Management presentation on the complex ecosystem necessary for a successful semiconductor startup. Covers key issues: marketing, finacial, legal, PR, funding, and technology.
Part of the MaRS Entrepreneurship 101 series.
An outline of various technology business structures
Speaker: Tony Redpath
Download the audio presentation and post questions on the MaRS Blog:
http://blog.marsdd.com/2006/11/02/entrepreneurship-101-debt-vs-equity/
Part of the MaRS Entrepreneurship 101 series.
An outline of various technology business structures
Speaker: Tony Redpath
Download the audio presentation and post questions on the MaRS Blog:
http://blog.marsdd.com/2006/11/02/entrepreneurship-101-debt-vs-equity/
Defining Achievable Scope for your BI InitiativeJeff Block
This presentation addresses critical principles that will guide the scoping of your BI initiative or project, as well as a single iteration within a project. It was originally presented at the ITA BI round table in February 2009.
Stanford 2012: Building the Entrepreneurial UniversityJack Brittain
Stanford panel focused on how universities are leveraging scholarship to make a difference in the world and the communities in which they are located. This presentation describes the "Utah model" and the changes the University of Utah made to become one of the top public university commercialization programs in the nation.
Entrepreneurs' searching for capital through their network tiesNikos N
A master thesis presentation on entrepreneurship in high tech industry and social networks in relation to the acquisition of funds. The research took place in the Greek semiconductor industry in 2008.
Ken Morse "Innovate or Die" - 22 of March 2012 - ESADECREAPOLIS Esade Creapolis
Open Conference: "Innovate or Die" - 22 of March 2012
Never let a crisis go to waste: today, corporations feel the innovation imperative. But how best to act?
Come hear Ken Morse share his experience on how companies, large and small, can organize themselves to achieve both incremental and radical innovation.
-----------------------------------------------
KENNETH P. MORSE:
• Founding Managing Director, MIT Entrepreneurship Center
• Chair in Entrepreneurship, Innovation and Competitiveness,
Delft University of Technology
• Visiting Professor, ESADE Business School
• Chairman, Entrepreneurship Ventures, Inc.
• Commercialization Advisor, Dynasil Corporation
• Serial Entrepreneur
• Bachelor of Science, MIT
• MBA, Harvard Business School
H3 presentation - 20 Years of Investing in and Operating Technology Companies Jeff Dyment
Experience from the buy-side, sell-side and being an operator of start-ups. Having invested in >40 companies, managed a $400 million portfolio of direct investments and fund investments, started 5 companies, and successfully exited dozens, these are some of the important lessons learned.
The Global Semiconductor Industry
(Computer Chips)
::TABLE OF CONTENTS::
Overview & Background
Global Shifts & Patterns of Consumption
Production Costs & Technology Development
The Role of the State
Corporate Strategies
Case of East Asia
Discussion
Defining Achievable Scope for your BI InitiativeJeff Block
This presentation addresses critical principles that will guide the scoping of your BI initiative or project, as well as a single iteration within a project. It was originally presented at the ITA BI round table in February 2009.
Stanford 2012: Building the Entrepreneurial UniversityJack Brittain
Stanford panel focused on how universities are leveraging scholarship to make a difference in the world and the communities in which they are located. This presentation describes the "Utah model" and the changes the University of Utah made to become one of the top public university commercialization programs in the nation.
Entrepreneurs' searching for capital through their network tiesNikos N
A master thesis presentation on entrepreneurship in high tech industry and social networks in relation to the acquisition of funds. The research took place in the Greek semiconductor industry in 2008.
Ken Morse "Innovate or Die" - 22 of March 2012 - ESADECREAPOLIS Esade Creapolis
Open Conference: "Innovate or Die" - 22 of March 2012
Never let a crisis go to waste: today, corporations feel the innovation imperative. But how best to act?
Come hear Ken Morse share his experience on how companies, large and small, can organize themselves to achieve both incremental and radical innovation.
