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2011
September 30, 2011Learn it Session Agenda
8:30 a.m. Registration and Continental Breakfast
Learn it Session Agenda
g
9:00 a.m. WelcomeJames Wicksted, Associate Director, Oklahoma EPSCoRJerry Malayer, State Director, Oklahoma EPSCoR
9:15 a.m. The Process, the Plan and the PitfallsThis session will walk you through the process, the key elements needed In a business plan, and discuss how to avoid classic entrepreneurial mistakes.
Wayne Embree, VP Entrepreneur Services, i2E, Inc.
10:15 a.m. Networking Break
10:30 a.m. Reality vs PerceptionMeet local entrepreneurs and investors as they discuss lessons learned and give guidance on making your deal fundable.
Moderator, David Thomison, VP, Investments, i2E, Inc.Bryan Fuller, CEO, DermaMedicsMichelle Witt, Director of Business Development, Impact TechnologiesRod Whitson, President, Bank2Tra Pippin, Certified Facilitator, The Alternative Board
11:30 a.m. Networking LunchDine with nearly 400 college students community leaders investors entrepreneursDine with nearly 400 college students, community leaders, investors, entrepreneurs, and economic development experts from top Oklahoma companies.
1:00 p.m. Making Sense of the NumbersLearn how to prepare and display your business model in your financial projections, confirm consistency in your capital requirements and “use of funds,” and develop investor approved formatted and detailed financial projections.
David Thomison VP Investments i2E IncDavid Thomison, VP, Investments, i2E, Inc.
2:30 p.m. Networking Break
2:45 p.m. The PitchYou may only get one chance to make your pitch to potential investors. During this session you will gain insight into crafting a compelling investor presentation and delivering an on‐point elevator pitch.
Kenneth Knoll, Concept Investment Manager, i2E, Inc.
3:45 p.m. Questions and Answer
4:00 p.m. Networking Reception
Networking LuncheonThere are no rules, no logistics, no speakers
d t ti j t t ki !and no presentation just networking!
We have over 50 community leaders, investors, entrepreneurs
and economic development experts with just one goal in mind…
to talk to you about entrepreneurship, internships, capital
resources and so much more!
When we break for lunch either find a seat then network
or network to find a seat.
Be sure to review the luncheon guest list and table layout in the
folder and think about who you want to meet!
1
“WHO WANTS TO BE AN ENTREPRENEUR?” WORKSHOP Friday, September 30, 2011
Reed Conference Center, Midwest City
Ninth Annual Workshop co-sponsored by OK EPSCoR, i2E, OCAST, Greater Oklahoma City Chamber, Oklahoma Business Roundtable, UCO College of Business and MidFirst Bank
Opportunity to learn about the commercialization process
Topics: ranging from business plans to venture capital financing Topics: ranging from business plans to venture capital financing
Successful entrepreneurs and business community members (patent attorneys, venture capitalists, etc.) are invited to interact with and share insights with participants
Serves as kick-off event for OK Governor’s Cup Business Plan Competition
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Best Cities for Recent Grads
The Daily BeastMay 31, 2011
3. Oklahoma City, Okla.POPULATION: 1,227,278
PERCENT OF POPULATION BETWEEN AGE 22-24: 4.8 PERCENTCOST OF LIVING INDEX: 92.6
PERCENT OF HOUSING UNITS FOR RENTAL: 35 PERCENTUNEMPLOYMENT RATE: 5.2
AVERAGE PER-CAPITA PERSONAL INCOME: $38,742
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Best Cities for Recent Grads
The Daily BeastMay 31, 2011
9. Tulsa, Okla.POPULATION: 930,246
PERCENT OF POPULATION BETWEEN AGE 22-24: 4.1 PERCENTCOST OF LIVING INDEX: 88.0
PERCENT OF HOUSING UNITS FOR RENTAL: 33 PERCENTUNEMPLOYMENT RATE: 6.5
AVERAGE PER-CAPITA PERSONAL INCOME: $40,402
2
Dr. Jerry R. MalayerState Director, Oklahoma EPSCoR
Professor, Physiological SciencesAssociate Dean, Research & Graduate Education
College of Veterinary MedicineOklahoma State University
Doctor of Philosophy, 1990 University of Florida Master of Science, 1986 Purdue UniversityB h l f S i 1979 P d U i itBachelor of Science, 1979 Purdue University
•The American Association for the Advancement of Science•The Society for the Study of Reproduction (a FASEB affiliate organization)•Phi Zeta, The Honor Society of Veterinary Medicine•Animal Sciences Distinguished Alumnus Award – Purdue University – 2007•Oklahoma A&M Regents Distinguished Research Award – 2004•Pfizer Animal Health Award for Research Excellence – 2002•Phoenix Award of Excellence - 2001
Dr. James P. WickstedAssociate State Director,
Oklahoma EPSCoR
Professor, Department of PhysicsCollege of Arts & SciencesOklahoma State University
Doctor of Philosophy, 1983 City University of New York Master of Arts, 1978 City University of New YorkMaster of Arts, 1978 City University of New York Bachelor of Science, 1979 New York University
•The American Association for the Advancement of Science•The American Physical Society•NSF and DOE Project Director, Oklahoma EPSCoR•Principal Investigator of a $15 million NSF EPSCoR Research Infrastructure Improvement Award
•Noble Research Fellow, Optical Materials
Session 1 Tab
As i2E’s Vice President of Entrepreneur Services, Wayne Embree leads the team of executive advisors and entrepreneurs-in-residence in assisting Oklahoma’s technology-based entrepreneurs.
Wayne brings to i2E more than two decades of experience as an investor in entrepreneurial companies. He has been a seed-stage investor since 1986, serving as the lead investor in numerous startups in the energy, environmental, life science and information technology sectors. He co-founded Portland-based Reference Capital Management and Cascadia Partners which managed six funds, investing in more than 100 companies including many from research universities and corporate labs.
Wayne’s prior experience included policy work for the Oregon Legislative Assembly and former Arizona Governor Bruce Babbitt. He also served as a tactical operations officer in the U.S. Air Force from 1975 through 1980, directing real-time command, control and communications systems where he was consistently given responsibilities reserved for higher ranks.
Wayne holds a Bachelor of Science in Natural Sciences from Western Oregon University and a Master of Urban and Regional Planning from the University of Oregon. He has been a frequent speaker on technology commercialization and venture creation. He is an active private pilot, flying classic and antique aircraft.
Wayne Embree Vice President of Entrepreneur Services [email protected] www.i2E.org
The Process,
Wayne EmbreeVice President Entrepreneur Services
The Process, The Plan &The Pitfalls
This presentation is © 2011
What is an entrepreneur?
Why become one?
What’s the one thing anyWhat s the one thing any
entrepreneur must have?
What defines success?
How would you know?
What increases odds of success?
What do these companies have in common?
Envision a Great Company
• Recruit strong, independent board members
• Retain experienced, qualified legal counsel
• Seek out well‐respected technical advisors
• Hire the very best people – give them authority, hold them accountable
Creating a Business Foundation
• “Build a better…”
• Opportunity doesn’t knock – you have to chase it down the street and mug it
Getting Started
• Who’s your IDEAL first customer?
– Does your product solve a serious problem, or
Does o r prod ct create ne opport nities– Does your product create new opportunities
• How is the product delivered to your customer?
• Can you make, market, distribute, sell, service your product(s) profitably?your product(s) profitably?
The Start‐Up Lifecycle
MATURITY
Banks Public Markets
PROOF –OF‐CONCEPT
IDEA
PROFIT
TIMEBREAK EVEN
GROWTH
Angels
Venture Capital
Banks, Public Markets
SEEDSTART‐UP
EARLY
VALLEY OF DEATH
Business Plan – Why Have One?• Two purposes
– Raise capital– Provide strategic direction
• It’s a Business’ story of opportunity and vision
• Articulate the business model
• Detail key milestones – past and future
• Explain who’s responsible and accountable
• Written with passion and a sense of urgency
Key Elements• Product – not just cool “disruptive” technology
• Market – customers, channels, competitors
• Business Model – can the business operate pprofitably, sustainably
• Finances – how much money is needed, when, how’s it spent, when’s breakeven
• Execution – risk reduction
• Package – make it your own
The Opportunity• Does anyone else care?
• Have you spoken to them?
• Will they test a prototype?• Will they test a prototype?
• Do they have decision authority?
• Can you build it successfully?
• Can you make a profit?
• You will underestimate product developmentYou will underestimate product developmentcosts by 3 – 5 X
The Market• How many customers can you identify?
• Do you know how they buy, when, will spend
• What do they do now?y
• You have competitors – status quo strongest
• Do you require a sales channel or do you have to build one?
• Marketing is NOT sales brochures & trinkets
• You’ll underestimate sales and marketing costsby 10 – 20 X
The Business ModelBe impatient for profits, but patient for growth
Clayton Christiansen, PhDy ,
• More capital can’t fix a flawed business model
Business Model Building Blocks
*Alex Osterwalder’s Business Model Canvas
Financial Model• 18 – 24 Months bottom‐up detail by month
– Balance Sheet– Profit & Loss– Cash Flow
• Years 3 – 5 by quarter
• Itemize, describe key variables & assumptions– Test them!
• No such thing as “conservative” financials
’ll d i fi i l d• You’ll underestimate financial needs 2 – 5 X
Execution• Leadership – relevant experience: industry, technology, markets and prior results
– List individual responsibilities and objectives
• Describe open positions and desired skill sets
• Discuss outsourced services, functions. Explain why and back up options
• Detail compensation, ownership
• You’ll replace 4 – 5 key employees – in somecases multiple times – before exit
The Document
•Cover – Principal contact: name, address, email, phone
15 – 20 Pages TOTAL
•Executive Summary: 1 – 2 pages
– Opportunity/problem; product/solution; market; strategy; management; summary financials
•Company Overview: 2 – 3 pages
– Explains the “Why”Explains the Why
• Market, Marketing, Sales Strategy: 3 – 6 pages
– Opportunity
M k d i
The Document (Cont.)
– Market dynamics
– Accessible market
– Competitors
• Include a feature, function, value matrix
– How you’ll reach your customers
• Viral web advertising doesn’t cut it
The Document (Cont.)• Management, key roles, board: 2 – 3 pages
– Use abbreviated bios
– Highlight relevant knowledge and skills
– Emphasize critical leadership experience
– Don’t have the right person? Leave the slot open
• Finances: 3 – 5 pages– Key assumptions and variables
– Sources and uses of fundsSources and uses of funds
– The exit strategy – find and use comparables
But Wait… The Diligence Package• Incorporation and Other Corporate Documents
• Management, Officers, Directors & Employees
• Capitalization/Securitiesp /
• Target Market Sizing
• Marketing & Sales
• Customers
• Competition
• Operations
• Financial Information
• Intellectual Property (Patent, Trademarks, Copyrights)
• Contract & Strategic Partnerships
Critical Business Plan Mistakes1. Grammatical and spelling errors
2. Written using passive language
3. Poor market research; failure to define/characterize target markettarget market
4. Flawed internal logic in the financial model
5. Leaps of faith (unsupported assertions)
6. Focusing on the technology and not the business
7. Ignoring or dismissing the competition
8. Projections too aggressive or can’t support the capital being soughtcapital being sought
9. An executive summary that doesn’t clearly and succinctly make the investment case
10. No contact information
Additional Information
Excerpts from “ The Entrepreneurs Path: A Handbook for High Growth Companies”
The Path
The Risk
The Cash
The Plan
Institutional Investor Due Diligence Items
1
You
have
an
idea
. You
hav
e pa
ssio
n an
d de
term
inat
ion.
Yo
u ar
e re
ady
to tu
rn y
our
idea
into
a c
ompa
ny,
and
you
know
you
nee
d so
me
help
.
THE
PATH
“E
ven
if
yo
u’r
e o
n t
he
rig
ht
tra
ck
, y
ou
’ll
get
ru
n o
ver i
f y
ou
ju
st s
it
there
.”–
Will
Rog
ers
The
Entr
epre
neur
’s P
ath
21
THE
PATH
3
Co
ng
ra
tula
tio
ns!
You
’ve
com
e to
the
rig
ht p
lace
. T
his
hand
book
is
wri
tten
exp
ress
ly f
or
entr
epre
neur
s w
ho w
ant
to c
reat
e hi
gh g
row
th b
usin
esse
s.
Hig
hgr
owth
bus
ines
ses
are
gene
rally
foun
ded
ons
tate
-of-
the-
artp
rodu
cts
orp
roce
sses
,and
typi
cally
hav
eso
me
leve
lof
prop
riet
ary
stat
us.T
hese
bus
ines
ses
incl
ude:
• A
dva
nced
mat
eria
ls
• A
ero
spac
e
• A
gro
-sci
ence
s
• B
iosc
ienc
es
• C
om
mun
icat
ions
Tec
hno
log
ies
• E
lect
roni
cs a
nd r
elat
ed fi
eld
s
• E
nerg
y
• In
form
atio
n Te
chno
log
y
• M
edic
al D
evic
es
• M
edic
al In
stru
men
ts
• N
ano
tech
nolo
gy
Ro
bo
tics
• Te
leco
mm
unic
atio
ns
… t
o n
ame
a fe
w.
Ent
repr
eneu
rial
idea
sm
ayo
rigi
nate
ina
n“a
ha”
mom
ent
ofin
spir
atio
nor
dev
elop
slo
wly
ove
ra
peri
odo
ftim
e.T
hey
may
invo
lve
wri
ting
pro
prie
tary
sof
twar
eor
dev
elop
ing
appl
icat
ions
from
ope
nso
urce
cod
e.
Som
etim
esth
eyc
ome
from
put
ting
toge
ther
exi
stin
gco
mpo
nent
sin
inno
vati
vea
ndu
nusu
alw
ays
orfr
omy
ears
of
labo
rato
rye
xper
imen
tati
ona
ndb
ench
res
earc
hth
atle
ads
toa
new
dis
cove
ry,i
nven
tion
,or
tech
nolo
gy.O
ther
tim
es
grou
ndbr
eaki
ngid
eas
appe
arb
ehin
dth
ecl
osed
eye
lids
of
soon
-to-
bee
ntre
pren
eurs
whi
leth
eya
rely
ing
onth
ebe
ach.
FAC
TOID
Ther
e ar
e 29
mill
ion
smal
l bus
ines
ses
in t
he U
nite
d
Stat
es a
ccor
ding
to
the
Smal
l Bus
ines
s A
dmin
istr
atio
n (S
BA
). S
ince
20
04,
yea
rly
aver
ages
of
650
,00
0 n
ew
com
pani
es a
re la
unch
ed. I
t’s
a pr
etty
like
ly w
ager
th
at t
hose
bus
ines
ses
bega
n w
ith
an id
ea f
rom
an
inno
vato
r or
ent
repr
eneu
r lik
e yo
u.
The
Entr
epre
neur
’s P
ath
41
THE
PATH
5
Whe
neve
ran
dho
wev
ert
he“
aha”
mom
ent
arri
ves
and
the
deci
sion
is
mad
eto
tur
nth
ati
dea
into
ap
rodu
cto
rse
rvic
e,
the
Ent
repr
eneu
rial
Pat
h be
gins
.
The
Entr
epre
neur
ial P
ath
The
Ent
repr
eneu
rial
Pat
his
the
path
you
wil
lbe
foll
owin
gas
you
take
you
rbi
gid
eafr
omP
roof
-of-
Con
cept
toG
row
th.
We
wil
llay
out
ap
ath
ofc
riti
calm
iles
tone
sre
quir
edto
su
ccee
dat
eac
hst
age
top
rogr
ess
toth
ene
xt.T
hes
eque
nce
ofm
iles
tone
san
dac
tual
eve
nts
onth
epa
thw
illv
ary
from
co
mpa
nyto
com
pany
.Eve
ryn
ewc
ompa
nyth
atc
onti
nues
to
surv
ive
and
prog
ress
wil
lexp
erie
nce
each
oft
hese
sta
ges,
so
met
imes
mor
eth
ano
nce.
The
Ent
repr
eneu
r’s
Pat
hfo
cuse
son
the
first
five
sta
ges
ofth
eco
mpa
ny’s
exi
sten
ce;P
roof
-of-
Con
cept
,See
d,
Star
tup,
Ear
ly,a
ndG
row
th.T
hese
sta
ges
typi
call
ysp
an
the
first
thre
eto
five
yea
rso
fac
ompa
ny’s
life
.
Pro
of-o
f-C
once
pt: T
heb
usin
ess
conc
epti
sde
velo
ped.
Seed
: Th
eco
mpa
nyh
asa
pro
duct
or
serv
ice
ata
ver
yea
rly
stag
eof
dev
elop
men
tbut
pro
babl
yno
tful
lyo
pera
tiona
l.
Star
tup:
Th
ebu
sine
ssfu
nctio
nso
fthe
com
pany
are
cre
ated
;th
ein
itial
man
agem
entt
eam
isin
pla
ce.T
hefi
rstp
roto
type
is
mor
ede
velo
ped.
Earl
y:
Bet
ate
stin
gha
sbe
gun
and
com
pany
may
be
appr
oach
ing
brea
keve
nw
ithr
espe
ctto
exp
ense
and
rev
enue
.
gro
wth
: C
ompa
nyis
pro
duci
ngr
even
uea
ndp
rofit
able
.
Late
r St
age
to M
atur
ity:
Pro
duct
or
serv
ice
isw
idel
yav
aila
ble.
Acq
uisi
tion
IPO
,or
cont
inue
toin
nova
tea
nd
oper
ate
asa
pri
vate
com
pany
.
As
you
foll
owth
epa
tho
fthi
sha
ndbo
ok,y
ouw
illl
earn
mor
evo
cabu
lary
of t
hee
ntre
pren
euri
alw
orld
. Sta
rtu
sing
the
nam
eso
fthe
ses
tage
sto
des
crib
eyo
urc
ompa
ny.B
ecom
eco
mfo
rtab
leu
sing
thes
e te
rms
whe
n yo
u ta
lkto
inve
stor
s,
serv
ice
prov
ider
s,b
usin
ess
peop
lea
ndo
ther
ent
repr
eneu
rs.
Usi
ng e
ntre
pre
neur
ial l
ang
uag
e he
lps
othe
rs
und
erst
and
whe
re y
ou a
re a
nd d
emon
stra
tes
that
yo
u un
der
stan
d, t
oo.
