services
Riverside Center for Innovation
Pgh Tech
Council
Tech Shop
Revv I, II, III?
Startup Town
The Beauty Shop
Former Paramont Studio
Powerlink
IEE - Pitt

20. Q&A
kit@cs.cmu.edu

21. Pittsburgh: A Community of Innovation
FOR INVESTMENT/EXIT START-UPS
Idea
Development
Startup Early Growth Rapid Growth EXIT
UNIVERSITIES
leveraging$$billion$$researchand
studentinnovation
O
L
Y
M
P
U
S
Incubators
I F
D O
E U
A N
D
R
Y
Idea Foundry
HEALTHCARE &
LIFE SCIENCES
ENTERTAINMENT &
EDUCATION
SOC. ENTERPRISES
WATER
AlphaLab
SOFTWARE
AlphaLab Gear
HARDWARE &
ROBOTICS
THRILLMILL
THINKTIV
PGH LIFE SCIENCES GREENHOUSE
INNOVATION
WORKS
IT
MEDICAL
DEVICES
I I
N N
N S
O T
V I
A T
T U
I T
0 E
N
ACCELERATORS
GOVERNMENT FED
SBIRS
STATE
DCED
FOUNDATIONS
ANGELS
BlueTree Allied Angels
Keiretsu Forum
VCs: Adams, PEP,
Birchmere, Draper,
FUNDING