-----------------------------------------------
KENNETH P. MORSE:
• Founding Managing Director, MIT Entrepreneurship Center
• Chair in Entrepreneurship, Innovation and Competitiveness,
Delft University of Technology
• Visiting Professor, ESADE Business School
• Chairman, Entrepreneurship Ventures, Inc.
• Commercialization Advisor, Dynasil Corporation
• Serial Entrepreneur
• Bachelor of Science, MIT
• MBA, Harvard Business School
H3 presentation - 20 Years of Investing in and Operating Technology Companies Jeff Dyment
Experience from the buy-side, sell-side and being an operator of start-ups. Having invested in >40 companies, managed a $400 million portfolio of direct investments and fund investments, started 5 companies, and successfully exited dozens, these are some of the important lessons learned.
The Global Semiconductor Industry
(Computer Chips)
::TABLE OF CONTENTS::
Overview & Background
Global Shifts & Patterns of Consumption
Production Costs & Technology Development
The Role of the State
Corporate Strategies
Case of East Asia
Discussion
Ultrasonic level sensor Eurosens Dizzi is used for non-contact (non-invasive) level measurement of acoustically transparent liquids. Measurement is done by external echolocation through the bottom of the tank.Innovative design, no tank drilling is required.
The worldwide semiconductor industry: Trends and opportunities 2016 The Broker Forum
The worldwide semiconductor industry: Trends and opportunities 2016
Today, the rapid pace of innovation and ever-expending use of technologically advanced devices including smartphones, tablets, flat-screen monitors, smart connected cars and medical devices is multiplying the number of semiconductor components being used around us every day. Digitization, connectivity and the internet of things (IOT) now promise solid growth for the global semiconductor market.
Discover how you can develop your business by looking at this market infographic from The Broker Forum.
SMEs (small and medium-sized enterprises) invest most of their resources in R&D to produce new technologies. They take higher risks than larger companies, who in contrast focus their R&D efforts on incremental innovations.
Yet, SMEs mostly fail to protect the value they create with patents. When they do, these patents have in general very poor quality and do not adequately protect their core markets. Lastly, SMEs are underserved in terms of legal representation and understandably so: outside law firms tend to find it difficult to work with SMEs, let alone getting paid for their services.
There is a mismatch between the patent value creation potential of SMEs on one hand, and what they actually produce.
Keys to Successful M&A: Transparency, Security, and ProcessSecureDocs
http://www.securedocs.com - Webinar presented by Nat Burgess and co-hosted by The Corum Group and AppFolio SecureDocs. Learn why the current M&A environment is so favorable to tech company owners and CEOs, the “Eight Stages to Optimal Outcome” from Preparation through Integration, and how to leverage new technology to ensure both transparency and security during a transaction.
Cost of Delay: An Economic Approach to Decision MakingRoger Turnau
Cost of Delay is a lightweight approach to feature and product prioritization that asks a simple question: how much does it cost you not to have something? Reinertsen has said that Cost of Delay is the most important thing to quantify when producing a product. Great, but how do you start? How do you assign a dollar amount to something you have not built yet? How do we make sure that our teams focus on building the most important thing right now? This talk will give you the tools you need to understand Cost of Delay, as well as a set of techniques, from simple proxies to more sophisticated real-dollar analyses to help you understand the impact of delays on your organization.
The technical side of raising capital presented at CodeCamp. Cluj-Napoca Romania. A Presentation by: Stefan Koritar, EU Entrepreneur-in-Residence for CCM
This presentation was prepared for the 2010 Australian Innovation festival by Mission HQ. It provides a framework that we utilise in consulting engagements for the valuation of technology based intellectual property.
Different Types of Entrepreneurship - Entrepreneurship 101 (2012/2013)MaRS Discovery District
This lecture describes different types of business structures. We discuss some of the early questions that an entrepreneur must ask before committing to a business:
* Will your business be a for-profit enterprise, a not-for-profit or somewhere in between?