SEED
STAR
T-UP
EARL
Y
GROW
TH
PROO
F-OF
-CON
CEPT
PROFIT
TIM
E
MATU
RITY
BREA
K EVE
N
Cha
rt 1
.1T
he E
ntre
pren
euri
al P
ath
The
Entr
epre
neur
’s P
ath
61
THE
PATH
7
Mat
chin
g S
ourc
es o
f C
apit
al t
o th
e M
ilest
ones
of
the
Entr
epre
neur
ial P
ath
All
high
gro
wth
bus
ines
ses
requ
ire
risk
cap
ital.
Eac
hst
age
ofth
eE
ntre
pren
euri
alP
ath
has
aco
rres
pond
ing
stag
ean
dso
urce
of
capi
tal.
Und
erst
andi
ngth
est
ages
and
sou
rces
ofc
apita
lfoc
uses
th
em
anag
emen
ttea
m’s
effo
rts.
Foc
usin
gon
the
corr
ectc
apita
lso
urce
and
iden
tifyi
nga
chie
vabl
em
ilest
ones
will
sim
plify
and
im
prov
eth
esu
cces
sof
the
capi
talr
aisi
ngp
roce
ssa
ndfo
cus
the
man
agem
entt
eam
’sef
fort
s.
Thi
sse
ems
tob
eon
eof
the
hard
estf
unda
men
tals
for
entr
epre
neur
sto
lear
n.
For
exa
mpl
e,th
eP
roof
-of-
Con
cept
Sta
geis
no
tim
eto
be
seek
ing
vent
ure
capi
tal.
We
can’
tcou
ntth
enu
mbe
rof
tim
es
we’
veh
eard
ent
repr
eneu
rss
ayt h
at“
seve
ral ve
ntur
e ca
pita
lists
are
int
eres
ted
in inv
esti
ng,”
whe
nw
ekn
ow
that
onl
ya
very
sm
allp
erce
ntag
eof
all
ven
ture
cap
ital
is
dire
cted
atc
ompa
nies
that
are
not
pro
duci
ngr
even
ue.
The
last
few
yea
rs, a
ccor
ding
to
the
Nat
iona
l A
ssoc
iati
on o
f V
entu
re C
apit
alis
ts, o
nly
2 pe
rcen
t of
all
vent
ure
capi
tal w
ent
to s
eed
inve
stm
ents
an
d so
me
stat
isti
cs r
epor
t th
at o
nly
1 pe
rcen
t of
th
e bu
sine
sses
tar
geti
ng v
entu
re c
apit
al fi
rms
for
dolla
rs a
ctua
lly r
ecei
ve a
n in
vest
men
t.
As
thes
est
atis
tics
sho
ut,e
xcep
tfor
the
biot
echn
olog
yan
dli
fes
cien
ces
indu
stri
es,v
entu
rec
apit
alfu
ndin
gis
an
unli
kely
opt
ion
for
ane
ntre
pren
euri
alc
ompa
nyu
ntil
the
busi
ness
isp
rodu
cing
rev
enue
.Yes
,the
rea
reo
utli
ers
that
at
trac
tven
ture
cap
ital
ists
ear
ly,b
utth
eva
stm
ajor
ity
of
d eal
sd o
not
f all
i nto
t his
cat
egor
y.
Don
’tju
mp
ahea
dan
dtr
yto
attr
actc
apita
lfro
ma
nin
vest
or
type
bef
ore
your
com
pany
rea
ches
the
stag
ew
here
that
inve
stor
lik
esto
inve
st.T
hat’s
equ
ival
entt
ofis
hing
for
catfi
shin
a
mou
ntai
n tr
out s
trea
m. I
t’sa
was
teo
f you
r tim
e an
d th
eirs
.
Soh
owd
oy o
ut a
rget
t he
r igh
tsou
rce
o fc
apit
ala
tthe
rig
ht
s tag
e?S
tart
by
u nde
rsta
ndin
gw
haty
our
c om
pany
wil
lne
edc
apit
alfo
r an
d ho
wit
wil
l be
used
at e
ach
stag
e of
the
Ent
repr
eneu
rial
Pat
hto
ach
ieve
impo
rtan
tmil
esto
nes.
The
Entr
epre
neur
’s P
ath
81
THE
PATH
9
SOU
RC
ES O
F C
API
TAL
Succ
essf
ule
ntre
pren
eurs
mat
chth
eir
com
pany
’sc
apita
lnee
dsw
ithth
em
osta
ppro
pria
tea
ndli
kely
cap
itals
ourc
eat
eac
hst
age.
Foun
der
s, F
rien
ds,
Fam
ily, a
nd “
Foo
ls”:
You
will
be
your
fir
stin
vest
or.A
fter
that
,fam
ily,f
rien
ds,a
nda
cqua
inta
nces
will
ofte
nin
vest
ver
yea
rly
inth
eco
mpa
ny’s
Pat
has
thei
rtr
usta
ndin
tere
stis
in
the
indi
vidu
alm
ore
than
mon
etar
yre
turn
s.Y
ouw
illo
ften
hear
this
gro
up
“fon
dly”
ref
erre
dto
as
“foo
ls”
beca
use
this
sta
geo
fac
ompa
ny’s
gro
wth
is
sor
isky
and
unp
redi
ctab
le.
Ban
ks: L
ocal
ban
ks, a
ndto
som
e ex
tent
nat
iona
l one
s,m
ayb
e a
sour
ceo
flin
eso
fcre
dit,
trad
ition
alb
orro
win
g,o
rcon
vert
ible
deb
t.Th
em
ore
pers
onal
re
sour
ces
the
foun
der a
nd/o
r com
pany
has
, the
mor
e po
ssib
leth
iss
ourc
e is
.
Gra
nts:
Bus
ines
s gr
ants
com
efr
omp
ublic
and
pri
vate
sec
tor,
not-
for-
profi
tfo
unda
tions
and
oth
ere
ntiti
es.T
ypic
ally
,gra
nts
are
used
inth
eea
rly
rese
arch
an
d de
velo
pmen
t sta
geo
f ac
ompa
nyto
furt
her t
hete
chno
logy
. Unl
ike
loan
s,
gran
tsd
ono
thav
eto
be
repa
id.G
rant
s,li
kee
quity
cap
ital,
are
time
inte
nsiv
eto
attr
acta
ndth
een
trep
rene
urm
ustb
eta
rget
edin
his
orh
era
ppro
ach.
Bo
ots
trap
: Boo
tstr
appi
ngr
equi
res
entr
epre
neur
sto
use
imag
inat
ion,
kn
ow-h
ow,a
ndh
ard
wor
kto
pay
as
they
go
thro
ugh
reve
nue
with
out
rais
ing
equi
tyc
apita
l.Th
ese
mak
eth
em
osti
nter
estin
gco
mpa
nies
and
en
trep
rene
urs.
Ang
el In
vest
or:
Pri
vate
,hig
hne
twor
thin
divi
dual
sw
hom
eett
he
crite
ria
ofa
ccre
dite
din
vest
ora
ndin
vest
thei
row
nca
pita
lin
seed
and
ea
rly
stag
ebu
sine
sses
.
Ven
ture
Cap
ital
: Ins
titut
iona
linv
esto
rsw
itha
typi
cali
nves
tmen
tth
resh
old
ofa
tlea
st$
2m
illio
nin
exc
hang
efo
req
uity
ine
arly
and
late
rst
age
busi
ness
es.
CA
PITA
L R
EQU
IREM
ENTS
PER
STA
GE
Pro
of-
of-
Co
ncep
t: P
roof
-of-
conc
ept f
undi
ng is
usu
ally
the
first
cap
ital
that
a b
usin
ess
atte
mpt
sto
acc
ess.
It
is u
sed
to i
ncor
pora
te t
he b
usin
ess,
in
vest
in
appr
opri
ate
prot
ectio
ns f
or t
he t
echn
olog
y, a
nd c
reat
ea
limite
dpr
otot
ype
ofth
epr
oduc
tor
serv
ice.
Seed
: See
din
vest
men
trou
nds
typi
cally
pro
vide
cap
italt
opr
ove
the
feas
ibili
tyo
fthe
pro
duct
and
qua
ntify
the
mar
ket.
Star
tup
: Sta
rtup
cap
ital,
typi
cally
ref
erre
dto
as
first
rou
ndo
rSe
ries
A
,and
use
dto
fund
the
intr
oduc
tion
ofa
wor
king
pro
duct
pro
toty
pe
orp
ilott
oth
em
arke
tto
veri
fyth
atth
eec
onom
ics
ofth
ebu
sine
ssp
lan
are
sust
aina
ble.
With
shi
fting
fina
ncia
lmar
kets
,thi
sro
und
iso
ften
an
exte
nsio
nof
the
seed
rou
nd.
Ear
ly: T
hese
equ
ityr
ound
sth
ato
ccur
afte
rth
ese
eda
nds
tart
upr
ound
s,
com
mon
lyr
efer
red
toa
sfir
sto
rse
cond
rou
ndo
rSe
ries
Ba
nds
oon
,are
ty
pica
llyu
sed
tofu
ndp
rodu
cta
ndm
arke
tdev
elop
men
t.E
arly
Sta
geis
of
ten
refe
rred
toa
sth
est
age
whe
na
com
pany
isg
ener
atin
gre
venu
eba
sed
onit
sbu
sine
ssm
odel
.
Gro
wth
: Thi
seq
uity
cap
itali
sus
edto
fund
exp
ansi
ona
ndg
row
th.
Dep
endi
ngo
nth
ebu
sine
ss,c
erta
inty
pes
ofb
ank
loan
sm
ayb
eap
plic
able
.
Late
r St
age
to M
atur
ity:
Equ
ityc
apita
l and
trad
ition
alfu
nds
supp
ort
expa
nsio
n,g
row
th,a
ndp
oten
tially
str
ateg
ica
cqui
sitio
nsto
ent
ern
ewm
arke
ts.
Ther
eis
one
mor
ete
rmth
ate
ntre
pren
eurs
will
hea
rdu
ring
dis
cuss
ions
of
cap
italr
equi
rem
ents
–T
heV
alle
yof
Dea
th.T
his
isth
epo
intd
urin
gth
ePr
oof-
of-C
once
pt,S
eed,
Sta
rtup
,and
Ear
lyS
tage
whe
nth
eco
mpa
ny
iss
pend
ing
mor
em
oney
that
itis
taki
ngin
,usu
ally
tob
uild
pro
duct
and
ca
rry
outm
arke
tdev
elop
men
t.It
isc
alle
dth
atV
alle
yof
Dea
thb
ecau
ses
om
any
com
pani
esd
on’t
mak
eit
outo
fthi
sst
age.
Cha
rt 1
.2M
atch
ing
Cap
ital
Sou
rces
to
the
Ent
repr
eneu
rial
Pat
h
GROW
THMA
TURI
TY
EARL
Y
Foun
der
s, F
rien
ds,
Fa
mily
, and
“Fo
ols
”
TIM
E
PROFIT
Ban
ksG
rant
sB
oo
tstr
apA
ngel
Inve
sto
rV
entu
re C
apit
al
BREA
K EVE
NSE
EDST
ART-U
P
PROO
F-OF-C
ONCE
PT
The
Entr
epre
neur
’s P
ath
101
THE
PATH
11
Ma
kin
g y
ou
r B
ig id
Ea r
EaL
You
brin
gth
eid
ea.T
he E
ntre
pren
eur’
s P
ath
prov
ides
th
efr
amew
ork,
tool
s,a
ndp
roce
ssto
val
idat
eth
ebu
sine
ss
p ote
ntia
lofy
our
e ntr
epre
neur
iald
ream
.
Thi
sch
apte
rha
sin
trod
uced
you
toth
eE
ntre
pren
eur’s
P
ath
and
the
Sour
ces
and
Use
sof
Cap
ital
. In
the
foll
owin
gch
apte
rs,w
epr
ovid
eto
ols,
pro
cess
es,t
houg
ht-s
tart
ers,
and
in
form
atio
n on
bes
t pra
ctic
es. T
hese
wil
l hel
p en
trep
rene
urs
redu
ceth
eri
skth
atis
inhe
rent
inn
ewc
ompa
nies
and
a c
hiev
et h
ec r
itic
alm
iles
tone
sa l
ong
t he
p ath
f rom
Pro
of-o
f-C
once
ptt o
Gro
wth
Sta
ge.
1. T
hE
riS
k –
Ent
repr
eneu
r’s
Ris
k A
sses
smen
t: T
his
isa
thou
ght-
star
ter
for
eval
uatin
gth
eac
tiviti
esth
atr
elat
eto
th
epr
oduc
t or
ser
vice
you
pla
nto
pro
vide
,the
mar
ket
your
pro
duct
will
ser
ve,a
ndth
evi
abili
tyo
fthe
bus
ines
syo
uw
antt
obu
ild.T
heg
ener
alr
isk
for
the
aspe
cts
ofp
rodu
ct,
mar
ket,
busi
ness
,fina
nce,
and
exe
cuti
onw
illb
ead
dres
sed
iny
our
busi
ness
pla
n.
2. T
hE
Ca
Sh –
Cap
ital
Sou
rces
:G
etr
eala
bout
the
fine
a rto
frai
sing
cap
ital
.Lea
rna
bout
t he
mon
eyt h
atm
ayb
eav
aila
ble
toe
ntre
pren
eurs
and
how
toin
crea
sey
our
chan
ces
ofg
etti
ngs
ome
ofit
.Und
erst
and
the
impo
rtan
ceo
fthe
E
ntre
pren
euri
alP
ath
asit
per
tain
sto
cap
ital
req
uire
men
ts
and
sour
ces
for
your
com
pany
.Lea
rnh
owto
dev
elop
in
form
edta
ctic
ala
nds
trat
egic
pla
nsto
rea
cha
rea
list
ica
nd
achi
evab
lec
apit
alp
lan
tom
ove
your
com
pany
thro
ugh
the
Pat
han
dov
erti
me
tolo
ng-t
erm
sus
tain
abil
ity.
3. T
hE
PLa
n –
Bus
ines
s P
lan
Che
cklis
t: T
heb
usin
ess
plan
che
ckli
stp
rovi
des
ano
verv
iew
ofk
eyp
hilo
soph
ies
r ela
ted
t ow
riti
nga
bus
ines
sp l
an,q
uest
ions
t he
p lan
mus
tan
swer
,and
sta
tem
ents
and
mis
conc
epti
ons
toa
void
.
4. T
hE
PiT
Ch
Ele
vato
r Sp
eech
:L
earn
the
“how
s”a
nd“
why
s”o
fde
velo
ping
the
perf
ecte
leva
tor
spee
chth
atd
escr
ibes
you
rb u
sine
ssa
ndi t
so p
port
unit
yf o
rt h
em
arke
tand
i nve
stor
si n
le
ssth
anfi
fty
wor
ds.
Bus
ines
s P
lan
Pit
ch:
The
han
dboo
kpr
ovid
es
guid
elin
eso
nco
nten
t,a
ppro
ach,
and
ap
rese
ntat
ion
tem
plat
e to
hel
p en
trep
rene
urs
deli
ver
abu
sine
ssp
lan
pitc
hth
ate
arns
inv
esto
rs’a
tten
tion
.
5. T
hE
Pr
iCE
– Val
uati
on M
odel
and
Sam
ple
Ter
m
Shee
ts:
Lea
rnh
owto
app
roac
hva
luat
ion
from
an
inve
stor
’svi
ewpo
intt
oat
trac
tcap
ital
and
cre
ate
aco
llab
orat
ive
rela
tion
ship
wit
hth
epe
ople
who
con
trol
the
purs
e.
6. T
hE
rEL
aTi
on
ShiP
S –
Rel
atio
nshi
p B
uild
ing:
We
o ffe
re x
ampl
eso
ftec
hniq
ues
a nd
b est
pra
ctic
esi n
pro
duct
ive
netw
orki
ng,e
stab
lishi
nga
nad
viso
ryb
oard
,and
cre
atin
gan
ef
fect
ive
boar
dof
dir
ecto
rsth
atw
illh
elp
your
com
pany
gro
w.
7. T
hE
EXiT
– E
xit
Stra
tegi
es:
Inth
ebe
ginn
ing,
you
m
ayb
eso
con
sum
edw
ith
prod
ucta
ndm
arke
tstr
ateg
ies
that
its
eem
sim
poss
ible
toin
vest
any
ene
rgy
inc
onsi
deri
ng
the
mil
esto
nes
ofth
ela
ter
stag
eso
fcom
pany
gro
wth
,but
ex
its
are
alw
ays
onin
vest
ors’
min
ds.L
earn
the
basi
cso
fin
vest
ore
xits
trat
egie
s–go
oda
ndb
ad–i
nclu
ding
fire
sal
e,
init
ialp
ubli
cof
feri
ngs
(IP
O),
and
acqu
isit
ion.
The
Entr
epre
neur
’s P
ath
12 Co
nC
LuSi
on
Whe
ther
you
rid
eais
sti
llju
sta
dre
amo
ral
read
yha
san
ad
dres
s,th
ere
isn
oon
e-si
ze-fi
ts-a
ll,t
urnk
eya
ppro
ach
t os
tart
ing
y our
com
pany
.The
firs
tthi
rty
d ays
ofa
nyn
ew
vent
ure
wil
lpro
veth
at.
On
the
othe
rha
nd,m
any
ofth
esa
me
issu
esa
ndr
isks
are
pr
esen
tin
alm
osta
lla
dvan
ced
tech
nolo
gys
tart
-ups
.Whi
le
this
han
dboo
k do
esn
ots
uppl
y al
l the
ans
wer
s,it
hel
psy
ou
ask
the
righ
tque
stio
ns,a
tthe
rig
htti
me,
oft
her
ight
folk
s.
key
Poi
nts
Whi
lee
ach
e ntr
epre
neur
and
com
pany
i su
niqu
e;
the
stag
esa
ndm
ilest
ones
oft
heE
ntre
pren
euri
al
Path
are
com
mon
toa
ll.
Succ
essf
ule
ntre
pren
eurs
mat
cht h
eirc
ompa
ny’s
capi
taln
eeds
with
the
mos
tapp
ropr
iate
and
lik
ely
toin
vest
cap
itals
ourc
eat
eac
hst
age
ofth
eE
ntre
pren
euri
alP
ath.
You
brin
gth
eid
ea.T
he E
ntre
pren
eur’s
Pat
hpr
ovid
esth
efr
amew
ork,
tool
s,a
ndp
roce
ss
t ov
alid
ate
t he
b usi
ness
pot
entia
lofy
our
entr
epre
neur
iald
ream
.
