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Va Overview Winter 2011
- 1. CFO and FinancialAdvisory Services For Early Stage and Rapidly Changing Companies W W W . V E N T U R E - A D V I S O R S . C O M
- 2. Venture Advisors We build, run and support finance organizations for leading start-up, early stage and rapidly changing What We Do companies… Some of Our Clients Some of the Investors Who Value Us VENTURE ADVISORS 2
- 3. Overview • Founded in 2002 • We have provided CFO and financial advisory services to 200+ companies • Unique expertise in rapidly changing industries • Software and Services • Biotech/Pharma • Internet • Medical Devices • Mobile / Wireless • Medical Diagnostics • Semiconductor • Retail / Consumer • Data Center Technologies • Clean Tech • Strong reputation for quality and integrity within investor and technology community • High quality and seasoned team of professionals • Extensive public and private company experience • Highly skilled in critical transactions (capital formation, mergers and acquisitions, IPOs) • Integrated team of full-time VA professionals at CFO, VP Finance and Controller levels VENTURE ADVISORS 3
- 4. Our Role We serve as a turnkey finance solution for early stage and rapidly changing companies, allowing companies to better focus their efforts and resources on product development, service delivery and sales/marketing activities… Research & Development, Junior Operations, Manufacturing Accountant Controller VP Finance CEO CFO Sales, Marketing, Business Development Capital Advisory / M&A Audit Support Specialist VENTURE ADVISORS 4
- 5. Models for Buildingthe Finance Function In building and optimizing a Company’s finance team, companies can best scale their financial operations over time with Venture Advisors on a cost- effective basis versus other alternatives… SOLE FULL TIME VENTURE PRACTICIONERS EQUIVALENTS ADVISORS Breadth of Limited Limited Extensive Experience Cost Variable Fixed Variable Scalability Low Low High Network Low/Medium Low/Medium Extensive Purchasing Power Low Low High VENTURE ADVISORS 5
- 6. How to EngageUs Part Time Team Interim Team Tactical Support Tactical Support (Company Side) (Investor Side) Function & Roles • Part Time CFO • Full Time CFO Augment existing finance Provide additional CFO Assumed • Part Time VP Finance • Full Time VP Finance team to provide level support for financial • Part Time Controller • Full Time Controller additional bandwidth due diligence on • Part Time Junior • Full Time Junior and/or specialized prospective investments Accountant Accountant expertise • audit support • capital formation • IPO preparation • mergers and acquisitions • valuation Pricing Model • Variable • Variable • Variable • Variable (cash /equity) • Fixed • Fixed • Fixed (cash /equity) • Success Based Bonus Value to Client Access to a broader Access to high Access to high quality Deeper dive on financial range of services / quality finance finance professionals due diligence to expertise with costs professionals in to support critical uncover potential issues better matched to times of transition events more quickly and actual resource / urgent need develop appropriate usage post investment strategies VENTURE ADVISORS 6
- 7. Our Responsibilities Execute Day-to-Day Accounting / Review/ Establish Policies Report Plan Finance Transactions • Cash management • Customer order fulfillment • Billings • Monthly financials / • Pipeline analysis and reporting package review of • Banking & investment policies • Pricing model & contract reviews • Cash collections financials/plans • Board reporting • Cash disbursement policy and • Sales force training • Accounts payable • Budgeting process approvals • Management dashboards / • Credit policies • Payroll specialized metrics • Analysis of capital • Investment policies • Accounting • Benefits requirements • Annual reporting • Expense and operational control • Reporting / system requirements • Accounting close • Infrastructure planning • Purchase order system and • Revenue recognition • Audit preparation and • Headcount forecasting approvals support • Fixed asset policy • Forecasting and • T&E policy budget templates • IP, intangibles and software • Supplier / partner relationships capitalization • Cash burn analysis • Vendor agreements • Capitalization tables • Licensing agreements • Option & stock grants • Compensation structuring • 409A & 123R compliance Manage Service Providers • Audit / • Benefits • Commercial • Insurance • Investment • Legal • Lending • Payroll • Real Estate • VCs / Taxes Banking Banking Investors Prepare for and Execute Critical Strategic Financial Transactions • Equity capital raise • Debt capital raise / • Sell-side M&A activity • Buy-side M&A activity • Diligence and valuation support Working capital facilities VENTURE ADVISORS 7