* What are the different requirements and resources necessary for your selected enterprise model?
* What type of financing should you target: equity, debt, grant funding or a combination of all three?
090602 Isto Overview And Conformity Assessment Lefkin
Ecosystem Environment for Starting a Semiconductor Company
1. Ecosystem Environment for Starting a
Semiconductor Company
DesignCon 2008
February 5, 2008
Financial
Marketing PR
Founder
Legal Funding
Technology
The Internet Channel for Semiconductor Entrepreneurs and Investors
2. Startup Ecosystem Panel
Steve Szirom Steve Bengston
Senior Analyst, InsideChips Director, Emerging Ventures Practice,
President, HTE Research
PriceWaterhouseCoopers
Lucio Lanza Glen Balzer
Managing Director, President,
Lanza techVentures
New Era Consulting
Dave Guzeman James Prenton
President, Partner,
Mindpik
K&L Gates
2
3. 2007 World Electronics Markets
2007 World Electronics Markets
Worldwide Markets
WW GDP $48,000B
Total Electronics
100.0%
$1,765B
Semiconductors
14.3%
$252B
Consumer Electronics
8.2%
$145B
Semi Equipment
2.4%
$42B
Semi Materials
2.3%
$41B
EDA 0.3%
$5.6B
Source: InsideChips.com
3
4. Ecosystem: Legal
• Pre-incorporation: employer issues,
NDA/confidentiality/IP issues, founders
agreements
• Incorporation package, form of equity
• Added value
– May have synergistic relationships/network
– Adds credibility for potential investors
4
5. Ecosystem: Technology
• EDA tools and IP core partners
• Design team strategy and formation
– Architecture, circuit design, software, algorithm, compiler
– WW design teams
• China, Taiwan (multimedia, consumer)
• India (software, tools)
• Central Europe (software, algorithm)
• Israel (DSP)
• Russia (algorithm, mathematical)
• Reference design customer partner
• Wafer fab, test, assembly partners
5
6. Ecosystem: Marketing
• Marketing objectives, strategies and tactics
• How big/where is the market today and in five years
– Key customers
– Product definition, segmentation
– Price trends
• Key reference/development customer relationships
• Sales and market forecasts
• Competitive landscape, unique differentiators
• International strategy
6
8. Ecosystem: Public Relations
• Sets the stage for company’s external image/visibility
– Investors, customers, partners, distributors/reps, others
• Company name, logo and brand
– Memorable, what does it mean, domain available, lasting,
original, craft a unique and visionary story for the new venture
• Web site design and content
– Drives the company image worldwide (big bang for the buck)
• Create and increase the “buzz” level as appropriate for
stage of company
8
9. Ecosystem: Public Relations
• Use “guerrilla” tactics to stretch limited $$$
• Use combination of external and internal
resources
• Combine various elements, have an integrated
marcom plan for various stages of growth
• Think globally, act locally
• Do it right the first time!
9
10. Craft A+ Communications
Financial
Marketing PR
Founder
50 pages
Legal Funding
Business Plan
5 pages
Design
Exec Summary
15 minutes
Short Pitch
2 minutes
Elevator Pitch
Credibility
+
Potential
10
12. Key Success Factor: Founder/CEO
• Organize founding team, expectations, share agreements, vision
• Experience (ideal) in development, operations, marketing, and
finance, such as business unit director of mid-large chip maker
• Ethics/integrity, creativity, adaptability, persistence, intelligence,
experienced, moderate ego
• Wisdom to turn reigns over to seasoned management
• Openness in internal and external matters
• Energy and drive to thrive in resource constrained environment
• Act as coach and therapist in early tough going
“Startups fold or perform poorly as a
result of CEO failure more often than
any other single cause”
NEXT
12
13. Top 5 Legal Issues for Semiconductor Startups
James Prenton
james.prenton@klgates.com
14. #5 – Effect of Employment Agreements
ASSUMPTION: I possess all ownership rights to an idea I conceive
or develop.