15
“Y
ou
’ve g
ot
to g
o o
ut
on
a l
imb
so
meti
mes
beca
use
th
at’
s w
here
th
e
fru
it i
s.”
–
Will
Rog
ers
The
Entr
epre
neur
’s P
ath
162
TH
E R
ISK
17
Sinc
eth
eIP
Ob
oom
oft
hela
ten
inet
ies
thro
ugh
mor
ech
alle
ngin
gre
cent
tim
es,w
eha
vein
tera
cted
wit
hm
ore
than
2,0
00h
igh
grow
thc
ompa
nies
whi
chs
pan
the
spec
trum
of
adv
ance
dte
chno
logy
bus
ines
ses.
Man
yof
the
com
pani
esw
em
etb
ecam
eou
rcl
ient
san
dar
efo
llow
ing
our
disc
ipli
ned
appr
oach
totu
rnth
eir
idea
sin
top
rodu
cts
and
serv
ices
that
cus
tom
ers
buy.
Are
they
all
go
ing
tos
ucce
ed?
Pro
babl
yno
t.St
arti
nga
new
com
pany
is
av e
ryr
isky
bus
ines
s.
Sinc
e 20
04
, a y
earl
y av
erag
e of
575
,00
0
smal
l bus
ines
ses
(ab
out
20 p
erce
nt)
ceas
ed
oper
atio
ns. T
hree
in t
en n
ew fi
rms
don
’t m
ake
it p
ast
24 m
onth
s, a
nd a
bou
t ha
lf o
f th
e on
es
that
do,
don
’t s
urvi
ve m
ore
than
five
yea
rs,
acco
rdin
g t
o B
usin
ess
Dyn
amic
s St
atis
tics
co
mp
iled
by
the
U.S
. Cen
sus
Bur
eau.
On
the
othe
rha
nd,f
ore
very
thre
ene
wc
ompa
nies
that
don
’tm
ake
itth
roug
htw
enty
-fou
rm
onth
s,s
even
oth
ers
surv
ive.
And
w
hile
abo
uth
alfo
ftho
ses
even
fail
inth
ene
xtfi
vey
ears
,the
ot
her
half
ofth
emd
on’t.
The
yco
ntin
ue,c
reat
ing
jobs
,rev
enue
,an
dbr
eakt
hrou
ghin
nova
tions
.Th
atis
the
funn
elo
fsta
rtup
in
nova
tion.
Out
oft
eng
reat
idea
s,tw
oto
thre
em
ake
it.
Bu
iLd
ing
a P
ro
du
CT
an
d B
uiL
din
g a
Bu
Sin
ESS
ar
E n
oT
ThE
SaM
E Th
ing
Ent
repr
eneu
rsa
rep
assi
onat
eab
outt
heir
tech
nolo
gies
.In
the
begi
nnin
g,th
eco
mpa
ny,t
hep
rodu
cto
rse
rvic
e,a
nd
the
tech
nolo
gya
res
ocl
osel
yre
late
dth
atit
’sh
ard
toth
ink
abou
tthe
min
depe
nden
tly.
Fro
mth
est
art,
inno
vato
rsa
nde
ntre
pren
eurs
hav
eto
focu
sm
ost o
f the
ire
nerg
y an
d re
sour
ces
ond
evel
opin
g th
eir
prod
uct.
The
reis
ate
nden
cyto
giv
eli
pse
rvic
e,p
ostp
one,
or
tota
lly
igno
rea
nya
naly
sis
ofth
em
arke
tthe
yar
eho
ping
to
ser
vea
ndw
heth
erth
atm
arke
tis
subs
tant
iale
noug
hto
su
ppor
tthe
new
com
pany
.
“If
you
buil
dit
the
yw
ill
com
e”m
ayw
ork
for
the
Fie
ld
ofD
ream
sor
Tru
mp
Tow
er,
but
neve
r,n
ono
tev
eno
nce,
in
all
our
yea
rso
fw
orki
ngw
ith
entr
epre
neur
sha
vew
ese
ent
his
stra
tegy
wor
kfo
ra
star
t-up
com
pany
,no
mat
ter
how
inn
ovat
ive
ora
maz
ing
the
tech
nolo
gy,
prod
uct,
or
serv
ice
was
.
The
col
d ha
rdt
ruth
of
high
gro
wth
ent
repr
eneu
rshi
pis
tha
tun
less
you
del
iver
ap
rodu
cto
rse
rvic
eth
at
t hou
sand
sa n
dt h
ousa
nds
o fp
eopl
ew
ant
t ob
uya
ndc
an
pay
for,
you
rco
mpa
nyw
ill
like
lyb
eon
eof
the
sev
eni
nte
nth
atd
on’t
succ
eed.
“Bef
ore
you
mov
e ve
ry f
ar o
r ve
ry f
ast
in t
he
dir
ecti
on o
f ta
king
you
r id
ea, p
rod
uct,
or
serv
ice
from
con
cep
t to
mar
ket,
tak
e th
e ti
me
to in
vest
a
por
tion
of
your
sca
rce
reso
urce
s–in
clud
ing
you
r p
assi
on, c
reat
ivit
y, e
nerg
y, m
oney
, and
tim
e–to
fi
ndin
g o
ut e
very
thin
g y
ou p
ossi
bly
can
ab
out
the
mar
ket
and
cus
tom
ers
you
wan
t to
ser
ve.”
FAC
TOID
The
Entr
epre
neur
’s P
ath
182
TH
E R
ISK
19
Wh
aT P
ro
BLE
M a
rE
you
So
Lvin
g a
nd
fo
r W
ho
M?
As
ane
ntre
pren
eur
onth
epa
thto
suc
cess
,you
mus
tbe
able
to
art
icul
ate
the
mar
ketp
robl
emy
oua
retr
ying
tos
olve
.Pr
ove
toy
ours
elfa
ndo
ther
sth
atth
ere
isr
easo
nabl
eba
sis
for
belie
ving
that
the
peop
lea
ndc
ompa
nies
inth
em
arke
tyou
pl
anto
ser
vew
illp
ayy
our
com
pany
for
your
sol
utio
nto
the
prob
lem
they
hav
e.
Itis
n’tt
osa
yth
aty
our
prod
ucto
rse
rvic
eca
n’tb
eth
ese
cret
sa
uce
iny
our
com
pany
’ssu
cces
s.M
any
times
itis
,but
al
way
s,a
lway
svi
ewp
rodu
cts
and
tech
nolo
gies
inth
eco
ntex
tof
the
mar
ketp
lace
and
the
need
sof
pot
entia
lcus
tom
ers.
As
you
thin
kab
outy
our
big
idea
,par
aphr
asin
gth
ew
ords
of
ent
repr
eneu
ran
dau
thor
,Guy
Kaw
asak
iin
his
book
The
ar
t of t
he s
tart
,“W
hat’s
the
big
prob
lem
,and
wha
t’sy
our
big
solu
tion?
” Is
the
mar
ketc
lam
orin
gfo
ra
solu
tion
that
you
rpr
oduc
t and
ser
vice
sol
ves?
Is
this
mar
ketl
arge
eno
ugh
to
crea
tea
bus
ines
s?
Ano
ther
way
tolo
oka
tthi
sis
sue
isa
sfo
llow
s:Y
ouh
ave
apr
oduc
tt h
ats
olve
sa
p rob
lem
i nt h
em
arke
t.H
owl a
rge
i st h
em
arke
t?I s
th
e pr
oduc
t/mar
ket c
ombi
natio
n la
rge
enou
ghto
mer
it fo
rmin
g a
com
pany
?R
emem
ber,
apr
oduc
tdoe
sno
tmak
ea
com
pany
.
Let’s
ass
ume
that
you
’ve
perf
orm
edth
ean
alys
isa
ndle
gwor
kto
s h
owh
owy
our
c om
pany
’sp r
oduc
tsa
nds
ervi
ces
c an
s olv
eb i
gpr
oble
ms
ina
larg
em
arke
t.W
hat’s
nex
t?W
hats
teps
do
you
t ake
t om
ake
y our
bus
ines
sb e
one
oft
hes
even
i nt e
nt h
atg
ets
t hro
ugh
t he
fi rst
24
mon
ths
a nd
g oes
on
t os
urvi
vefi
vey
ears
or
mor
e?H
owd
oyo
ufin
dth
epo
thol
esa
head
oft
ime?
ThE
EnTr
EPr
EnEu
r’S
riS
k a
SSES
SMEn
TTo
say
that
ent
repr
eneu
rial
bus
ines
ses
are
risk
yis
kin
dof
like
say
ing
the
sky
isb
lue.
Fro
md
ayo
ne,e
very
new
co
mpa
nyfa
ces
risk
s.
Hig
hgr
owth
sta
rt-u
psth
atg
ain
trac
tion,
attr
acte
quity
cap
ital
and
grea
tem
ploy
ees,
and
win
the
confi
denc
eof
ear
lya
dopt
ers
dos
obe
caus
eth
eyh
ave
dete
rmin
edw
here
th
eri
sks
are
ate
very
sta
gea
long
th
eE
ntre
pren
euri
alP
ath
and
have
de
velo
ped
tact
ical
and
str
ateg
icp
lans
to
man
euve
r th
roug
h.
Your
com
pany
will
face
five
are
as o
f ris
k: p
rodu
ct,
mar
ket,
bus
ines
s, fi
nanc
e, a
nd e
xecu
tion
.
Pro
duct
: Ata
ngib
leo
bjec
t,te
chno
logy
,ors
ervi
ceo
ffere
dfo
rsal
e.
Mar
ket:
Ac
omm
erci
ala
ctiv
ityw
here
goo
dsa
nds
ervi
ces
are
sold
.
Bus
ines
s:A
com
mer
cial
ent
erpr
ise
that
pro
duce
sa
prod
uct
ors
ervi
ceto
be
sold
toa
mar
ket.
Fin
ance
: Th
eca
pita
land
cas
hflo
wr
equi
red
toa
chie
ve
mile
ston
esth
atle
adto
suc
cess
.
Exe
cuti
on:T
hee
xper
ienc
e,s
kills
,and
pro
cess
esr
equi
red
toc
arry
out
ab
usin
ess
plan
.
The
Entr
epre
neur
’s P
ath
202
TH
E R
ISK
21
It’s
als
oa
give
nth
atp
redi
ctio
nsa
reim
perf
ecta
ndth
at
ther
ew
illb
epl
enty
ofs
urpr
ises
and
mis
take
sal
ong
the
way
,bu
tify
ous
tart
out
ant
icip
atin
gth
atth
ese
wil
locc
ura
nd
cond
ucts
cena
rio
plan
ning
inc
ase
they
do,
you
wil
lgre
atly
en
hanc
eyo
urc
hanc
eso
fsuc
cess
.
The
poin
tis,
ify
ouw
antt
oat
trac
tinv
esto
rs’a
ttent
ion,
an
ticip
ate
and
quan
tify
risk
san
dal
low
for
the
inev
itabi
lity
of
unex
pect
ede
vent
sin
you
rbu
sine
ssp
lan
and
busi
ness
pitc
h.
Man
y en
trep
rene
urs
are
used
to
bei
ng
sub
ject
mat
ter
exp
erts
–esp
ecia
lly if
the
y ar
e in
a t
echn
olog
y fi
eld
. Ins
tead
of
tryi
ng
to s
how
eve
ryon
e w
hat
you
do
know
, be
coac
hab
le. A
sk q
uest
ions
and
list
en t
o fi
nd
out
wha
t yo
u d
on’t
kno
w. I
t m
ay b
e a
muc
h lo
nger
con
vers
atio
n th
an y
ou e
xpec
t.
ThE
EnTr
EPr
EnEu
r’S
riS
k a
SSES
SMEn
T Pr
oC
ESS
The
Ent
repr
eneu
r’s
Ris
k A
sses
smen
tis
ath
ough
tpro
cess
w
hich
gui
des
you
thro
ugh
deve
lopi
nga
men
talf
ound
atio
nfo
ryo
urc
ompa
ny’s
busi
ness
pla
nan
dca
pita
lstr
ateg
y.
The
follo
win
gis
not
inte
nded
tob
ea
cook
book
for
risk
as
sess
men
t,bu
trat
her
ath
ough
tsta
rter
toh
elp
you
thin
klik
ean
inve
stor
iny
our
busi
ness
,whi
chin
av
ery
real
way
you
are
.
Kee
pin
min
d th
e pa
thth
atw
e ou
tlin
edin
Cha
pter
1a
s yo
ure
adth
isc
hapt
era
ndr
efer
bac
kto
Cha
rt 1
.2.
Pr
oo
f-o
f-C
on
CEP
T ST
ag
E r
iSk
Ris
k P
rofil
e:A
tthe
Pro
of-o
f-C
once
ptS
tage
,you
hav
ea
new
pr
oduc
tor
tech
nolo
gyth
ats
eem
sto
hav
em
arke
tpot
entia
l.Yo
uha
veli
mite
dfin
anci
alr
esou
rces
and
,unl
ess
you
have
fo
unde
da
com
pany
bef
ore,
you
rex
pert
ise
inta
king
ap
rodu
ct
ors
ervi
cefr
omc
once
ptto
mar
keti
spr
obab
lyli
mite
d.
The
pro
duct
ris
k is
t hat
t he
p rod
ucto
rs e
rvic
em
ayn
ot
befe
asib
le,m
ayla
cku
niqu
equ
alit
ies
that
can
notb
ea d
equa
tely
pro
tect
ed,o
rm
ayb
et o
od i
fficu
lto
re x
pens
ive
t o
prod
uce
inq
uant
ity.
The
mar
ket
risk
isth
atth
een
trep
rene
urh
asli
mit
ed
u nde
rsta
ndin
go r
kno
wle
dge
o ft h
em
arke
tand
ove
rsta
tes
t he
s ize
or
g row
thp
oten
tial
.
The
bus
ines
s ri
sk i
sth
ata
gre
atp
rodu
cto
rte
chno
logy
d o
esn’
talw
ays
t ran
slat
ei n
toa
gre
atb
usin
ess.
The
fina
nce
risk
isth
atfu
ndin
gfo
rP
roof
-of-
Con
cept
is
hard
tofi
nd.
The
exe
cuti
on r
isk
isth
atth
e in
nova
tor
ore
ntre
pren
eur
may
l ack
bus
ines
ss k
ills
.
You
gath
ere
vide
nce
top
rove
(or
disp
rove
)tha
tyou
rte
chno
logy
or
prod
ucti
svi
able
and
cap
able
ofs
olvi
ng
ap a
rtic
ular
pro
blem
f or
ap a
rtic
ular
mar
ket.
Y ou
h ave
de
velo
ped
anin
itia
lbus
ines
spl
ana
ndin
vest
edw
eeks
and
m
onth
sof
you
row
nti
me,
som
eof
you
row
nm
oney
,and
m
aybe
eve
nre
sour
ces
from
fam
ily
and
frie
nds.
The
Entr
epre
neur
’s P
ath
222
TH
E R
ISK
23
It’s
tim
eto
mak
eth
eca
ll.I
syo
urb
usin
ess
ago
,or
nog
o?I
fit
’sa
go,
you
are
rea
dyto
con
side
rSe
edS
tage
ris
k.
SEEd
STa
gE
riS
kR
isk
Pro
file:
The
fina
ldes
ign
ofth
epr
oduc
tor
serv
ice
isc
ompl
ete
and
your
init
ialb
usin
ess
plan
isin
pla
ce.
The
com
pany
’sm
anag
emen
ttea
mis
inco
mpl
ete.
Wit
hno
pr
oduc
trev
enue
s,th
eco
mpa
nyis
bur
ning
thro
ugh
cash
and
ot
her
reso
urce
s.
The
pro
duct
ris
k is
that
the
com
pany
isfo
cuse
don
pr
oduc
tinn
ovat
ion
rath
erth
anb
usin
ess
deve
lopm
ent.
Inte
llec
tual
pro
pert
yri
ghts
rem
ain
aco
ncer
n.
The
mar
ket
risk
i st h
atu
nrea
list
icm
arke
tstu
dyr
esul
ts
c aus
em
isal
loca
tion
ofs
carc
er e
sour
ces.
The
bus
ines
s ri
sk i
sth
eco
mpa
nyla
cks
dept
hin
bus
ines
sf o
rmat
ion
a nd
c om
mer
cial
izat
ion.
The
fina
nce
risk
isth
atc
ash
flow
isa
pro
blem
and
See
dSt
age
fund
ing
isd
iffic
ultt
ofin
dan
dat
trac
t.
The
exe
cuti
on r
isk
isth
atth
em
anag
emen
ttea
mis
i n
com
plet
ea n
ds t
retc
hed
t hin
.Inv
esto
rsa
rel o
okin
gfo
rex
peri
ence
dte
ams,
but
the
com
pany
can
’thi
reth
at
expe
rien
ceu
ntil
itr
ecei
ves
fund
ing.
As
t he
c om
pany
mov
esf r
omS
eed
t oS
tart
upS
tage
,d e
velo
pmen
toft
hep
rodu
ctp
roto
type
con
tinu
es.
STa
rTu
P S
Tag
E r
iSk
Ris
k P
rofil
e:T
hec
ompa
nyc
onti
nues
tod
evel
opth
epr
oduc
tpro
toty
pe,w
orki
ngto
war
dsp
ecifi
edm
iles
tone
co
mpl
etio
nda
tes.
Sig
nific
ante
xpen
ses
are
incu
rred
wit
hno
pr
oduc
t-re
late
dre
venu
es.C
ompa
nies
that
pro
gres
sto
the
Star
tup
Stag
e,u
sual
lye
xper
ienc
eth
eir
risk
iest
pre
-rev
enue
p o
inti
nt h
e“ V
alle
yo f
Dea
th.”
The
pro
duct
ris
k is
that
as
the
prod
ucto
rse
rvic
ead
vanc
esfr
omd
evel
opm
enti
nto
prod
ucti
on,n
ews
kill
sar
ene
eded
.
The
mar
ket
risk
isth
atfi
eld
test
sw
ith
cust
omer
sar
eno
tpo
siti
veo
rth
atc
ompe
tito
rsr
espo
ndm
ore
rapi
dly
than
ex
pect
ed.