- 8. VA SmartStart –The Early Stage Solution VA SmartStart addresses the very specific needs of new startups and seed stage companies in order to provide basic financial infrastructure in the most cost-effective manner possible… 1 Launch 2 Operate 3 Grow • Conduct business and financial due • Client is provided with pre-paid • Monthly CFO review to assess diligence to understand client’s mailers in which all bills, invoices and risk and long-term path needs and objectives statements are sent to VA • Access to specialized skill sets • Establish reporting calendar and • VA scans documents into a digital archive for more complex and/or • Transactions are processed in QuickBooks timeframes Enterprise strategic activities • Define working relationships • VA provides all accounting, processing • Equity financings • Credit facilities and reporting services • Mergers and acquisitions • Begin onboarding / setup process • Budgeting / forecasting • Invoices • Compensation planning • A/R • Strategic relationships • Payments • Identifying and implementing • Financial reporting emerging accounting standards • Budgeting • Negotiating with service providers • Real estate planning Best Positions Company to Raise Effective Financial Timely, Accurate and Capital and Capitalize on Growth Compliance Cost-Effective Accounting Opportunities VENTURE ADVISORS 8
- 9. Benefits of aPart Time Finance Team Early stage companies can preserve significant cash resources by matching the variable cost paid for finance infrastructure to their actual needs and required utilization… VENTURE ADVISORS 9
- 10. VA Audit Supportand Preparation Through our technical expertise and resources, we allow early stage, middle market and public companies a means to increase the quality and speed of their audit support and preparation process on a cost-effective basis. Audit Coordination • Full coordination and execution of all audit communication, planning and interaction with external auditors • Preparation of audit ready work papers, financial statements and notes to the consolidated financial statements • Debt, equity and stock option roll forward and all related footnote disclosures Detailed Disclosure Calculations - Examples • Stock compensation and other equity based payments • Foreign currency accounting • Warrant accounting • Revenue recognition • Purchase price allocation, accounting and disclosures • Cumulative unpaid dividend calculations VENTURE ADVISORS 10
- 11. Advisory Services Equity Capital Advisory Credit Facilities and Venture Debt Our team has extensive experience in raising institutional venture We have extensive experience in evaluating, structuring and negotiating a capital. Our access to venture investors is unparalleled since we broad range of capital resources including lines of credit, lease lines, venture actively work with a wide range of venture capital firms who trust us to debt and equipment financing. run their portfolio companies financial operations post-investment. In • Identify and evaluate optimal financing structures & sources assisting our clients, we • Develop marketing and diligence infrastructure required to support the transaction • Provide CFO level support in capital raise transactions • Investor presentations • Executive summary • Identify, contact and negotiate with new funding sources • Financial model • Develop marketing and diligence infrastructure required to support the • Data room transaction • Negotiate and structure the transaction • Investor presentations • Executive summary • Financial model • Data room M&A Advisory / Execution IPO Planning and Preparation Our team has extensive experience in the company, underwriter and We provide a range of buy and sell side merger and acquisition advisory accounting sides of the initial public offering process. We provide skills that services. Given the experience of our staff we have the ability to structure can speed up the front end of the IPO process at a dramatically lower cost. our relationships with clients to be as comprehensive or as tactical as a particular transaction demands. Upon detailed investigation not every • Financial model preparation transaction idea is a good one and we pride ourselves in helping clients • Due diligence preparation understand the impact of bad deals and avoid them. • Kick-off meeting presentations • Turnkey buy or sell side transaction execution • S-1 drafting • Strategic and financial planning • Roadshow drafting • Due diligence assistance and support • Extra internal finance team support for audit process • Integration services VENTURE ADVISORS 11
- 12. Quality VC Relationships Our role as CFO in the vast majority of our client companies puts us in direct day-to-day contact with leading venture capital investors… Equity Providers Debt Providers VENTURE ADVISORS 12
- 13. Client Base Sinceour inception in 2002, we have advised more than 200 companies at Venture Advisors. Representative clients include: VENTURE ADVISORS 13