ASSUMPTION: I own all inventions that I develop entirely on my
own time without using my employer’s equipment, supplies, facilities
or trade secret information.
ASSUMPTION: My employer wasn’t interested in my idea so I can
pursue development.
FACT: Potential investors will carefully examine IP ownership to avoid buying
into a lawsuit. Certain market segments are notorious for litigation against
former employees. When in doubt, seek guidance!
15. #4 - Timing and Form of Entity
Timing:
Dictated by need to memorialize ownership of the business by the founders, sign
contracts with third parties, secure IP ownership in the Newco, adopt and use
incentive stock plans and set the stage for investments.
Delay may result in: (a) dispute among founders (“forgotten founder”), (b)
uncertainty over IP ownership and (c) adverse tax consequences when founders
try to acquire shares at a nominal price (“cheap stock”).
Form of Entity: Corporations over LLC
LLCs – Ease in legal maintenance and can be taxed as partnership (losses and
gains of business flow through the members’ individual 1040 returns). However,
(a) VCs will not invest in an LLC, (b) stock options are not available as
incentives, and (c) cannot be acquired tax-free in a stock acquisition exit.
Corporations – Sophisticated investors will prefer corporate form. Employees,
consultants and advisors will appreciate familiar stock-based incentive plans.
More alternatives for successful exit.
16. #3 - Ensure Company Owns IP
EMPLOYERS. Ensure former and current employers of founders,
consultants and advisors will not have a claim against the
company’s IP.
FOUNDER(S). Individual ownership of idea is not the same as
ownership by the company. Each founder must assign their rights
to the idea to the company.
CONSULTANTS/EMPLOYEES. Ensure agreements with third
party developers and employees expressly requires assignment of
intellectual property to the company.
FACT: Company ownership of IP is one of the key areas investors
will focus on when conducting investment due diligence.
17. #2 - Manage Equity Carefully
Founder Allocation – Difficult to discuss as friends or colleagues. Consider
contributions by each and agree in writing. Assumptions and delays re:
contributions and equity percentage problematic.
Repurchase Right – Ensure shares subject to company’s repurchase right
which lapses over time (vesting schedule). Provides incentive for founders to
remain with the company.
Right of First Refusal – Give company and other shareholders right to acquire
shares in the event of a proposed share transfer. Helps avoid unwanted
“partner” from joining.
Securities Law Compliance – Offering and selling securities highly regulated.
Failure to comply can create liabilities and limit ability to raise capital in the
future.
Avoid Promise to Issue Percentage of Shares. Promises to give certain
percentage of shares to consultants and employees can be problematic. Best
to document and agree in terms of number of shares. Any cloud over stock
ownership will jeopardize the success of a potential fundraising.
18. #1 - Seek Help from Experienced Advisors Early!
Experienced entrepreneurs, lawyers, accountants, consultants and
investors can offer valuable advice to assist in the development of
your new startup.
Many investors rate judgment of entrepreneurs by their choice of
the advisors.
Certain advisors will offer promising startups special arrangements
which may include a combination of reduced rates, fee deferral or
equity ownership.
Silicon Valley: a unique concentration of the key components
necessary for a startup to succeed. Take full advantage of what the
environment has to offer!
Dave Guzeman, President, Minkpik
20. Starting Up…
What to do on Day One
Marketing & Sales
Strategies and initial roadmap set by founders and
thrashed out in business plan
Critical to have all six Big-M Marketing functions explicitly
assigned to people
One of the founders should be VP Marketing / Sales
Identify six target customers… call them and share that
with them
Have a plan for achieving financial credibility… why
should customers feel safe betting their companies on
you?