The
bus
ines
s ri
sk i
sth
ata
sde
cisi
ons
for
stra
tegi
cpa
rtne
rshi
ps,l
icen
sing
agr
eem
ents
,and
cha
nnel
str
ateg
ies
are
need
ed, t
hefo
undi
ngm
anag
emen
t tea
mm
ayla
ck
prof
essi
onal
exp
erie
nce.
The
fina
nce
risk
isth
ats
igni
fican
t exp
ense
s oc
cur
wit
hout
pr
oduc
e re
venu
e be
ing
real
ized
.
The
exe
cuti
on r
isk
i st h
att h
ef o
unde
rsa
ndm
anag
emen
tte
amlo
sefo
cus
orr
esis
t im
plem
enti
nga
ppro
pria
teb
usin
ess
cont
rols
.The
foun
der
orm
embe
rso
fthe
ear
lyte
amm
aye
xit
the
busi
ness
.
The
Entr
epre
neur
’s P
ath
242
TH
E R
ISK
25
As
busi
ness
dev
elop
men
tmov
esin
tos
ales
,the
com
pany
bu
ilds
mar
keti
nga
ndc
usto
mer
rel
atio
nshi
psth
atp
osit
ion
itfo
rth
em
ovin
gth
epr
oduc
tint
oth
em
arke
tpla
ceto
gai
nac
cept
ance
from
pay
ing
cust
omer
s.
Ear
Ly S
Tag
E r
iSk
Ris
k P
rofil
e: T
hec
ompa
nyh
asli
mit
edp
rodu
ctr
even
ues
asth
epr
oduc
tent
ers
the
mar
ketp
lace
.
The
pro
duct
ris
k is
that
pro
duct
feat
ures
rev
eala
lim
ited
m
arke
t-dr
iven
func
tion
alit
yaf
ter
scal
ing
upp
rodu
ct.
The
mar
ket
risk
isth
atth
e re
alit
y of
the
mar
ket i
sra
rely
as
plan
ned.
Low
erm
arke
tacc
epta
nce,
agg
ress
ive
com
peti
tion
, and
lim
ited
rep
eat b
usin
ess
can
affe
ctr
even
ue.
The
bus
ines
s ri
sk i
sth
atth
eco
mpa
nyc
an’t
mak
eth
etr
ansi
tion
from
aS
eed
toS
tart
upe
nvir
onm
entt
oa
true
mod
eof
bus
ines
sop
erat
ion.
The
fina
nce
risk
isth
atth
ebu
rnr
ate
exce
eds
capi
tala
nd
man
agem
ent f
ocus
eso
n sa
les
inst
ead
ofp
rofit
s.
The
exec
utio
n ri
skis
that
foun
ding
man
agem
enta
nd
empl
oyee
sca
nnot
kee
pup
with
the
acce
lera
ting
pace
of
chan
gea
ndh
ave
diffi
culty
ada
ptin
gto
new
bus
ines
sst
rate
gies
.
As
prod
ucts
bec
ome
esta
blis
hed
inth
em
arke
tpla
ce,
phys
ical
dis
trib
utio
nis
fina
lize
dan
dre
quir
edp
rodu
ctio
nfa
cili
ties
are
con
trac
ted
orb
uilt
.The
com
pany
init
iate
squ
alit
yco
ntro
land
pro
cess
es.
gr
oW
Th S
Tag
E r
iSk
Ris
k P
rofil
e:T
hec
ompa
nyis
infu
llp
rodu
ctio
nw
ith
the
mai
npr
oduc
tand
ise
xpan
ding
dis
trib
utio
n.C
usto
mer
sar
epa
ying
for
prod
ucto
rse
rvic
e.M
anag
emen
tis
intr
ansi
tion
to
afo
rmal
org
aniz
atio
nst
ruct
ure.
The
pro
duct
ris
k is
t hat
pro
duct
f eat
ures
mus
tbe
r efin
ed
tos
tay
com
peti
tive
.The
dem
and
for
new
feat
ures
dra
ins
hum
ana
ndfi
nanc
ialr
esou
rces
.
The
mar
ket
risk
i st h
att h
ere
a re
p rob
lem
sw
ith
d ist
ribu
tion
,cus
tom
ers
atis
fact
ion,
or
f eat
ures
.Com
peti
tors
r e
spon
dt o
pro
duct
l aun
ch.
The
bus
ines
s ri
sk i
sth
atfo
cus
and
busi
ness
ski
lls
beco
me
mor
eo f
an
i ssu
ea s
ope
rati
onal
dem
ands
i ncr
ease
.
The
fina
nce
risk
isth
atp
oor
stra
tegi
eso
fres
ourc
eal
loca
tion
lim
itth
eab
ilit
yto
incr
ease
exp
erti
seth
roug
ht r
aini
ngo
rh i
ring
and
i mpa
cta
bili
tyt o
exe
cute
new
c o
ntra
cts
wit
hc u
stom
ers.
The
exe
cuti
on r
isk
isth
atth
est
artu
pbu
zzis
gon
e.H
irin
gne
wp
eopl
ean
din
crea
sed
focu
son
rol
esc
ause
sem
ploy
ees
t ob
ecom
em
ore
f ocu
sed
o nt h
eir
f unc
tion
alr
espo
nsib
ilit
ies
and
less
focu
sed
onth
eov
eral
lcom
pany
mis
sion
.The
e n
trep
rene
uria
lcul
ture
can
cha
nge.
As
t he
c om
pany
bec
omes
mor
ew
ell-
esta
blis
hed
i nt h
em
arke
tpla
ce,m
anag
emen
tmus
tcon
tinu
ally
i nno
vate
t os
tay
com
peti
tive
.
The
Entr
epre
neur
’s P
ath
262
TH
E R
ISK
27
LaTE
r S
Tag
E To
Ma
Tur
iTy
riS
kR
isk
Pro
file:
The
abi
lity
toin
nova
tein
all
are
as–
pro
duct
,m
arke
t,bu
sine
ss,fi
nanc
e,a
nde
xecu
tion
isv
ital
toth
efir
m’s
long
-ter
ms
usta
inab
ilit
yan
dgr
owth
.
The
pro
duct
ris
k is
that
vol
ume
decl
ines
as
prod
ucts
m
atur
e.
The
mar
ket
risk
i st h
att h
ee n
trep
rene
urh
asl i
mit
ed
unde
rsta
ndin
gor
kno
wle
dge
ofth
em
arke
tand
ove
rsta
tes
t he
s ize
or
g row
thp
oten
tial
.
The
bus
ines
s ri
sk i
st h
att h
ep r
essu
res
o fm
onth
lya
nd
quar
terl
yfin
anci
alg
oals
lim
itth
eab
ilit
yan
dre
sour
ces
to
i nno
vate
.
The
fina
nce
risk
isth
atp
oor
stra
tegi
eso
fres
ourc
eal
loca
tion
lim
itth
eab
ilit
yto
incr
ease
exp
erti
seth
roug
ht r
aini
ngo
rh i
ring
and
i mpa
cta
bili
tyt o
exe
cute
new
c o
ntra
cts
wit
hc u
stom
ers.
The
exe
cuti
on r
isk
isth
ata
str
uctu
red
corp
orat
een
viro
nmen
tmak
esit
dif
ficul
tto
inno
vate
.
Inr
eall
ife,
com
pani
esa
ren
otb
uilt
i na
str
aigh
tfor
war
dfa
shio
n.E
very
ent
repr
eneu
rial
sit
uati
onis
uni
que.
For
you
rc o
mpa
ny,t
her
isks
we’
ves
umm
ariz
edi n
t his
cha
pter
may
oc
cur
“out
ofo
rder
.”B
utr
esta
ssur
edth
eyw
illo
ccur
.
gu
idin
g P
rin
CiP
LES
of
aSS
ESS
ing
an
d
Ma
na
gin
g r
iSk
Eve
nth
ough
one
oft
heb
estt
hing
sab
oute
ntre
pren
eurs
hip
isth
atth
ere
are
noh
ard
and
fast
rul
es,t
hese
pri
ncip
les
wil
lin
crea
sey
our
effic
ienc
yan
dim
prov
eyo
urc
ompa
ny’s
odd
sof
sur
viva
l.
•B
ecom
ea
s tud
ento
fthe
Ent
repr
eneu
rial
Pat
h.•
Ant
icip
ate
a ddr
essi
ngt h
ep r
oduc
t,m
arke
t,a n
db u
sine
ss
activ
ities
and
ris
kso
feac
hst
age
befo
rem
ovin
gto
the
next
st
age
onth
epa
th.
•B
ecr
edib
lea
nda
void
com
mon
mis
conc
epti
ons
ofth
een
trep
rene
uria
lpro
cess
.•
Lea
rne
very
thin
gp o
ssib
lea
bout
t he
c ust
omer
.•
Ach
ieve
mar
ketv
alid
atio
nas
soo
nas
pos
sibl
e–
this
m
eans
sal
es.
•D
evel
opa
pro
fitab
leb
usin
ess
mod
el.
•S
ucce
ssd
epen
dso
np r
ofit;
p rofi
tdep
ends
on
g row
th.
•G
row
thd
epen
dso
nsa
les;
sal
esd
epen
don
new
in
nova
tion
s.•
Don
’tc o
unto
np a
rtne
rst o
do
y our
sel
ling
f or
y ou.
•A
ccep
ttha
trai
sing
as
igni
fican
tam
ount
ofc
apit
al
i nit
iall
yi s
not
nec
essa
ryo
re v
end
esir
able
.
The
Entr
epre
neur
’s P
ath
282
TH
E R
ISK
29
Co
nC
LuSi
on
Whe
nyo
uar
efo
undi
nga
com
pany
,pre
pari
ngm
enta
lly
for
unw
elco
me
oru
nexp
ecte
dev
ents
hel
psy
oua
ntic
ipat
esi
tuat
ions
so
that
whe
nyo
ufin
dyo
urc
ompa
nyin
the
heat
of
the
batt
le,y
ouh
ave
ahe
ads
tart
on
aga
me
plan
tota
ckle
an
d co
nque
r th
e ri
sks.
Thi
sm
enta
ltou
ghne
ssp
osit
ions
you
and
you
rbu
sine
ssto
be
am
ong
the
50p
erce
nto
fnew
com
pani
esth
ats
urvi
vefi
ve
year
sor
mor
e.
kEy
Po
inTS
B
uild
ing
apr
oduc
tand
bui
ldin
ga
busi
ness
are
no
tthe
sam
eth
ing.
Succ
essf
ulc
ompa
nies
turn
thei
rpr
oduc
tor
serv
ice
into
pro
blem
sol
ving
sol
utio
nsfo
rbi
gm
arke
ts.
All
new
com
pani
esfa
cer
isks
. It’s
up
toy
oua
sfo
unde
rto
und
erst
and
the
risk
sat
eve
rys
tage
on
the
path
and
then
tod
evel
opta
ctic
ala
nd
stra
tegi
cpl
ans
tom
aneu
ver
your
way
thro
ugh.
Exp
ect s
urpr
ises
eve
ryd
ay.
The
Entr
epre
neur
’s P
ath
30
“G
et
som
eo
ne
els
e t
o b
low
y
ou
r h
orn
an
d
the s
ou
nd
wil
l ca
rry
tw
ice
as
far.
”–
Will
Rog
ers
The
Entr
epre
neur
’s P
ath
323
TH
E C
ASH
33
The
Ent
repr
eneu
rial
Pat
his
mea
sure
din
term
sof
the
tim
eit
ta
kes
toa
chie
vea
cer
tain
leve
lofp
rofit
abil
ity.
Pro
fita
llow
sa
busi
ness
toc
over
exp
ense
s,p
ayin
vest
ors,
rep
ayd
ebts
,re
war
dke
yco
ntri
buto
rs,a
ndin
vest
toa
chie
vefu
ture
gro
wth
or
att
ract
ab
uyer
ifa
cqui
siti
onis
the
goal
.The
soo
ner
aco
mpa
nyr
each
esp
rofit
abil
ity
the
bett
er.
Star
ting
out
,mos
tcom
pani
esa
ren
otp
rofit
able
.In
fact
,m
any
star
tups
go
thro
ugh
ape
riod
ofs
igni
fican
tcap
ital
lo
sses
or
nega
tive
pro
fitab
ilit
y.U
ntil
the
com
pany
can
ra
ise
mon
eyth
roug
hre
venu
e,it
mus
tfind
oth
ers
ourc
eso
fca
pita
l.O
utsi
dein
vest
men
tis
achi
eved
by
targ
etin
gth
er i
ghts
ourc
eso
fcap
ital
att
her
ight
sta
geo
fbus
ines
sg r
owth
.
One
oft
hem
ostc
omm
onm
isco
ncep
tion
sby
ent
repr
eneu
rs
isth
atth
eym
ustr
aise
ag
reat
dea
lofc
apit
alu
pfr
ontt
os u
ccee
d.T
his
i ss
impl
yn o
ttru
e.T
here
are
man
y,m
any
entr
epre
neur
s–es
peci
ally
inth
eye
ars
befo
rea
nda
fter
th
e do
tcom
bub
ble–
who
sta
rted
wit
h ve
ryli
ttle
cap
ital
in
vest
men
t.
Com
pani
ess
uch
asC
isco
,Ora
cle,
Mic
roso
ft,M
ary
Kay
C
osm
etic
s,a
ndU
PS
are
mod
ern
era
busi
ness
suc
cess
st
orie
sth
ats
tart
edw
ith
rela
tive
lym
odes
tam
ount
sof
up-
fron
t inv
estm
ent.
Stan
ford
pro
fess
ors
Leon
ard
Bos
ack
and
Sa
ndy
Lern
er h
ad a
nee
d t
o e-
mai
l eac
h ot
her
but
cou
ld n
ot b
ecau
se e
ach
had
no
n-co
mp
atib
le s
yste
ms.
Aft
er a
chie
ving
p
roof
-of-
conc
ept,
the
y d
evel
oped
a r
oute
r to
acc
omp
lish
thei
r ne
ed. T
his
husb
and
and
w
ife
team
wen
t on
to
star
t C
isco
in 1
984
to
com
mer
cial
ize
thei
r in
nova
tion
. Fun
ded
th
roug
h cr
edit
car
ds
and
rev
enue
gro
wth
, C
isco
was
pro
fita
ble
wit
h ov
er $
3 m
illio
n in
ann
ual r
even
ue b
efor
e re
ceiv
ing
ven
ture
ca
pit
al f
rom
Seq
uoia
Cap
ital
in 1
987.
The
rea
rep
lent
yof
oth
erc
ompa
nies
that
sta
rted
wit
hle
ss
than
$10
,000
:App
leC
ompu
ter,
Del
lCom
pute
r,G
atew
ay,
Pap
aJo
hn’s
Piz
za,a
ndE
rnst
and
Jul
ioG
allo
,to
nam
eon
ly
afe
w.
Thi
si s
n’tt
om
inim
ize
a ne
ntre
pren
eur’s
nee
dt o
f ocu
so n
c a
pita
l.I t
j ust
em
phas
izes
t hat
t her
ea r
el o
tso
fway
sf o
rcr
eati
vea
ndfo
cuse
den
trep
rene
urs
tom
ove
thei
rid
eas
a lon
gt h
ep a
thf r
omb
righ
tide
at o
pro
toty
pew
itho
uth
avin
gto
rai
seb
undl
eso
fcap
ital
.
And
that
’sa
goo
dth
ing,
bec
ause
rai
sing
larg
eam
ount
sof
cap
ital
inth
ebe
ginn
ing
stag
eso
fthe
Ent
repr
eneu
rial
P
ath
isv
ery
diffi
cult
and
can
con
sum
efa
rto
om
uch
ofth
ee n
trep
rene
ur’s
t im
e.
The
Entr
epre
neur
’s P
ath
343
TH
E C
ASH
35
dEv
ELo
Pin
g a
Ca
PiT
aL
PLa
n
Fou
nder
s, F
rien
ds,
and
Fam
ily~
Ban
ks ~
Gra
nts
~ B
oots
trap
~A
ngel
Inv
estm
ent
~Ven
ture
Cap
ital
~ I
PO
Dev
elop
ing
aca
pita
lstr
ateg
yan
dpl
anb
ased
on
focu
sing
on
the
corr
ectc
apita
lsou
rce
and
iden
tifyi
nga
chie
vabl
em
ilest
ones
that
follo
wth
eflo
wo
fthe
Ent
repr
eneu
rial
Pat
hca
nsi
mpl
ifyth
eca
pita
lrai
sing
pro
cess
.
Take
am
omen
tto
revi
ewth
ech
artt
hatw
asp
rese
nted
in
Cha
pter
1.
Trav
ersi
ngth
eca
pita
lpat
his
not
usu
ally
acc
ompl
ishe
din
su
cha
str
aigh
tfor
war
dfa
shio
nas
isp
rese
nted
inth
isg
raph
.T
hep
rinc
iple
sar
eth
esa
me
for
each
bus
ines
s,b
utfr
omo
ne
c om
pany
t ot h
en e
xtt h
ee x
peri
ence
i sd
iffe
rent
.
Som
eco
mpa
nies
may
acc
eler
ate
thro
ugh
cert
ain
stag
es;
othe
rco
mpa
nies
may
mov
efo
rwar
dan
dth
ens
tep
back
war
dbe
fore
the
ym
ove
forw
ard
agai
n.A
nds
till
oth
er
com
pani
esf
alte
rbe
fore
the
yca
nra
ise
ore
arn
enou
gh
capi
tal
tos
ucce
ed.
Ca
PiT
aL
Ma
rk
ET-S
PEa
kTo
mov
eal
ong
the
path
ofd
evel
opin
gan
inve
stm
ent
stra
tegy
,you
firs
thav
eto
lear
nan
dun
ders
tand
the
lang
uage
of
the
capi
talm
arke
ts.
Ang
el inv
esto
r: A
nan
geli
nves
tor
isa
wea
lthy
indi
vidu
al
who
pro
vide
sca
pita
lfor
as
tart
upb
usin
ess
inr
etur
nfo
row
ners
hip
shar
esin
the
busi
ness
or
conv
erti
ble
debt
.A
ngel
sof
ten
orga
nize
into
ang
elg
roup
sor
ang
eln
etw
orks
to
sha
red
ealfl
ow,d
ued
ilig
ence
on
pote
ntia
linv
estm
ent
com
pani
es,a
ndto
poo
lthe
irin
vest
men
tcap
ital
.
