Ajay ChopraTrinity Ventures

3000 Sand Hill RoadMenlo Park CA 94025

www.trinityventures.com

Ten Lessons from the Pinnacle Experience

A brief history of Pinnacle Systems Founded 1986; Series A

Media authoring and delivery tools FCS 1987; Series B 1989 Series C Failed IPO 1992 IPO 1994; Secondary offerings 1995/96 Acquired 20+ entities 1996-2003 Sold to Avid Technology in 2005

$462M cash and stock

Lesson #1:Building a Company is a marathon

Average run to IPO: 7 years Plan to enjoy the “journey” not the

“destination” Success in determined by execution focus,

team and value system

Lesson #2:“What’s the heading, Captain?”

Always know the heading Execution starts with leadership! Focus on leading; hire to manage

Lesson #3:Everybody’s money is not equally green

Find the right investor match Make sure goals are aligned

Lesson #4:Cut your losses!

Do not throw good money after bad Nothing wrong with being frugal! Define unbiased metrics for success and

failure Good enough is usually not!

Lesson #5:Do not let the competition control your profitability

Continue to define your “blue ocean” But do not underestimate your competition

Lesson #6:Technologies can take discontinuous steps but markets evolve slowly

Develop to technology evolution Plan to market evolution

Lesson #7:When the market reaches the inflection point, BE READY!

More start-ups get upstaged by new competition at the market inflection point than anywhere else

Keeping tabs on the “convergence” factors

Lesson #8:The soul of the company is its value system

Intellectual honesty Leading by example Fairness Culture of excellence

Lesson #9:You are known by the company you keep

Investors/Bankers Board members Auditors/Lawyers Customers

Lesson #10:Do not take yourself too seriously!

Remember to make the experience fun Find fulfillment in the journey Keep things simple Choose your battles

Bonus slides!

Matching with the right Venture Fund

Is your space an area of interest for the VC? Does the VC have expertise in the

space your company is focused VCs are well connected – will find an

expert – including another VC

Fund investment preferences

Geographical Deal stage Min-max investment profile Percentage ownership requirements

Fund investment cycle

When was the last fund raised? How many investments have been

made? How much “dry powder” is left?

Portfolio conflict?

Is this portfolio company an active investment?

Was it (or is it) a good investment? Too much concentration – portfolio

diversity? Direct competitor?

Are you in fact ready for VC money?

Only one shot with most VCs Crisp story in 40 minutes – 15 slides Team, Technology and TAM Unfair advantage

And a final quote…..

Entrepreneurship is “converting creativity and mental energy into wealth”- Narayana Murthy