21. Big-M Marketing
Executing the Complete Marketing Function
Driving the Products – Product Marketing
Making the Market – Tactical Marketing
Entering Orders – Order Entry / Customer Service
Creating a Buzz – Promotional Marketing
Working the Technical Community – Technical Marketing
Developing Strategies – Strategic Marketing
Intel at $50M had Product Marketing, Tactical Marketing,
Promotional Marketing, and Order Entry
Intel at $100M had added Strategic Marketing and
Technical Marketing
22. The Intel Startup Model
Sell memory chips to IBM and the Seven Dwarfs
Limited direct sales force – total 12 direct sales people at
$100M – leverage reps and distributors
When you know someone’s home phone number… don’t
advertise to them… call them! Top company salesman
was Bob Noyce
Use Noyce, Moore, and Art Rock (VC) to gain credibility
Marketing & Engineering driven
Extensive publicity campaign
Even at $100M, marketing headcount was still 3 times
sales headcount
23. The Pitfalls
The more earthshattering and revolutionary your product
is, the more important it is to have financial credibility
Don’t skimp on promotional marketing in the early days –
outsource it and buy great stuff
The more complex your product, the more important
product marketing becomes
It takes as long to develop a sales channel as to do your
chip… and costs about the same
Sales channels are driven by relationships… even though
your company is young you need to hire a sales manager
with 20 years of relationships
Customers and contract manufacturers are working to
prevent you from selling proprietary products
24. Build it and they will
come… hahahaha
I don’t know who you are.
I don’t know your organization.
I don’t know your service or product.
I don’t know what you stand for.
I don’t know your customers.
I don’t know your track record.
I don’t know your reputation.
Now, what was it you wanted to sell
me?
25. What has changed?
WWW – the world’s largest flea market
Killed most printed tech publications
Zero printing costs for web-based tech literature
Still have layout costs plus web programming costs
Works well when people know who you are and search by
company name
Disappearance of printed publications has made it harder –
not easier – to get attention
Sales reps are harder to find and much more
expensive to sign
Distributors are disappearing – replaced by CM’s…
contract manufacturers and you need a “Fast Eddy”
to deal with them
NEXT
26. Creating a Sales Presence
Glen Balzer, President, New Era Consulting
glenbalzer@msn.com
27. Creating a Sales Presence
• Avoid Exclusive Arrangements in your
sales channel
28. Creating a Sales Presence
• Avoid Exclusive Arrangements in your
sales channel
• Build Direct Sales only when necessary
29. Creating a Sales Presence
• Avoid Exclusive Arrangements in your
sales channel
• Build Direct Sales only when necessary
• Cause and Convenience – Always reserve
the opportunity to terminate a channel partner
for cause and convenience
30. Creating a Sales Presence
• Avoid Exclusive Arrangements in your
sales channel
• Build Direct Sales only when necessary
• Cause and Convenience – Always reserve
the opportunity to terminate a channel partner
for cause and convenience
• Due Diligence – must be performed
seriously
31. Creating a Sales Presence
• Avoid Exclusive Arrangements in your sales
channel
• Build Direct Sales only when necessary
• Cause and Convenience – Always reserve the
opportunity to terminate a channel partner for
cause and convenience
• Due Diligence – must be performed seriously
• English Language Skill in a foreign market is
not very important
Steve Bengston, Director, PwC
34. MoneyTree Total Investments: 1980 – YTD Q3 2007
Annual Venture Capital Investments