Con
vert
ible
deb
t: S
ome
inve
stor
san
dba
nks
wil
loff
er
capi
tal u
nder
term
s of
con
vert
ible
deb
t. In
thes
e bo
rrow
ing
arra
ngem
ents
,the
lend
erh
asth
eop
tion
toc
onve
rtth
ede
bt
into
sha
res
ofe
quit
yat
as
peci
fied
poin
tin
tim
e.
Dry
pow
der:
Sav
vyin
vest
ors
ofte
n ho
ldb
ack
apo
rtio
n of
in
vest
men
tcap
ital
ina
ntic
ipat
ion
ofu
nexp
ecte
dev
ents
.
Equ
ity
Inve
stm
ent:
Inv
estm
ents
mad
ein
ret
urn
for
ape
rcen
tage
ow
ners
hip
inth
eco
mpa
ny,w
hich
usu
ally
take
sth
e fo
rmo
f com
mon
or
pref
erre
d sh
ares
of s
tock
.
Fir
st R
ound
, Se
cond
Rou
nd:
Thi
s or
dina
lnom
encl
atur
eis
use
dto
des
crib
em
ostv
entu
rer
ound
s.C
ompa
nies
wil
lca
sual
lyc
allt
heir
rou
nds
first
,sec
ond,
thir
d,e
tc.e
ven
Cha
rt 3
.1T
he C
apit
al P
ath
PROO
F-OF
-CO
NCEP
T
GROW
TH
MATU
RITY
EARL
Y
Foun
der
s, F
rien
ds,
Fa
mily
, and
“Fo
ols
”G
rant
sB
oo
tstr
apA
ngel
In
vest
or
Ven
ture
C
apit
al
BREA
K EVE
NSE
ED
Ban
ks
STAR
T-UP
The
Entr
epre
neur
’s P
ath
363
TH
E C
ASH
37
thou
ghth
ele
galt
erm
for
the
tran
sact
ion
ass
tate
din
cl
osin
gdo
cum
ents
and
am
endm
ents
toth
edo
cum
ents
of
inco
rpor
atio
nm
ayr
efer
toth
ema
sSe
ries
Ap
refe
rred
,Se
ries
Bc
omm
on,e
tc.
Gra
nts:
Gra
nts
com
efr
omb
usin
esse
s,fo
unda
tion
s,a
nd
publ
ica
ndp
riva
tes
ecto
ror
gani
zati
ons.
Som
egr
ants
req
uire
th
een
trep
rene
urto
com
eup
wit
hm
atch
ing
fund
sfr
om
othe
rso
urce
s.U
nlik
elo
ans
ore
quit
yca
pita
lfro
min
vest
ors,
gr
ants
do
noth
ave
tob
ere
paid
.
Init
ial P
ublic
Off
erin
g: I
PO
sta
nds
for
init
ialp
ubli
cof
feri
nga
ndo
ccur
s w
hen
aco
mpa
nyfi
rst s
ells
sha
res
ofit
sst
ock
toth
epu
blic
.
Mez
zani
ne:
Am
ezza
nine
equ
ity
inve
stm
entr
ound
is
gene
rall
y ch
arac
teri
zed
asth
e la
stv
entu
rer
ound
pri
orto
an
IPO
or
som
eot
her
posi
tive
exi
teve
nt.
Por
tfol
io:
Col
lect
ion
ofin
vest
men
tsm
ade
bya
ngel
sor
ve
ntur
eca
pita
list
s.
Synd
icat
ion:
Mul
tipl
ein
vest
ors,
whi
chm
ayin
clud
ein
divi
dual
ang
els,
ang
elg
roup
s,a
ndv
entu
rec
apit
alis
ts,
pool
thei
rfu
nds
top
rovi
dela
rger
inve
stm
ents
and
to
dive
rsif
yri
sk.
Thi
rd,
Fou
rth,
Fif
th,
etc.
and
Lat
er R
ound
s: E
quit
yr o
unds
t hat
f all
aft
ert h
es e
cond
rou
ndo
ffina
ncin
g.
Val
uati
on:
Valu
atio
nre
flect
sth
eva
lue
ofth
eco
mpa
ny
befo
rea
nda
fter
the
inve
stm
ento
fadd
itio
nale
quit
yca
pita
l.E
stab
lish
ing
the
valu
eof
ap
re-r
even
uec
ompa
ny
isc
hall
engi
nga
ndc
anb
ean
impe
dim
entt
oen
trep
rene
urs
rais
ing
capi
tal.
Ven
ture
Cap
ital
: Ve
ntur
eC
apit
alis
poo
led
inve
stm
ent
capi
talf
rom
inst
itut
iona
linv
esto
rsa
ndh
igh
netw
orth
in
divi
dual
s.B
ecau
seo
fthe
siz
eof
VC
fund
san
dop
erat
ing
cost
s,m
ostV
Cfu
nds
find
itm
ore
effic
ient
toin
vest
$2
mil
lion
or
mor
e.T
his
mea
nsth
eya
rem
ore
like
lyto
see
kou
thig
hgr
owth
tech
nolo
gyb
usin
esse
sth
ata
rep
rodu
cing
re
venu
ew
ith
the
exce
ptio
nof
life
sci
ence
s.
The
inve
stor
dri
ves
the
cap
ital
rai
sing
p
roce
ss. A
lway
s. T
he e
ntre
pre
neur
mus
t id
enti
fy a
nd im
ple
men
t re
alis
tic
mile
ston
es
to a
ttra
ct in
vest
ors
at e
ach
stag
e of
the
E
ntre
pre
neur
ial P
ath.
STa
gES
of
Ca
PiT
aL
We
are
now
rea
dyto
dis
cuss
inm
ore
deta
ilth
eso
urce
ofc
apita
lth
ata
rea
ssoc
iate
dw
ithe
ach
stag
eof
the
Ent
repr
eneu
rial
Pat
h.
Pro
of-o
f-C
once
pt S
tage
: F
ound
ers,
Fri
ends
, F
amily
, an
d “F
ools
”Th
ere
isa
nol
dsa
ying
am
ong
seas
oned
ent
repr
eneu
rs:
“Sta
rtin
ga
busi
ness
usu
ally
take
stw
ice
aslo
nga
ndc
osts
twic
eas
muc
has
you
thin
kit
will
.”I
tofte
nm
akes
sen
seto
kee
pyo
ur
d ay
j ob
a nd
p urs
uey
our
e ntr
epre
neur
iali
deas
afte
rh o
urs
i n
The
Entr
epre
neur
’s P
ath
383
TH
E C
ASH
39
the
begi
nnin
g.B
efor
eyo
uta
keo
uta
hom
eeq
uity
loan
,max
ou
tyou
rcr
edit
card
s,o
rta
pin
toy
our
401(
k),a
chie
ves
ome
posi
tive
prog
ress
tow
ard
the
Proo
f-of
-Con
cept
Sta
ge.
Rec
ogni
zeth
ats
oone
rorl
ater
,ify
oud
ecid
eto
kee
pgo
ing,
you
are
go
ing
toh
ave
tota
kep
erso
nalfi
nanc
ialr
isk.
Ant
icip
ate
need
ing
betw
een
$25,
000
and
$100
,000
toc
arry
you
rbus
ines
sid
ea
thro
ugh
the
Proo
f-of-C
once
ptS
tage
.Sev
eral
mill
ion
dolla
rsw
illb
ene
eded
ifth
eco
mpa
nyis
inth
elif
esc
ienc
esin
dust
ries.
Fin
anci
ngfo
r th
e P
roof
-of-
Con
cept
Sta
gep
rim
aril
y co
mes
fr
omth
efo
unde
r’sp
erso
nal re
sour
ces
and
som
etim
es
from
fri
ends
, fa
mily
, an
d so
-cal
led
“foo
ls.”
Fam
ily,
fr
iend
s,a
nda
cqua
inta
nces
wil
loft
enin
vest
ver
yea
rly
inth
eco
mpa
ny’s
life
as
thei
rtr
usta
ndin
tere
stis
inth
ein
divi
dual
th
anin
the
poss
ibil
ity
ofs
igni
fican
tmon
etar
yre
turn
s.
Man
yen
trep
rene
urs
appr
oach
frie
nds
and
fam
ily
mem
bers
(i
nso
me
entr
epre
neur
ialc
ircl
esk
now
nas
the
“Thr
eeF
s”–
frie
nds,
fam
ily,
and
fool
s).P
eopl
ew
hok
now
,tru
st,a
nd
like
you
may
be
mor
ew
illi
ngto
inve
st,m
aya
ccep
talo
wer
re
turn
on
thei
rin
vest
men
twit
hle
ssc
olla
tera
l(po
ssib
ly
none
) tha
n a
bank
, and
may
be
less
like
lyto
exa
min
e ev
ery
deta
ilo
fyou
rbu
sine
ssp
lan.
That
’sal
lwel
land
goo
d.J
ustb
eaw
are
that
rai
sing
mon
eyfr
om
peop
ley
ouk
now
may
als
ocr
eate
per
sona
land
em
otio
nali
ssue
st h
ata
ddt o
t he
a lre
ady
h eav
ys t
ress
off
ound
ing
ab u
sine
ss.
This
isn’
tto
say
you
shou
ldn’
tgo
this
rou
te.J
usta
pply
the
sam
ego
odb
usin
ess
prac
tices
and
arm
s-le
ngth
rel
atio
nshi
pto
th
isfi
nanc
ial a
rran
gem
ent a
s yo
u w
ould
toa
nyo
ther
.
Gen
eral
ly,y
ouw
illw
antt
oha
vea
nat
torn
eyp
repa
reth
eap
prop
riat
ele
gald
ocum
ents
.Con
side
rst
ruct
urin
gfr
iend
san
dfa
mil
ym
oney
as
debt
(wit
han
at-
mar
keti
nter
estr
ate
inst
ead
ofe
quit
y).D
ebth
olde
rsc
an’t
tell
you
how
tor
un
your
bus
ines
sli
kee
quit
ypa
rtne
rsc
an.
Pay
offt
hed
ebta
squ
ickl
yas
you
can
.Mos
tang
elin
vest
ors
and
vent
ure
capi
talis
tsd
ono
twan
tthe
ird
eals
bur
dene
dw
ith
com
mitm
ents
from
ear
lier
roun
ds.D
ueto
this
and
dep
endi
ng
onth
eam
ount
ofc
apita
lnee
ded
atth
iss
tage
,ofte
ntim
esa
co
nver
tible
deb
tto
equi
tyin
stru
men
tis
cons
truc
ted.
Som
etim
es e
ntre
pre
neur
s ra
ise
frie
nds
and
fam
ily
mon
ey in
exc
hang
e fo
r sh
ares
of
the
com
pan
y.
Ang
el in
vest
ors
are
far
less
like
ly t
o in
vest
if
they
hav
e to
dea
l wit
h lo
ts o
f sm
all s
hare
hold
ers
from
pri
or f
rien
ds
and
fam
ily r
ound
s. V
entu
re
cap
ital
ists
are
eve
n m
ore
opp
osed
to
it. B
e sm
art
and
dis
crim
inat
ing
whe
n at
trac
ting
cap
ital
.
Seed
Sta
ge:
Fou
nder
, F
rien
ds a
nd F
amily
, G
rant
s,
Ban
ks,
and
Ang
el I
nves
tors
Onc
eth
efe
asib
ilit
yof
the
prod
ucto
rse
rvic
eis
rea
sona
bly
prov
en,e
ntre
pren
eurs
nee
dad
diti
onal
out
side
cap
ital
to
take
thei
r id
eafr
omc
once
ptto
ap
rodu
cto
r se
rvic
e th
at
som
eone
wil
lbuy
.
Whe
ther
eco
nom
icti
mes
are
flus
hor
cha
lleng
ing,
you
rgo
al
asa
nen
trep
rene
urp
rogr
ess
from
Pro
of-o
f-C
once
ptin
toS
eed
Stag
em
ustb
eto
find
cre
ativ
ew
ays
tom
ove
your
bus
ines
sfo
rwar
dw
hile
mak
ing
18m
onth
sof
cas
hla
stfo
r24
.
The
Entr
epre
neur
’s P
ath
403
TH
E C
ASH
41
From
Pro
of-o
f-C
once
ptth
roug
hSe
edS
tage
,exp
ense
sac
cele
rate
.Th
eco
mpa
nyis
inp
rodu
ctd
evel
opm
entm
ode,
and
ther
ear
eno
reve
nues
.The
reis
are
ason
that
sea
sone
den
trep
rene
urs
and
star
tup
inve
stor
sso
met
imes
cal
lthi
sst
age
“the
Val
ley
ofD
eath
.”
Gra
nts:
SB
IR a
nd S
TT
R A
war
dsTh
efe
dera
lgov
ernm
ent’s
Sm
all B
usin
ess
Inno
vatio
n R
esea
rch
(SB
IR)a
ndS
mal
l Bus
ines
s Te
chno
logy
Tra
nsfe
r (S
TT
R)p
rogr
ams
can
bee
xcel
lent
sou
rces
ofe
arly
cap
itali
fth
eSe
edS
tage
com
pany
mee
tsth
ecr
iteri
aof
the
awar
d.
The
gov
ernm
entp
rovi
des
gran
tsto
sup
plem
entt
heli
mit
ed
rese
arch
and
dev
elop
men
t fun
ding
that
isa
vail
able
to
com
pani
esfr
omth
epr
ivat
ese
ctor
.
Add
ition
ally
,man
yfe
dera
lage
ncie
s,p
artic
ular
lyth
eD
epar
tmen
t of D
efen
se, a
relo
okin
g fo
r te
chno
logi
esa
nd
prod
ucts
that
mee
tgov
ernm
entn
eeds
and
hav
eco
mm
erci
al
appl
icat
ions
.Age
ncy
SBIR
and
STT
Rp
rogr
ams
have
pro
vide
dcr
itica
l,ea
rly
capi
talt
onu
mer
ous
entr
epre
neur
s.
All
fed
eral
ag
enci
es w
ith
an e
xtra
mur
al
rese
arch
and
dev
elop
men
t b
udg
et o
f m
ore
than
$10
0 m
illio
n (S
BIR
) or
$1
bill
ion
(STT
R)
mus
t p
arti
cip
ate
in t
hese
pro
gra
ms,
m
akin
g t
hem
the
larg
est
sour
ce o
f ea
rly
rese
arch
and
dev
elop
men
t fu
ndin
g f
or s
mal
l b
usin
esse
s in
the
US.
Ele
ven
dep
artm
ents
p
arti
cip
ate
in t
he S
BIR
pro
gra
m a
nd fi
ve
dep
artm
ents
par
tici
pat
e in
the
STT
R p
rog
ram
. To
get
her
they
aw
ard
mor
e th
an $
2 b
illio
n to
sm
all h
igh-
tech
bus
ines
ses
annu
ally
.
SBIR
and
ST
TR
gra
nts
are
very
com
peti
tive
.Sti
ll,e
very
ad
vanc
edte
chno
logy
ent
repr
eneu
rsh
ould
kno
we
noug
hab
outt
hese
pro
gram
sto
det
erm
ine
whe
ther
or
nott
he
com
pany
sho
uld
cons
ider
fede
ralg
rant
s.W
hen
aco
mpa
ny’s
obje
ctiv
esa
ndc
apab
ilit
ies
mat
chth
ere
quir
emen
tso
fthe
gr
anti
nga
genc
y,th
ese
fund
sca
npr
ovid
esi
gnifi
cant
off
-ba
lanc
es h
eetf
undi
ng.
Scie
ntis
tsa
ndin
vent
ors
from
res
earc
han
dde
velo
pmen
tor
uni
vers
ityb
ackg
roun
dsw
hoa
refa
mili
arw
ithg
rant
ap
plic
atio
nsa
ndr
epor
ting
find
SBIR
san
dST
TRs
ago
od
optio
n.E
ntre
pren
eurs
who
are
foun
ding
com
pani
esto
inve
nta
d r
ugo
rc o
mm
erci
aliz
ea
n ano
tech
nolo
gya
pplic
atio
nm
aya
lso
iden
tify
seek
ing
SBIR
or
STTR
gra
nts
asa
See
dst
age
prio
rity
.
The
gran
ts,w
hich
pro
vide
fina
ncia
lass
ista
nce
toc
ompa
nies
to
exe
cute
ac
erta
ins
cope
ofw
ork,
can
var
yfr
oma
genc
yto
ag
ency
.The
yco
ver
ara
nge
ofa
ctiv
ities
incl
udin
gre
sear
ch
and
deve
lopm
ent,
test
ing,
eva
luat
ion,
dem
onst
ratio
n,a
nd
may
eve
nin
clud
efu
ll-sc
ale
com
mer
cial
izat
ion.
The
sco
pe
ofw
ork
can
beti
ghtly
or
som
ewha
tloo
sely
defi
ned.
The
co
mpa
nyr
ecei
ving
the
gran
tdoe
sno
tgua
rant
eea
nou
tcom
e.
Gen
eral
lyP
hase
Ig
rant
saw
ard
betw
een
$100
,000
and
$1
50,0
00fo
rac
tivi
ties
ofa
bout
ay
ear
orle
ssin
dur
atio
n.
Pha
seI
Ig r
ants
are
up
t o$
750,
000
f or
t ypi
call
yu p
t o
two
year
s.P
hase
III
pro
ject
s en
com
pass
non
-SB
IR/S
TT
R
fund
ing
and
deri
vefr
om,e
xten
d,o
rlo
gica
lly
conc
lude
ef
fort
s pe
rfor
med
und
erp
rior
SB
IRc
ontr
acts
.
The
Entr
epre
neur
’s P
ath
423
TH
E C
ASH
43
The
rec
ipie
nts
ofS
BIR
/ST
TR
gra
nts
are
requ
ired
tor
epor
tpr
ogre
ssa
gain
stth
esc
ope
ofw
ork
wit
ha
final
rep
orta
tthe
en
dof
the
gran
t.A
slo
nga
sef
fort
isa
ppli
edin
goo
dfa
ith,
th
ere
isn’
tthe
req
uire
men
tto
mee
tcer
tain
obj
ecti
ves.
The
re
isn
ore
quir
emen
tfor
the
com
pany
tor
etur
nth
egr
antm
oney
if
pro
ject
obj
ecti
ves
are
nota
chie
ved.