- 14. Selected Transactions $25,000,000 Undisclosed Undisclosed $31,000,000 Series D Funding Financial Restructuring Sale Sale has been sold to has been sold to The undersigned served as exclusive The undersigned served as financial The undersigned served as financial advisor to The undersigned served as financial advisor to Katzenbach Partners LLC in its sale to Booz & Dimdim in its sale to Salesforce.com financial advisor to Airwide Solutions advisor to Datatrac Company $8,500,000 Venture Debt Undisclosed Undisclosed $6,500,000 Exclusive Sale Exclusive Sale Exclusive Sale has been acquired by has been sold to has been sold to The undersigned served as financial The undersigned served as exclusive financial advisor The undersigned served as exclusive financial advisor The undersigned served as exclusive financial advisor to NTRU Cryptosystems, Inc. in its sale to Security to Optram Incorporated in its sale to Bentley to Softsight LLC advisor to Lilliputian Systems Innovation. Systems, Inc. VENTURE ADVISORS 14
- 15. Experience Jim Antes Bob Dudley Doc Honan Partner - CFO Partner - CFO Partner - CFO jantes@venture-advisors.com bdudley@venture-advisors.com dochonan@venture-advisors.com 781.273.6076 781.273.6072 781.273.6070 Public Company / IPO Experience YES Public Company / IPO Experience YES Public Company / IPO Experience YES VC Backed CFO Experience YES VC Backed CFO Experience YES VC Backed CFO Experience YES Fundraising Experience YES Fundraising Experience YES Fundraising Experience YES M&A Experience YES M&A Experience YES M&A Experience YES Financial Credentials MBA Financial Credentials CPA / MBA Financial Credentials CPA / MBA Bob joined Venture Advisors in January 2004 and Doc offers his clients more than 30 years of experience as Jim brings over twenty years of financial brings more than 25 years experience including 14 as a CFO and COO, mainly with start-ups and emerging management experience to his clients. He has CFO in both publicly traded and venture-backed growth companies. He has led nine rounds of venture and extensive hands-on experience in both private and emerging-growth companies in the technology and strategic funding totaling $65 million and also led a public companies having raised over $100 million in medical device industries. He has been instrumental successful IPO with an initial capitalization of $150 million, venture financing. Most recently, he has served as in securing venture financings, restructurings and which grew to $280 million within several months. Doc interim CFO at several development stage companies driving scalable best-in-class business practices and has managed all aspects of finance, accounting and guiding them through bridge, venture equity and standards for a broad range of venture backed administration, and is well versed in building sound debt financings. Previously, Jim was Vice President of companies.. Prior to Venture Advisors, Bob has infrastructure to enable companies to scale through the Finance at Emulex (a leader in Fibre Channel served as CFO of Synamics Corp., a multi-national various stages from start-up to mature, sustainable Networking) with responsibilities for operations and communications company and BaseSix, an interactive business. Doc has been CFO of both public companies, investor relations. During his time at Emulex, he IT services company. Prior to these entrepreneurial including Ludlow Corporation and Proteon, Inc., and participated in several acquisitions and two ventures, Bob was Vice President, CFO and Treasurer private companies, including ManagedComp, Into convertible debt offerings raising more than $650 of Inso Corporation, a $70 million publicly traded Networks and Chinook Communications, and was the vice million. Prior to Emulex, Jim was CFO at Giganet enterprise software company. He also had a president of M&A at Tyco International. He has extensive where he led the company through three rounds of successful 14-year career at Data General, where he experience negotiating a wide range of strategic financing and sold the business in 2001 to Emulex for was CFO of a $625 million multi-national operating agreements, intellectual property licenses, distribution $650M . He has also been CFO or held senior division. Bob began his career at Johnson & Johnson and joint venture agreements and has executed financial positions in several software companies as an M&A Analyst and Marketing Accounting acquisition/divestiture transactions in excess of $350 including Passkey Systems, DALim, Software Manager. He holds an MBA from Suffolk University million. Doc was previously a principal with Arthur Young Emancipation Technology, FASTech Integration and and is a graduate of the University of Massachusetts, & Company, and he has also acquired significant Bachman Information Systems. He holds an MBA Lowell. experience in international operations. A magna cum from Boston University and a BS in Accounting from laude graduate of Providence College, Doc received his the University of Denver and he is a Certified Public REPRESENTATIVE VA CLIENTS: DataTrac MBA from Harvard Business School. He is a CPA and Accountant. Corporation, Dimdim, Spectrum Transportation, Ze- earned the Silver Medal for the CPA exam in gen Massachusetts. REPRESENTATIVE VA CLIENTS: Bug Labs, Equallogic, Going.com, Knewton, Noble Peak Vision, Perkstreet REPRESENTATIVE VA CLIENTS: Digital Arbor, DynamicOps, Innoveer Solutions, Lilliputian Systems, Vela Systems VENTURE ADVISORS 15