($ in billions)
1980 to YTD Q3 2007
$105.1
$120
$100
$80
$54.1
$60
$40.6
$40
$26.4
$23.0
$22.4
$21.9
$21.8
$21.1
$19.7
$14.9
$11.3
$20
$8.0
$4.1
$3.7
$3.3
$3.3
$3.3
$3.5
$3.0
$3.0
$2.8
$3.0
$2.8
$2.2
$1.6
$1.2
$0.6
$0
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
D6
07
Y T 200
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
November 2007
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
Slide 3
based on data from Thomson Financial
35. Investments by Region: Q3 2007
Upstate NY
New England
$31.5
Northwest $998-14%
12 Deals
$290.6 119 Deals
47 Deals
Sacramento/N. CA
NY Metro
$14.5 North Central $385-5%
2 Deals $111.0 57 Deals
17 Deals
Philadelphia Metro
Silicon Valley
$238.3
$2,485-35% Midwest
Colorado 26 Deals
287 Deals $343-5%
$196.6 45 Deals
24 Deals
LA/Orange County DC/Metroplex
$425-6% $331-5%
Southwest South Central
56 Deals 34 Deals
$134.2 $19.2
23 Deals
San Diego 7 Deals Southeast
$359-5% $353-5%
37 Deals Texas 52 Deals
$386-5%
39 Deals
KAU AI
AK/HI/PR NIIHA U
O AHU
$4.1 MOLOKAI
MA UI
LANAI
3 Deals KAHOOLA WE
HA W AII
Q3 2007 Total Investments - $7,104 in 887 Deals
November 2007
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
Slide 4
based on data from Thomson Financial
36. Investments by Industry: Q3 2007
($ in millions)
$1,108.1
Software
$1,091.2
Biotechnology
$920.6
Industrial/Energy
# of % Change $
$825.5
Medical Devices and Equipment Industry
Deals from Q2 ’07
$585.1
Telecommunications Software 187 -27.18%
Biotechnology 99 -10.04%
$513.2
Semiconductors
Media and Entertainment 96 9.68%
$508.5
Media and Entertainment Industrial/Energy 83 69.42%
Medical Devices and Equipment 76 -19.86%
$353.9
IT Services
Telecommunications 74 13.56%
$289.1
Networking and Equipment Semiconductors 55 12.19%
IT Services 51 44.7%
$280.2
Financial Services
Financial Services 31 420.22%
$194.7
Business Products and Services Networking and Equipment 29 -22.16%
Business Products and Services 23 -2.59%
$152.8
Electronics/Instrumentation
Electronics/Instrumentation 21 -1.95%
$96.3
Healthcare Services Consumer Products and Services 20 -65.91%
Healthcare Services 15 251.14%
$87.7
Computers and Peripherals
Computers and Peripherals 13 -41.07%
$57.3
Consumer Products and Services Retailing/Distribution 13 -56.89%
Undisclosed/Other 1 -100.00%
$40.0
Retailing/Distribution
TOTAL 887 -1.43%
$0.0
Other
NM = Not Meaningful
$0 $900 $1,800
Q3 2007 Total: $7,104 in 887 Deals
Visit www.pwcmoneytree.com for Industry definitions
November 2007
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
Slide 5
based on data from Thomson Financial
37. Investments by Stage of Development: Q3 2007
($ in millions)
Later Stage $2,976.4
Expansion $2,718.5
% Change in
# of
Stage of Development $ Amount
Deals from Q2 2007
Early Stage $1,185.3
Expansion Stage 294 16.00%
Later Stage 288 -7.07%
Early Stage 213 -17.54%
Startup/Seed 92 0.29%
Startup/Seed $224.0
Total 887 -1.43%
$0 $1,000 $2,000 $3,000
Q3 2007 Totals: $7,104 in 887 Deals Last
November 2007
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
Slide 6
based on data from Thomson Financial
38. Questions and Discussion?
• Steve Szirom, InsideChips (www.insidechips.com)
– Marketing, PR, business, international, strategy
• Lucio Lanza, Lanza techVentures
– Incubation, venture capital, VC trends, other
• Dave Guzeman, Mindpik (www.mindpik.com)
– Marketing, other
• Glen Balzer, New Era Consulting (www.neweraconsulting)
– Sales, distribution, international, other
• Steve Bengston, PriceWaterhouseCoopers (www.pwc.com)
– Financial and accounting issues
• James Prenton, K&L Gates (www.klgates.com)
– Legal issues, founders’ agreements, incorporation, employment issues
The Internet Channel for Semiconductor Entrepreneurs and Investors