SBIR
s an
d ST
TRs
are
not
appr
opri
ate
for
ever
y co
mpa
ny. I
t ca
n be
tim
e co
nsum
ing,
esp
ecia
lly
for
a st
artu
p co
mpa
ny w
ith
limit
ed h
uman
re
sour
ces,
to
appl
y fo
r an
SB
IR o
r ST
TR g
rant
. It
is n
ot a
goo
d id
ea f
or a
n en
trep
rene
ur t
o co
unt
on a
fed
eral
gra
nt a
s th
e m
ake-
or-b
reak
fu
ndin
g fo
r Se
ed S
tage
act
ivit
ies–
espe
cial
ly
if t
hat
entr
epre
neur
has
no
prio
r ex
peri
ence
ap
plyi
ng f
or f
eder
al g
rant
s. T
he le
ngth
y le
ad t
ime
for
gran
t ap
prov
al c
an a
lso
be a
si
gnifi
cant
issu
e fo
r en
trep
rene
urs
who
nee
d
capi
tal i
n a
cert
ain
tim
efra
me.
Fed
eral
age
ncie
sar
eal
way
slo
okin
gfo
rad
vanc
es
inte
chno
logy
;the
yar
en’t
look
ing
for
incr
emen
tal
impr
ovem
ents
.The
yw
antg
roun
dbre
akin
gle
aps
that
are
fa
ster
,les
sco
stly
,and
bet
ter
than
alt
erna
tive
s–an
dth
ere
are
alw
ays
alte
rnat
ives
.
Ina
ddit
ion
toS
BIR
san
dST
TR
s,th
ere
are
othe
rre
ques
ts
for
prop
osal
s(s
omet
imes
cal
led
soli
cita
tion
sor
RF
Ps)
and
ag
ency
ann
ounc
emen
tsth
atm
ayb
efo
ra
spec
ific
tech
nolo
gy
ore
ncom
pass
mul
tipl
ete
chno
logi
esa
ndm
ayb
efo
ra
spec
ific
tim
efr
ame
oro
pen
tor
espo
nse
for
year
s.
The
seo
ppor
tuni
ties
are
pos
ted
onli
neb
yth
ere
ques
ting
a g
ency
.Sav
vye
ntre
pren
eurs
use
t he
I nte
rnet
t ofi
gure
out
w
hich
gov
ernm
enta
genc
ies
and
depa
rtm
ents
mig
htb
ein
tere
sted
inth
eir
solu
tion
or
tech
nolo
gy.I
tis
poss
ible
to
dev
elop
rel
atio
nshi
psw
ith
the
prog
ram
man
ager
sw
ho
foll
owte
chno
logi
esli
key
ours
.The
ira
reas
ofi
nter
esta
nd
requ
irem
ents
are
pub
lic
info
rmat
ion.
Ify
oud
eter
min
eth
aty
ouw
antt
ore
ply
toa
nop
enS
BIR
o r
ST
TR
gra
nto
rf o
rs o
me
o the
rg o
vern
men
treq
uest
f or
prop
osal
,you
may
wan
tto
cons
ider
see
king
the
advi
ce
a nd
a ssi
stan
ceo
fsom
eone
who
has
bee
ns u
cces
sful
att
he
proc
ess
prev
ious
ly. T
his
coul
d be
ano
ther
ent
repr
eneu
r, a
trus
ted
men
tor
ina
uni
vers
ity
orr
esea
rch
inst
itut
ion,
or
apr
ofes
sion
alg
rant
con
sult
ant.
Onc
ea
com
pany
has
obt
aine
don
egr
antw
ith
ana
genc
y,th
ere
iso
ften
the
oppo
rtun
ity
to
purs
uem
ore
oppo
rtun
itie
s.
Whe
nan
ent
repr
eneu
rle
arns
how
to
deve
lop
ane
ffec
tive
gr
ant
prop
osal
for
the
fed
eral
gov
ernm
ent,
that
kno
wle
dge
is
appl
icab
leto
oth
erty
pes
ofg
rant
s.
Ban
k L
ines
of
Cre
dit
and
Con
vert
ible
Not
esL
ocal
ban
ks,a
ndto
som
eex
tent
nat
iona
lone
s,m
ayb
ea
sour
ceo
flin
eso
fcre
dita
ndtr
adit
iona
ldeb
t.So
me
inst
itut
ions
and
ang
elin
vest
ors
empl
oyc
onve
rtib
len
otes
,w
hich
are
loan
sth
ata
rec
onve
rtib
leto
equ
ity
atth
eop
tion
of
the
lend
ero
rw
hen
cert
ain
even
tso
ccur
,suc
has
a
subs
eque
ntin
vest
men
t rou
nd.
The
Entr
epre
neur
’s P
ath
443
TH
E C
ASH
45
As
wit
han
ylo
ans
mad
eto
aS
eed
Stag
eco
mpa
ny,e
xpec
ta
conv
erti
ble
note
toc
arry
an
abov
e-m
arke
tint
eres
trat
ein
con
side
rati
ono
fyou
rco
mpa
ny’s
ris
k.D
epen
ding
on
the
term
sof
the
loan
or
conv
erti
ble
note
s,if
ac
ompa
nyla
cks
the
cash
flow
tom
ake
peri
odic
pay
men
ts,t
here
may
be
prov
isio
nsfo
rth
ein
tere
stto
acc
rue
for
ape
riod
oft
ime
or
u nti
lthe
nex
tfun
ding
eve
nt.
Ang
el I
nves
tors
Ang
elin
vest
ors
are
accr
edit
ed inv
esto
rs(t
hink
hig
hne
tw
orth
indi
vidu
als
who
are
mil
lion
aire
spl
us)w
hop
utth
eir
own
mon
eya
ndti
me
into
com
pani
esth
ata
rea
tthe
see
ds t
age
a nd
b eyo
nd.
Ang
els
inve
stin
See
d,S
tart
up,a
ndE
arly
Sta
ge
oppo
rtun
itie
s.T
heir
and
any
equ
ity
inve
stor
’sa
ppro
ach
at
t his
sta
gei s
t op
rovi
dea
nom
inal
am
ount
ofc
apit
alt o
see
ho
wth
eco
mpa
nyp
rogr
esse
s.
Ac
halle
nge
for
entr
epre
neur
sis
that
eve
nth
ough
ang
el
inve
stor
sdo
pro
vide
abo
ut9
0pe
rcen
toft
heo
utsi
dee
quity
th
atfu
nds
the
initi
als
tage
sof
ent
repr
eneu
rial
bus
ines
ses,
in
divi
dual
ang
elin
vest
ors
are
alm
osti
mpo
ssib
lefo
ren
trep
rene
urs
toid
entif
yan
dre
ach.
Ang
els
tend
top
rote
ct
thei
rpr
ivac
y.
The
Ang
elC
apita
lAss
ocia
tion
(AC
A),
the
trad
eor
gani
zatio
nof
Nor
thA
mer
ican
ang
elin
vest
ors
post
sa
mem
ber
grou
pdi
rect
ory
(ww
w.a
ngel
capi
tala
ssoc
iatio
n.co
m).
Som
ean
gel
grou
psh
ave
web
site
sth
atd
efine
thei
rin
vest
men
tstr
ateg
yan
dof
fer
apr
oces
sfo
rbu
sine
ssp
lan
subm
issi
on.
The
Ang
el C
apit
al A
ssoc
iati
on (
AC
A)
is
a p
rofe
ssio
nal a
llian
ce o
f m
ore
than
165
or
gan
ized
ang
el g
roup
mem
ber
s re
pre
sent
ing
ab
out
7,0
00
acc
red
ited
inve
stor
s. T
hese
an
gel
gro
ups
fund
hun
dre
ds
of c
omp
anie
s a
year
and
hav
e an
ong
oing
por
tfol
io o
f 5,
00
0
com
pan
ies
acro
ss t
he U
S an
d C
anad
a.
AC
Am
embe
rgr
oups
rep
orta
vera
ging
abo
uts
ixin
vest
men
ts
per
year
inb
etw
een
thre
ean
dfo
urc
ompa
nies
,ave
ragi
ng
abou
t$20
0,00
0pe
rin
vest
men
trou
nd.
Ifa
san
ent
repr
eneu
r,yo
uth
ink
ofa
ngel
inve
stor
sas
fli
nty-
eyed
wea
lthy
indi
vidu
als
who
are
out
to“
stea
l”y
our
com
pany
,rea
djus
tyou
rth
inki
ng.B
esid
esb
eing
abo
ut
the
only
sou
rce
ofS
eed
and
Star
tup
Stag
eca
pita
laro
und,
an
geli
nves
tors
kno
wh
owto
hel
pco
acha
ble
entr
epre
neur
ssu
ccee
d.R
emem
ber,
man
yan
gels
bec
ame
wea
lthy
by
bein
gsu
cces
sful
ent
repr
eneu
rsth
emse
lves
.
Ang
els
are
inve
stin
gto
mak
ea
high
rat
eof
ret
urn
give
nth
eri
skin
ess
ofth
ein
vest
men
tsth
eym
ake.
Ret
urn
on
inve
stm
enti
sth
epr
imar
ym
easu
reo
fthe
irs
ucce
ssb
utn
ot
the
only
rea
son
that
ang
els
inve
st.M
any
ange
linv
esto
rs
mad
eth
eir
mon
eya
sen
trep
rene
urs.
The
yen
joy
the
chal
leng
ean
dth
eri
sko
fthe
ent
repr
eneu
rial
env
iron
men
tan
dli
kem
ento
ring
and
adv
isin
gen
trep
rene
urs.
Man
yan
gels
als
o ar
e m
otiv
ated
tog
ive
back
toth
eir
com
mun
itie
sby
hel
ping
pro
mis
ing
new
com
pani
ess
tart
up.
The
Entr
epre
neur
’s P
ath
463
TH
E C
ASH
47
Ang
els
inve
stin
depe
nden
tly,
alo
ngsi
deo
ther
inve
stor
s,o
ras
mem
bers
ofo
rgan
ized
ang
elg
roup
s.O
rgan
ized
ang
el
grou
psh
ave
prol
ifer
ated
sin
ceth
ela
te1
990s
;the
rea
ren
ow
grou
psin
alm
oste
very
sta
te.T
hey
serv
eas
ac
atal
ystf
or
Seed
and
Sta
rtup
Sta
gein
vest
ing.
Ang
els
and
ange
lgro
ups
are
asu
niqu
ean
ddi
ffer
enta
sar
een
trep
rene
urs
and
star
tup
com
pani
es.B
utw
heth
erfr
om
Sili
con
Vall
eyo
rO
klah
oma,
ang
elin
vest
ors
are
alm
ost
alw
ays
look
ing
for
the
sam
eth
ing–
apa
ssio
nate
ent
repr
eneu
rw
ith
anid
eath
ats
olve
sa
big
prob
lem
for
abi
gm
arke
tand
a
five
to3
0Xr
etur
non
thei
rin
vest
men
twit
hin
thre
eto
five
y e
ars,
dep
endi
ngo
nt h
ec o
mpa
ny’s
sta
geo
fgro
wth
and
i ts
prio
rca
pita
linv
estm
ents
.
Wit
hso
litt
lev
entu
rec
apit
alm
oney
bei
ngin
vest
edin
pre
-re
venu
eb u
sine
sses
,ent
repr
eneu
rsn
eed
a nge
linv
esto
rs
mor
eto
day
than
eve
rbe
fore
–for
thei
rm
oney
,the
irc
onta
cts,
th
eir
expe
rtis
e an
d ex
peri
ence
, and
thei
r m
ento
ring
.T
hat’s
why
itis
ver
yim
port
antf
ore
very
ent
repr
eneu
rto
un
ders
tand
wha
t mot
ivat
esa
ngel
s,h
owth
eyli
keto
rec
eive
i n
form
atio
n,w
hati
nfor
mat
ion
t hey
wan
tto
r ece
ive,
and
how
to
wor
kw
ith
them
eff
ecti
vely
.
Som
ean
gelg
roup
sar
eor
gani
zed
asn
etw
orks
,whi
ch
e ach
mem
ber
mak
esi n
divi
dual
dec
isio
nso
np o
tent
ial
inve
stm
ents
. Oth
erg
roup
s ar
e or
gani
zed
asfu
nds
whi
ch
oper
ate
sim
ilar
too
ther
inve
stm
entf
unds
.
Seed
Step
Ang
els
isa
nO
klah
oma
ange
lgro
upo
facc
redi
ted
ange
l inv
esto
rsth
atp
rovi
dec
apit
al, s
trat
egic
adv
ice,
and
men
tori
ngto
em
ergi
ngg
row
thc
ompa
nies
toh
elp
them
ac
hiev
em
arke
tlea
ders
hip.
Typ
ical
inve
stm
ents
ran
gefr
om
$50,
000
to$
500,
000
asa
gro
upw
ith
indi
vidu
als
havi
ng
opti
ons
for
side
-by-
side
inve
stm
ents
.
Reg
ardl
ess
ofth
eir
inve
stm
entm
odel
,ang
els
usua
lly
inve
st
fair
lyc
lose
toh
ome.
The
yar
ein
volv
edw
ith
thei
rpo
rtfo
lio
com
pani
esa
ndp
refe
rto
be
wit
hin
atw
oor
thre
eho
ur
driv
eof
thei
rin
vest
men
ts.G
roup
mem
bers
det
erm
ine
the
indu
stri
esw
here
they
wan
tto
inve
st.L
ife
scie
nces
,med
ical
de
vice
s,in
form
atio
nte
chno
logy
,and
sof
twar
ear
eth
ein
dust
ries
that
inte
rest
man
yan
gelg
roup
s.
Ang
els
like
toc
o-in
vest
wit
hot
her
ange
ls,a
ngel
gro
ups,
an
dso
met
imes
wit
hve
ntur
eca
pita
list
s.T
hese
syn
dica
ted
r oun
dso
ffer
effi
cien
cies
f or
b oth
t he
i nve
stor
sa n
den
trep
rene
urs.
Iti
sco
mm
onfo
ron
egr
oup
ofth
ein
vest
ors
tota
keth
ele
ad,s
truc
ture
the
deal
term
s;p
erfo
rmd
ue
dili
genc
e,a
ndh
andl
eth
ecl
osin
g.
Synd
icat
ion
crea
tes
larg
erin
vest
men
trou
nds
than
any
si
ngle
ang
elo
rgr
oup
wou
ldr
aise
.Inv
esto
rsb
enefi
tfr
oma
ddit
iona
lqua
lity
dea
lflow
and
from
hav
ing
extr
aha
nds,
eye
s,a
nde
xper
tise
for
due
dili
genc
e.A
ddit
iona
li n
vest
ors
p rov
ide
a ddi
tion
alv
alid
atio
no f
ag
ood
i nve
stm
ent
oppo
rtun
ity.
Lar
ger
roun
dsa
lso
allo
wa
ngel
sto
kee
pso
me
dry
pow
der
for
unan
tici
pate
d ev
ents
.
The
Entr
epre
neur
’s P
ath
483
TH
E C
ASH
49
For
the
entr
epre
neur
, syn
dic
ated
rou
nds
may
mea
n th
at le
ss t
ime
is r
equi
red
to
rais
e m
ore
mon
ey. R
aisi
ng c
apit
al t
akes
the
en
trep
rene
ur a
way
fro
m b
uild
ing
a p
rod
uct
and
gai
ning
cus
tom
ers.
It is
to
ever
yone
’s
adva
ntag
e, e
spec
ially
the
ent
rep
rene
ur, t
o ho
ld t
his
pro
cess
to
a m
inim
um.
Inte
rest
ingl
y,A
ngel
Cap
ital
Ass
ocia
tion
mem
bers
rep
ort
that
ina
bout
60
perc
ento
fthe
ird
eals
,the
yco
-inv
estw
ith
vent
ure
capi
tali
sts.
The
AC
Ad
irec
tory
isa
goo
dpl
ace
tob
egin
the
sear
chfo
ran
geli
nves
tors
iny
our
geog
raph
y,b
utth
ebe
stw
ayto
mak
eco
ntac
twit
han
geli
nves
tors
isth
roug
hre
ferr
als.
Star
tup
Stag
e: G
rant
s, A
ngel
Inv
esto
rs,
Boo
tstr
appi
ngA
tthe
Sta
rtup
Sta
geit
will
be
impo
rtan
tto
prio
ritiz
eth
ebu
sine
sss
trat
egie
sth
atb
estfi
tthe
mos
tapp
ropr
iate
fina
ncin
gst
age
and
sour
ce.T
hec
ompa
nyis
con
tinui
ngto
dev
elop
the
prod
uctp
roto
type
incu
rrin
gsi
gnifi
cant
exp
ense
with
no
prod
uct
rela
ted
reve
nues
.The
com
pany
isu
sual
lya
tthe
dee
pest
poi
nt
inth
e“V
alle
yof
Dea
th”
atth
iss
tage
.Bus
ines
sst
rate
gies
cou
ld
incl
ude
licen
sing
,str
ateg
ica
llian
ces
orp
artn
ersh
ips,
or
the
purs
uito
fab
usin
ess
vent
ure.
The
Star
tup
requ
ires
suf
ficie
nts
tart
upc
apita
lto
initi
ate
busi
ness
ope
ratio
ns.T
hep
roto
type
pro
vide
sth
eba
sis
for
final
an
alys
iso
ftec
hnic
alfe
asib
ility
,cos
t,an
dm
arke
tacc
epta
nce.
Boo
tstr
appi
ngB
oots
trap
ping
–pay
ing
asy
oug
ow
ith
reve
nue
inst
ead
of
d ebt
or
e qui
tyc
apit
al–s
tret
ches
you
rc o
mpa
ny’s
res
ourc
es
–bo
thfi
nanc
iala
ndo
ther
wis
e–
tofu
ndy
our
Seed
Sta
ge
grow
th.B
oots
trap
ping
can
be
one
ofth
em
ostc
oste
ffec
tive
w
ays
toh
aste
nyo
urc
ompa
ny’s
pos
itiv
eca
shfl
ow,r
educ
ing
the
busi
ness
’sr
equi
rem
entf
ore
quit
yca
pita
lor
debt
.
From
day
one
,mak
eef
fect
ive
cash
man
agem
enta
pri
ority
.The
su
rviv
alo
fyou
ryo
ung
com
pany
isd
eter
min
eda
sm
uch
byth
ew
ayy
oup
rior
itize
the
use
ofs
carc
ere
sour
ces–
and
noth
ing
is
mor
esc
arce
than
cas
hat
this
poi
nte
xcep
tper
haps
you
rho
urs
ofs
leep
–as
itis
by
the
prod
ucts
you
cre
ate.
Hol
d fi
xed
cost
s to
a m
inim
um:
• Sh
are
office
ser
vice
s an
d e
qui
pm
ent.