- 16. Experience David Rauktys Pete Basius Partner – Advisory Services VP Finance drauktys@venture-advisors.com pbasius@venture-advisors.com 781.273.6073 781.856.1111 Public Company / IPO Experience YES Public Company / IPO Experience YES VC Backed CFO Experience NO VC Backed CFO Experience YES Fundraising Experience YES Fundraising Experience YES M&A Experience YES M&A Experience YES Financial Credentials MBA Financial Credentials MBA David provides a range of advisory services to our Peter Basius joined Venture Advisors in February 2007 and clients focused on capital raise transactions and brings nineteen years of experience in technology merger and acquisitions. David served as an companies. He most recently served as the Vice President investment banker at First Albany Corporation of Finance for ChoiceStream. Before joining from 1991 to 2003. He was a Managing Director in ChoiceStream, Peter managed his own consulting the Corporate Finance Group, where he was business providing accounting and finance services to responsible for leading the Boston group's efforts early stage technology companies such as Incipient, in IT services, software and enterprise hardware DataPower, Affinnova, VoiceObjects and ChoiceStream. markets. His responsibilities included the origination and primary execution of public Previously Peter worked for CyberCFO providing offerings, strategic mergers and acquisitions and accounting services to their clients and held the controller private equity transactions. He has completed position at REON Broadband, NetCentric, 4-Sight and more than 60 investment banking transactions and Dragon Systems. Peter also had financial roles of advisory assignments, raising over $2.4 billion for increasing responsibility at Parexel, Sequoia Systems and such companies as Airwide Solutions, Forrester Davox. He received his B.S. in Business Administration Research, NaviSite, NIC, USWeb, iXL, Ericsson, from the University of New Hampshire and his M.B.A. Critical Path and VeriSign. David holds a B.S. from from Rivier College. Babson College with majors in Finance, Investments and Economics, graduating in two years with highest distinction. He also earned an MBA from the Wharton School at the University of REPRESENTATIVE VA CLIENTS: Bit9, Incipient, Optiant, Pennsylvania. Sellmytimesharenow.com REPRESENTATIVE VA CLIENTS: Airwide Solutions, eDialog, Katzenbach Partners, Ntru Cryptosystems, Optram, Threadsmith VENTURE ADVISORS 16
- 17. Experience Leighanne Henkenmeier Bob Mulcahy VP Finance VP Finance lhenkenmeier@venture-advisors.com bmulcahy@venture-advisors.com 781.603.6203 978.835.9988 Public Company / IPO Experience YES Public Company / IPO Experience YES VC Backed CFO Experience YES VC Backed CFO Experience YES Fundraising Experience YES Fundraising Experience YES M&A Experience YES M&A Experience NO Financial Credentials CPA Financial Credentials MBA Leighanne Henkenmeier joined Venture Advisors in Bob brings over 20 years of financial management March 2010 and brings nineteen years of experience experience to his clients with experience in both in technology, retail and financial services public and private companies. Most recently he companies. She most recently served as the Vice served as the Corporate Controller/Treasurer at President of Finance for Mercatus and its newly Amperion. In that role, he has successfully led the acquired subsidiary, Financial Research company through $40m of equity and bridge Corporation. Prior to this role, Leighanne started and financing events. He has several years of broad based managed two separate companies, a high-end retail experience and specific expertise within the business and her own CFO consulting business. Her technology/manufacturing space with extensive consulting business focused on assisting early stage knowledge overseeing financial operations and technology companies in raising venture financing financial reporting. and building finance systems and teams to manage rapid growth. Her clients included Maven Networks, Prior to joining Amperion, Bob served as a Senior Habama and Epesi Technologies. Financial Consultant for Parson Consulting, a high end financial consulting firm headquartered in Chicago, Previously, Leighanne held Director of Finance and where he specialized in revenue recognition Controller positions at Resonate and Mainspring, initiatives, SEC reporting, ERP implementations and both venture-backed technology companies process re-engineering efforts. He has held senior preparing for IPOs. Leighanne was also an Audit financial positions at several technology companies Manager in the technology practice of Price including Mercury Computer Systems, IDE Associates Waterhouse where she managed both private and and Compugraphic. publicly-traded clients. She received her B.S. in Business Administration from the University of Bob holds an undergraduate degree from Bentley Massachusetts and is also a Certified Public University and an MBA from Suffolk University. Accountant. REPRESENTATIVE VA CLIENTS: Amperion, Exit41 VENTURE ADVISORS 17