• C
o-lo
cate
wit
h an
othe
r co
mp
any
or m
ove
to a
bus
ines
s in
cub
ator
.•
Use
the
com
put
ers
and
ser
vers
you
hav
e.•
Del
ay c
apit
al p
urch
ases
.•
Leas
e in
stea
d o
f p
urch
ase.
• N
egot
iate
fee
s an
d t
erm
s w
ith
all
se
rvic
e p
rovi
der
s
Trea
t va
riab
le c
osts
like
you
are
spe
ndin
g yo
ur o
wn
mon
ey–w
hich
you
are
:•
Seek
tra
de
cred
it t
erm
s w
ith
key
sup
plie
rs.
• Sa
ve t
hous
and
s on
tra
vel b
y sm
art
sc
hed
ulin
g a
nd u
se o
f th
e In
tern
et, o
r d
on’t
tra
vel a
t al
l.•
Spea
k to
you
r lo
cal b
usin
ess
scho
ol
ab
out
inte
rnsh
ips.
And
by
the
way
,the
seti
psfo
rbo
otst
rapp
ing
are
exce
llen
tha
bits
top
ract
ice
whe
ther
you
are
boo
tstr
appi
ngo
rno
t.
The
Entr
epre
neur
’s P
ath
503
TH
E C
ASH
51
Ear
ly S
tage
: Ven
ture
Cap
ital
The
sed
ays,
ven
ture
cap
ital
ists
are
inst
itut
iona
linv
esto
rs
wit
ha
typi
cali
nves
tmen
tthr
esho
ldo
fatl
east
$2
mil
lion
in
exc
hang
efo
req
uity
ine
arly
and
late
rst
age
busi
ness
es.
The
ire
cono
mic
mod
elu
sual
lyd
oes
nots
uppo
rtin
vest
men
tin
pre
-rev
enue
sta
gec
ompa
nies
.VC
slo
okfo
ren
trep
rene
urs
who
hav
ea
t rac
kr e
cord
ofs
tart
ups
ucce
ss.
Iny
our
regi
on,i
tis
com
mon
tofi
nds
mal
ler
vent
ure
capi
tal
fund
sof
aro
und
$5to
$20
mill
ion.
Fun
dsin
this
ran
ge,m
ay
mak
esm
alle
rin
vest
men
ts.H
owev
er,t
heir
inve
stm
entp
roce
ss
and
inve
stm
entt
erm
sar
esi
mila
rto
larg
erV
Cfu
nds.
Sim
ilar
toa
ngel
s,v
entu
rec
apit
alis
tss
eek
are
turn
pot
enti
al
ofo
ver
ten
tim
esth
eir
inve
stm
enti
nab
outfi
vey
ears
.Lik
ean
geli
nves
tors
,VC
sli
keto
syn
dica
te.H
owev
er,t
here
are
a l
sov
entu
rec
apit
alf u
nds
t hat
do
n ots
yndi
cate
.
Toc
reat
een
ough
ups
ide
oppo
rtun
ity
toju
stif
yth
eir
effo
rt
and
reso
urce
s,V
Cs
need
toin
vest
$3
to$
5m
illi
ono
rm
ore
per
deal
.Thi
sm
eans
that
VC
sus
uall
ylo
okfo
rco
mpa
nies
th
ata
refu
rthe
ral
ong
the
grow
thc
urve
and
gen
erat
ing
reve
nues
from
cus
tom
ers
ales
.Ven
ture
cap
ital
ists
wil
lw
antt
osp
eak
wit
hex
isti
ngc
usto
mer
sas
par
toft
heir
due
di
lige
nce.
Gro
wth
Sta
ge t
hrou
gh M
atur
ity:
In
itia
l P
ublic
Off
erin
gT
hefi
rsts
ale
ofy
our
stoc
kas
ap
riva
tec
ompa
nyto
the
publ
icis
cal
led
anI
niti
alP
ubli
cO
ffer
ing
(IP
O).
An
IPO
rai
ses
cash
and
cre
ates
oth
erb
enefi
tsfo
rth
eco
mpa
ny.A
pub
lic
com
pany
can
alw
ays
issu
em
ore
stoc
k,
alth
ough
ther
eis
no
guar
ante
eth
ere
wil
lbe
buye
rs.I
fthe
re
are,
thos
esh
ares
wil
lrai
sem
ore
cash
.
Goi
ngp
ubli
cre
quir
esth
eco
mpa
nyto
str
ictl
yco
nfor
mto
ru
les
ofth
eSe
curi
ties
and
Exc
hang
eC
omm
issi
on(S
EC
),w
hich
ext
ensi
vefi
nanc
ialr
epor
ting
,the
cre
atio
nof
ab
oard
of
dir
ecto
rs,a
ndo
ther
reg
ulat
ions
.
We
cann
oto
ver-
emph
asiz
eth
atI
PO
sar
efe
wa
ndfa
rbe
twee
n.T
hat’s
why
we
don’
tinv
estm
uch
tim
eon
them
.If
y ou
wan
tmor
ei n
form
atio
no n
IP
Os,
use
t he
I nte
rnet
.
Man
age
cash
No
mat
ter
how
suc
cess
fuly
oua
rea
trai
sing
cap
ital
,so
oner
or
late
r,yo
urn
ewc
ompa
nyw
illb
eca
shs
trap
ped.
R
egar
dles
sof
you
rst
age
ofe
ntre
pren
euri
ald
evel
opm
ent,
beco
me
real
lys
mar
tabo
utm
anag
ing
cash
.Ifc
apit
alis
re
quir
ed,d
ono
tdel
ay.
• C
onsi
der
boo
tstr
app
ing
or
frie
nds
and
fa
mily
firs
t.•
Bui
ld a
rel
atio
nshi
p w
ith
loca
l ban
ks.
• M
icro
-len
der
s w
ill lo
an f
rom
$5,
00
0 t
o $5
0,0
00
.•
Be
pre
par
ed t
o p
rovi
de
exte
nsiv
e in
form
atio
n to
pro
ve c
red
it-w
orth
ines
s.•
Stay
ale
rt f
or f
eder
al o
r st
ate
tax
cred
its
or s
tim
ulus
ince
ntiv
es f
or s
tart
up o
r hi
gh
tech
nolo
gy
bus
ines
ses.
The
Entr
epre
neur
’s P
ath
523
TH
E C
ASH
53
Co
nC
LuSi
on
E
very
ent
repr
eneu
rev
entu
ally
wil
lnee
dto
rai
sec
apit
alto
fu
ndth
em
iles
tone
sth
atle
adto
sus
tain
able
rev
enue
.The
pr
oces
sst
arts
wit
hun
ders
tand
ing
thos
em
iles
tone
s,th
en
unde
rsta
ndin
gth
eap
prop
riat
eso
urce
sof
cap
ital
,and
then
m
atch
ing
upth
etw
oin
aw
ell-
form
edb
usin
ess
plan
.
Ify
ouh
ave
ada
yjo
b,k
eep
itu
ntil
you
are
cer
tain
you
ren
trep
rene
uria
lide
aca
nga
ine
noug
htr
acti
onto
bec
ome
cash
flow
pos
itiv
e.S
eek
oute
xper
ienc
edb
usin
ess
peop
le
and
entr
epre
neur
sfo
rad
vice
and
men
tori
ng.D
on’t
allo
w
opti
mis
ma
ndp
assi
onto
ove
rrid
epr
acti
cali
ty.
Car
veo
uts
ome
tim
e ev
ery
wee
k to
de-
com
pres
s.A
roc
k-su
rew
ayfo
ra
com
pany
tofa
ilis
toh
ave
the
foun
der
suff
era
he
arta
ttac
k.
kEy
Po
inTS
The
Ent
repr
eneu
rial
Lif
ecyc
leis
mea
sure
din
te
rms
ofth
eti
me
itta
kes
toa
chie
vea
cer
tain
le
velo
fpro
fitab
ilit
y.
Unt
ilth
eco
mpa
nyc
anr
aise
mon
eyth
roug
hre
venu
e,it
mus
tfind
oth
ers
ourc
eso
fcap
ital
.
Tom
ove
alon
gth
epa
tho
fdev
elop
ing
an
inve
stm
ent s
trat
egy,
you
hav
e to
und
erst
and
the
lang
uage
oft
hec
apit
alm
arke
ts.
One
oft
hem
ostc
omm
onm
isco
ncep
tion
sb y
en
trep
rene
urs
isth
atth
eym
ustr
aise
ag
reat
de
alo
fcap
ital
up
fron
tto
succ
eed.
Foc
usin
gon
the
corr
ectc
apit
als
ourc
ean
did
enti
fyin
gac
hiev
able
mil
esto
nes
can
sim
plif
yth
eca
pita
lrai
sing
pro
cess
.
55
“If
yo
u w
an
t to
b
e s
uccess
ful,
it’
s ju
st t
his
sim
ple
. K
no
w w
ha
t y
ou
are
do
ing.
Lo
ve w
ha
t y
ou
a
re d
oin
g. A
nd
b
eli
ev
e i
n w
ha
t y
ou
are
do
ing.”
– W
ill R
oger
s
The
Entr
epre
neur
’s P
ath
564
TH
E PL
AN
57
Inr
ecen
tyea
rs,“
expe
rts”
and
pun
dits
hav
eto
lde
ntre
pren
eurs
th
atth
eyd
on’t
need
ab
usin
ess
plan
.In
the
wor
dso
fthe
R
oost
er,F
ogho
rnL
egho
rn,“
That
’sa
joke
...I
say,
that
’sa
joke
,so
n.”
Ify
oup
lan
toa
sks
omeo
nee
lse
for
mon
ey–w
heth
erit
is
ag
rant
,alo
an,o
ran
inve
stm
ent–
you
have
toh
ave
aw
ell-
thou
ght-
out,
and
wel
l-w
ritte
nbu
sine
ssp
lan.
Cre
atin
ga
form
alb
usin
ess
plan
isn’
tas
daun
ting
as
itm
ay
soun
d.Y
ouw
illh
ave
alre
ady
draf
ted
man
yve
rsio
nso
fyou
rpl
an.Y
ouc
ans
tart
wit
hth
epr
elim
inar
ybu
sine
ssp
lan
that
w
asp
arto
fyou
rP
roof
-of-
Con
cept
sta
gea
sth
eba
sis
for
your
Se
edS
tage
pla
n.
Don
’t b
elie
ve it
whe
n so
meo
ne e
lse
tells
yo
u th
ey w
ill w
rite
you
r b
usin
ess
pla
n. It
ca
n’t
be
don
e. N
ot o
nly
will
you
rea
lly le
arn
your
bus
ines
s by
wri
ting
you
r p
lan,
you
will
ex
pre
ss y
our
idea
s an
d p
assi
on in
you
r ow
n vo
ice
and
wor
ds.
You
don
’t h
ave
to w
rite
it
all a
t on
ce. B
reak
it d
own
into
sec
tion
s an
d
wri
te o
n it
eve
ry d
ay. O
nce
you
have
a s
olid
d
raft
–and
thi
s w
ill w
riti
ng a
nd r
ewri
ting
, you
ca
n en
gag
e a
pro
fess
iona
l to
edit
for
you
. B
ut o
nly
you
can
wri
te y
our
pla
n.
Ent
repr
eneu
rso
ften
ask
us
for
exam
ples
ofa
bus
ines
spl
an.
We
tell
them
we’
llg
ive
sugg
esti
ons
and
guid
elin
esb
utn
ota
sa
mpl
epl
an.N
orw
illy
ouw
illfi
nda
nex
ampl
eof
ab
usin
ess
plan
inth
ish
andb
ook.
Bec
ause
the
mos
teff
ecti
veb
usin
ess
plan
sw
eha
ves
een–
and
we
have
rev
iew
edth
ousa
nds
of
them
–are
alw
ays
wri
tten
by
the
entr
epre
neur
.
An
effe
ctiv
ebu
sine
ssp
lan
wil
lfoc
uso
nth
ebu
sine
ss
oppo
rtun
ity
and
outl
ine
key
mil
esto
nes
tob
eac
hiev
ed.
The
bus
ines
spl
anis
the
all-
impo
rtan
tfirs
tim
pres
sion
for
rais
ing
mon
ey,f
orm
ing
part
ners
hips
,and
pro
mot
ing
your
co
mpa
ny.
The
bus
ines
spl
anr
eflec
tsa
llth
ein
dust
rys
peci
fic
info
rmat
ion,
dat
a,a
ndk
now
ledg
eyo
uha
vec
olle
cted
to
date
.Its
houl
dac
cura
tely
refl
ecty
our
inte
nt,r
atio
nale
,c o
nclu
sion
s,a
ssum
ptio
ns,a
nde
xpec
tati
ons
c onc
erni
ngy
our
busi
ness
ven
ture
for
the
next
five
yea
rs.
The
pla
nw
illb
eno
mor
eth
an1
0to
30
page
sin
clud
ing
finan
cial
s.W
e’ve
ref
erre
dto
the
entr
epre
neur
ialg
reat
Guy
K
awas
akip
revi
ousl
yin
this
boo
k,b
uta
gain
top
arap
hras
eh i
m,“
The
bus
ines
sp l
ani d
enti
fies
ap r
oble
mi n
t he
mar
ket
and
aso
luti
onto
that
pro
blem
.”
The
bus
ines
spl
anis
the
prod
uctu
pon
whi
chin
vest
ors
wil
lba
seth
eir
deci
sion
for
pres
enta
ndfu
ture
fund
ing.
Iti
sth
ero
adm
apth
atw
illg
uide
the
man
agem
entt
eam
for
the
near
fu
ture
, and
whi
chu
ltim
atel
y w
ill b
e th
e m
easu
reo
f the
bu
sine
sses
per
form
ance
.
Itw
illt
ake
som
ere
sear
cha
ndn
etw
orki
ngto
figu
reo
ut
whe
reto
sen
dyo
urp
lan.
Ift
here
are
ang
elg
roup
sin
you
rar
ea,t
hat’s
ag
ood
plac
eto
sta
rt.E
cono
mic
dev
elop
men
tor
gani
zati
ons
are
anot
her
sour
ceo
finf
orm
atio
n.S
oar
ese
rvic
epr
ovid
ers
such
as
atto
rney
san
dC
PAs.
The
sin
gle
best
way
toh
ave
apo
tent
ial i
nves
tor
read
you
r pl
anis
to
have
itr
efer
red
bys
omeo
neth
eyk
now
and
trus
t.
The
Entr
epre
neur
’s P
ath
584
TH
E PL
AN
59
Und
erst
and
your
aud
ienc
e.F
rien
dsa
ndfa
mil
ym
ayr
ead
or
list
enw
ith
ato
lera
nte
ar,b
uta
ngel
inve
stor
san
dve
ntur
eca
pita
list
sar
ein
unda
ted
wit
hpo
tent
iald
eals
.
Ang
el in
vest
ors
are
accu
stom
ed t
o m
akin
g
dec
isio
ns q
uick
ly. T
he o
ne t
hing
the
y d
on’t
hav
e en
oug
h of
is t
ime.
You
hav
e to
get
the
ir a
tten
tion
in t
he fi
rst
thre
e p
arag
rap
hs o
f th
e ex
ecut
ive
sum
mar
y, o
r no
mat
ter
how
fan
tast
ic y
our
solu
tion
is,
they
will
mov
e on
to
som
ethi
ng e
lse.
Whi
lea
bus
ines
spl
anis
und
enia
bly
alo
tofw
ork,
ith
as
bene
fits
beyo
ndth
em
oney
itr
aise
sor
com
mit
men
tsit
se
cure
s.W
riti
nga
bus
ines
spl
anc
reat
esth
eop
port
unit
yfo
ryo
urm
anag
emen
ttea
mto
wor
kto
geth
era
ndfo
rmal
ly
expr
ess
the
inte
ntio
nso
fthe
bus
ines
s.
By
the
tim
eyo
u’ve
ham
mer
edo
uta
nef
fect
ive
busi
ness
pl
ana
ndt
hes
ubse
quen
tbu
sine
ssp
rese
ntat
ion,
eve
ry
mem
ber
ofy
our
team
und
erst
ands
the
opp
ortu
niti
es,g
oals
,an
dri
sks
tot
hec
ompa
ny.T
here
is
nos
ingl
ebe
tter
way
to
ach
ieve
the
las
er-l
ike
focu
s th
aty
ouw
ill
need
to
mak
eyo
urv
entu
rea
suc
cess
.
ov
Erv
iEW
Wri
ting
ab
usin
ess
plan
isli
kec
atch
ing
afis
h.M
osto
fth
ew
ork
isin
the
prep
arat
ion.
In
rese
arch
ing
your
mar
ket
oppo
rtun
ity,
you
wil
lbe
lear
ning
info
rmat
ion–
abou
tthe
m
arke
t,th
eco
mpe
titi
on,a
nde
ven
pote
ntia
lcus
tom
ers
that
w
illa
ddd
epth
toy
our
busi
ness
pla
n.B
edi
scip
line
dab
out
coll
ecti
ng,p
rote
ctin
g,a
ndc
ateg
oriz
ing
wha
tyou
lear
n.
Whe
ni t
com
est i
me
t ow
rite
you
rb u
sine
ssp
lan,
you
’llh
ave
mor
ecr
edib
ilit
yif
you
talk
abo
utth
esi
zeo
fthe
mar
keta
nd
wha
tyou
kno
wa
bout
t he
p rob
lem
you
rc o
mpa
nyi s
set
ting
ou
t to
solv
e.
Fir
st f
ollo
w t
he b
asic
s:
Tar
get
the
corr
ecta
udie
nce.
Foc
uso
nth
eex
ecut
ive
sum
mar
y.A
void
tec
hnic
alja
rgon
.U
sec
hart
s,g
raph
ics,
hea
ding
s.K
eep
the
plan
eas
yto
rea
d.Try
top
repa
rea
15-
page
pla
n.D
on’t
exc
eed
30p
ages
.H
old
the
finan
cial
pro
ject
ions
totw
o to
thre
e pa
ges
and
k eep
t hem
cur
rent
,fac
tual
,and
rea
list
ic.
The
Entr
epre
neur
’s P
ath
604
TH
E PL
AN
61
Ant
icip
ate
and
answ
erth
equ
esti
ons
inve
stor
sw
antt
oas
k.Y
our
audi
ence
eva
luat
esb
usin
ess
plan
sal
lthe
tim
e.
The
ykn
owth
equ
esti
ons,
and
they
’ve
hear
dm
osto
fthe
an
swer
sbe
fore
.Res
pect
thei
rex
peri
ence
and
pre
sent
the
info
rmat
ion
they
wan
tand
nee
dto
mak
ea
deci
sion
abo
ut
whe
ther
or
nott
oin
vest
iny
our
com
pany
.
• W
hat
is t
he
pro
ble
m y
ou
so
lve?
• W
hat
is y
ou
r so
luti
on
?
• W
hat
is u
niq
ue
ab
ou
t yo
ur
co
mp
an
y t
hat
will
make
it
succe
ssfu
l?
• W
hat
do
yo
u k
no
w a
bo
ut
the
mark
et?
• W
hat
are
the c
om
pany’s
go
als
and
ho
w w
ill y
ou a
chie
ve t
hem
?
• W
hat
is t
he
co
mp
eti
tive
lan
dsc
ap
e?
• W
hat
are
th
e b
arr
iers
to
en
try?
• W
ho
is
man
ag
em
en
t?
• W
hy
sh
ou
ld s
om
eo
ne
in
ve
st i
n y
ou
an
d y
ou
r te
am
?
• H
ow
are
yo
u g
oin
g t
o m
ake
in
ve
sto
rs a
nd
yo
urs
elf
mo
ney?
• W
hat
are
yo
ur
ass
um
pti
on
s?
• H
ow
has
the
co
mp
an
y b
ee
n f
un
de
d t
o d
ate
?
• H
ow
mu
ch
mo
ney
do
yo
u n
ee
d?
• W
hat
is y
ou
r u
se o
f fu
nd
s?
Ify
oua
nsw
erth
ese
ques
tions
,you
now
hav
ea
busi
ness
pla
n.
The
rea
rem
any
busi
ness
pla
nto
ols
avai
labl
e.I
nves
tiga
te
them
.You
can
sav
eyo
urse
lfc
onsi
dera
ble
tim
eby
cho
osin
ga
tem
plat
eth
atr
elie
ves
you
ofm
osto
fthe
mec
hani
cso
fdo
cum
entp
repa
rati
on.T
here
are
als
oon
line
and
cla
ssro
om-
base
d se
min
ars
ond
evel
opin
g an
d w
riti
ngb
usin
ess
plan
s.
We
have
foun
dth
efo
llow
ing
flow
tob
ean
eff
ecti
ve
orga
niza
tion
ofa
wel
l-w
ritt
enb
usin
ess
plan
:
Exe
cuti
ve S
umm
ary
Ele
vato
r P
itch
Co
mp
any
Ove
rvie
w a
nd B
ackg
roun
d
Pro
ble
m /
So
luti
on
Pro
duc
ts a
nd T
echn
olo
gy
Mar
ket
Op
po
rtun
ity
Mar
keti
ng S
trat
egy
and
Exe
cuti
on
Man
agem
ent
Team
Fin
anci
als,
Use
of
Fun
ds,
Inve
stm
ent
Stra
teg
y
Ris
k A
sses
men
t
Let
’sp
roce
edw
ith
abr
iefo
verv
iew
ofe
ach
busi
ness
pla
nel
emen
t.
The
Entr
epre
neur
’s P
ath
624
TH
E PL
AN
63
EXEC
uTi
vE
SuM
Ma
ry
The
Exe
cuti
veS
umm
ary
isy
our
do-o
r-di
eop
port
unit
yto
gr
aba
pot
enti
alin
vest
or’s
att
enti
ona
ndc
onvi
nce
them
to
read
you
rbu
sine
ssp
lan.
Fol
low
ing
the
sam
efo
rmat
as
the
full
bus
ines
s pl
an, c
over
the
maj
orh
ighl
ight
s in
atw
o-to
th
ree-
page
det
acha
ble
docu
men
t.
Itis
not
ata
llu
nusu
alfo
rac
tive
ang
elg
roup
sor
ven
ture
ca
pita
list
sto
rec
eive
ab
usin
ess
plan
eve
ryo
ther
day
.Ify
ou
wan
tto
earn
ser
ious
con
side
rati
on,t
hes
tory
you
tell
iny
our
Exe
cuti
veS
umm
ary
mus
t be
com
pell
ing.
ThE
ELEv
aTo
r P
iTC
h, C
oM
Pan
y o
vEr
viE
W
an
d B
aC
kg
ro
un
dB
egin
you
rex
ecut
ive
sum
mar
yw
ith
your
“E
leva
tor
Pit
ch.”
T
hen
ame
com
esfr
omth
eid
eath
ata
gre
atE
leva
tor
Pit
ch
can
bed
eliv
ered
bet
wee
nth
eti
me
the
elev
ator
doo
rcl
oses
an
dth
epa
ssen
gers
rea
chth
ene
xtfl
oor.
Thi
sis
the
sam
eca
refu
lly
craf
ted
stat
emen
ttha
tyou
use
to
verb
ally
des
crib
e w
hat y
our
busi
ness
doe
s an
d ho
wy
oup
lan
tom
ake
mon
ey.I
ttak
esa
bout
am
inut
eto
say
.It’s
thre
eli
nes
long
on
the
page
. Reh
ears
e yo
ure
leva
tor
pitc
h un
til
you
know
itb
ette
rth
any
our
own
addr
ess.
Her
e ar
etw
oex
ampl
eso
fan
Ele
vato
rPitc
hfo
rthe
sam
eco
mpa
ny.
We
prod
uce
adi
spos
able
,infl
atab
les
leev
efo
rR
Ns
and
EM
Tsto
use
.Iti
sde
sign
edto
forc
ebl
ood
from
dee
per
tiss
ues
into
sup
erfic
ialv
eins
.
And
For
nur
ses
and
emer
genc
y pe
rson
nel t
hat c
an’t
find
ave
in
for
anI
V,w
eha
ved
evel
oped
ap
aten
ted,
dis
posa
ble
devi
ce
that
then
red
irec
tsb
lood
toe
ngor
geth
eve
in,m
akin
git
ea
sier
toin
sert
ac
athe
ter
and
mig
hts
ave
ali
fe.
Wou
ldth
efir
sts
tate
men
tgiv
eyo
uan
yid
eao
fwha
tthe
com
pany
do
es?
No.
Its
ound
slik
ein
dust
ryja
rgon
and
gob
bled
y-go
ok.
The
sec
ond
stat
emen
t, ho
wev
er, t
ells
inve
stor
s ex
actl
y w
hat
the
com
pany
iss
etti
ngo
utto
do.
The
sefe
wli
nes
mak
eyo
uw
antt
ore
ado
n.I
tisn
’tea
syto
cra
fte
xecu
tive
sum
mar
ies
like
thes
e,b
utif
you
can
’tde
scri
bey
our
busi
ness
to
stra
nger
s w
hod
on’t
unde
rsta
ndy
our
tech
nolo
gyin
ac
oupl
eof
sen
tenc
es,y
oua
ren
otr
eady
tor
aise
cap
ital
.
Inth
e co
mpa
nyo
verv
iew,
sta
teth
e si
gnifi
cant
mile
ston
esth
eco
mpa
nyh
asa
chie
ved
tod
ate.
Men
tion
stra
tegi
cpa
rtne
rshi
ps
orr
elat
ions
hips
.You
wan
tto
conv
eyth
efo
undi
ngte
am’s
dire
ctio
nan
dfo
resi
ghtt
hrou
ghc
iting
thes
eea
rly
resu
lts.
Rem
embe
r,yo
u’re
tryi
ngto
att
ract
oth
erp
eopl
e’s
mon
ey.
Your
sui
tand
hai
rsty
lea
ren
ote
noug
h.Y
oun
eed
tob
ecr
edib
lea
nds
tate
you
rac
com
plis
hmen
tsto
dat
eas
wel
las
wha
tyou
pla
nto
do
inth
eim
med
iate
futu
re.
The
Entr
epre
neur
’s P
ath
644
TH
E PL
AN
65
Pr
oB
LEM
an
d S
oLu
Tio
nT
hec
ente
rpie
ceo
fyou
rbu
sine
ssp
lan
isy
our
solu
tion
toa
bi
g,im
port
antp
robl
em(c
urre
nto
rem
ergi
ng)a
ndh
owth
at
solu
tion
wil
lgen
erat
ere
venu
ean
dpr
ofits
for
your
bus
ines
s.
The
big
gest
mis
take
that
ent
repr
eneu
rsm
ake
isfa
ilin
gto
inve
stth
eti
me
and
legw
ork
tou
nder
stan
dde
eply
the
mar
kets
they
are
tryi
ngto
ser
ve.Y
oum
ayh
ave
inve
nted
or
lice
nsed
the
cool
estt
echn
olog
yin
the
wor
ld,b
utu
nles
syo
um
atch
itto
ad
efine
dm
arke
tnee
d,te
chno
logy
isju
st
tech
nolo
gy.
Bef
ore
you
can
figu
reo
uta
suc
cess
pla
nan
dst
rate
gy
for
your
com
pany
, yo
u ha
vet
o un
ders
tand
wha
t yo
ur
solu
tion
can
do
for
the
mar
ket
plac
e.I
fyo
uar
ean
in
quis
itiv
een
trep
rene
urw
hoi
sw
illi
ngt
oas
kqu
esti
ons
and
then
be
disc
ipli
ned
abou
tor
gani
zing
and
rec
ordi
ng
wha
ty o
ul e
arn,
gai
ning
ins
ight
int
oy o
urp
oten
tial
cu
stom
ers
and
thei
rpr
oble
ms
isn’
tas
dif
ficu
lto
ras
ex
pens
ive
asy
oum
ight
thi
nk.
You
are
loo
king
for
tw
oki
nds
ofi
nfor
mat
ion–
quan
tita
tive
in
form
atio
nab
out
the
size
and
cha
ract
eris
tics
of
the
mar
ket
and
qual
itat
ive
info
rmat
ion
from
peo
ple
and
com
pani
esa
lrea
dyi
nth
ein
dust
ry,e
spec
iall
yif
the
ym
ight
ev
entu
ally
be
your
cus
tom
ers.
The
re’s
no
subs
titu
tef
orw
hat
ane
ntre
pren
eur
can
lear
nf r
omd
irec
tc o
nver
sati
ons
wit
hh u
man
bei
ngs.
Cal
ls o
me
cust
omer
syo
uth
ink
your
ide
aco
uld
help
.P
eopl
eli
ke
tot
alk
abou
tth
eir
prob
lem
s;y
oum
ight
be
surp
rise
d
wha
tyo
uw
ill
lear
n.C
all
expe
rts
int
hef
ield
.U
se
your
com
mun
ity
cont
acts
or
coll
ege
prof
esso
rs.
Trad
e,
prod
uct,
and
ind
ustr
yas
soci
atio
nsa
ree
xcel
lent
sou
rces
of
inf
orm
atio
n.
Whe
ther
you
are
am
embe
ror
not
,exe
cuti
ved
irec
tors
and
ot
her
asso
ciat
ion
lead
ers
wil
loft
enta
key
our
call
.Con
side
rat
tend
ing
maj
orin
dust
rys
how
sor
trad
eev
ents
.Gov
ernm
ent
depa
rtm
ents
,non
-pro
fite
cono
mic
age
ncie
s,a
nd
entr
epre
neur
cen
ters
oft
enh
ave
exte
nsiv
eon
line
arc
hive
sor
re
sour
celi
brar
ies.
Use
wha
tyou
lear
nto
exp
lain
how
you
rpr
oduc
tor
serv
ice
will
sol
vet h
ep r
oble
ms
t hat
t he
p eop
ley
oum
eta
ndt a
lked
t o
have
.Exp
lain
you
rva
lue
prop
ositi
on–w
hyc
usto
mer
sne
edy
our
prod
ucto
rse
rvic
ean
dw
hyth
eyw
illb
ew
illin
gto
pay
for
it.
Wha
tis
itab
outy
our
solu
tion
that
cre
ates
hig
hfu
ture
dem
and?
Not
hing
cat
ches
an
i nve
stor
’sa
tten
tion
mor
et h
ane
vide
nce
that
an
entr
epre
neur
has
list
ened
tom
any
cust
omer
sin
the
mar
kets
i nto
whi
chh
eo r
she
i nte
nds
t os
ell.
Pr
od
uC
TS a
nd
TEC
hn
oLo
gy
Cov
ero
nly
the
impo
rtan
tasp
ects
oft
hep
rodu
ct.T
his
is
nott
heti
me
tog
oov
erbo
ard
wri
ting
abo
uty
our
prod
ucto
rte
chno
logy
,as
inno
vati
vea
ndw
onde
rful
as
itm
ayb
e.
The
Entr
epre
neur
’s P
ath
664
TH
E PL
AN
67
Som
efo
rmo
fint
elle
ctua
lpro
pert
y(I
P)is
alm
osta
lway
sat
the
foun
datio
nof
any
sca
labl
ete
chno
logy
ent
repr
eneu
rial
ven
ture
.Pa
tent
sca
nad
dto
the
asse
tval
ueo
fthe
com
pany
,and
inve
stor
sw
antt
okn
owth
atIP
isa
ppro
pria
tely
pro
tect
ed,w
heth
er
thro
ugh
pate
nts
oro
ther
met
hods
.Dis
cuss
how
you
will
cre
ate
as u
stai
nabl
ec o
mpe
titiv
eb a
rrie
rin
a ddi
tion
t oa
nyI P
.
Em
phas
ize
any
uniq
uefe
atur
eso
rco
mpe
titiv
ead
vant
ages
an
dho
wth
ese
prod
uce
bene
fits
for
the
end
user
.Pot
entia
lin
vest
ors
know
that
for
apr
oduc
tor
serv
ice
tos
ucce
edin
the
mar
ketp
lace
,itm
ustb
ele
sse
xpen
sive
or
bette
rpe
rfor
min
gth
anth
eco
mpe
titio
n,o
rm
ustb
eab
leto
sol
vea
pro
blem
that
co
uldn
’tbe
sol
ved
befo
re.S
how
how
you
rcu
stom
ers
will
use
yo
urp
rodu
cta
ndw
hyth
eyw
ould
be
will
ing
top
ayfo
rit.
Incl
ude
clea
ran
dst
raig
htfo
rwar
ddi
agra
ms
toh
elp
the
read
er.
Test
the
effe
ctiv
enes
sof
you
rex
plan
atio
non
you
rno
n-te
chni
cal f
rien
ds.C
anth
eyr
ead
this
sec
tion
ofy
our
plan
and
un
ders
tand
wha
tyou
are
talk
ing
abou
t?I
fnot
,rew
rite
.
Ma
rk
ET o
PP
or
Tun
iTy
You
have
dem
onst
rate
dyo
urk
now
ledg
eof
the
mar
ket,
outl
ined
the
prob
lem
,and
em
phas
ized
you
rso
luti
on.N
owis
th
eti
me
tou
sey
our
crys
talb
allt
osp
ecul
ate
onth
elo
ng-
term
gro
wth
pro
spec
tso
fthe
mar
keta
ndy
our
com
pany
.
The
qua
ntit
ativ
ein
form
atio
nth
aty
ouc
olle
cted
hel
ps
qual
ify
the
mar
keta
ndd
evel
ops
ale
velo
fcon
fiden
cea
bout
th
em
arke
tabi
lity
oft
hep
rodu
ct.Y
our
asse
ssm
ento
fwho
w
illb
uyy
our
prod
uct,
how
man
yof
thos
ebu
yers
exi
st,a
nd
how
muc
hth
eyw
illp
aym
akes
up
the
Mar
ketO
ppor
tuni
ty
stat
emen
tin
your
bus
ines
spl
an.F
ocus
on
the
mar
kets
that
yo
uin
tend
tos
erve
.Inv
esto
rslo
okfo
ra
com
pany
that
kno
ws
how
ton
arro
wth
efo
cus
and
prio
riti
ze.
Cite
thir
d-pa
rty
rese
arch
–but
onl
yth
ose
stat
istic
sth
ata
re
rele
vant
toy
our
busi
ness
.You
will
be
usin
gda
tap
rim
arily
from
se
cond
ary
sour
ces
such
as
trad
ejo
urna
ls,p
erio
dica
ls,e
xist
ing
mar
kets
tudi
es,a
nde
lect
roni
cda
ta.M
ake
sure
itis
the
mos
tcu
rren
t ava
ilabl
e.K
eep
ana
ccur
ate
reco
rdo
f you
r so
urce
s.
Inte
rnet
sea
rch
e ngi
nes
c an
b eco
me
y our
bes
tfri
end
t ofi
nd
spec
ific
fact
sas
wel
las
mar
kett
rend
s.O
utlin
eth
esi
zea
nd
grow
thtr
ends
ofy
our
targ
etm
arke
t.If
you
hav
ein
tere
stfr
om
com
pani
eso
rcu
stom
ers,
now
isth
etim
eto
talk
abo
utit
.
All
bus
ines
ses
h ave
com
peti
tion
.Und
erst
and
y our
s–th
ose
who
are
alr
eady
sel
ling
toth
ein
dust
rya
ndth
ose
who
m
ight
ent
erth
em
arke
tin
the
futu
re.A
naly
zeth
eir
pric
ing
a nd
p rod
ucts
.Don
’tn e
glec
ttha
tnem
esis
ofm
any
n ew
co
mpa
nies
–the
iner
tia
ofth
est
atus
quo
.
Ma
rk
ETin
g S
Tra
TEg
y a
nd
EX
ECu
Tio
nT
heg
oali
sto
illu
stra
teh
owy
ouw
illa
ttac
kth
em
arke
tan
dpr
oduc
ere
venu
e.T
heo
pera
tion
als
trat
egie
sth
aty
ou
expr
ess
are
keys
toth
eex
ecut
ion
ofth
eov
eral
lbus
ines
sm
issi
on.
Iden
tify
ear
lym
arke
tnic
hes
or“
earl
yad
opte
rs,”
cus
tom
ers
who
are
inno
vati
veo
rw
hoa
rein
suc
hpa
inth
atth
eyw
ould
be
like
lyto
take
ar
isk
ony
our
solu
tion
soo
ner.
Mos
tcu
stom
ers
don’
tmov
efa
st,e
spec
iall
yw
hen
itc
omes
to
The
Entr
epre
neur
’s P
ath
684
TH
E PL
AN
69
adop
ting
an
ewte
chno
logy
or
proc
ess.
Ide
ntif
yan
dth
en
crea
tea
str
ateg
yto
get
toth
eea
syo
nes
first
.
Wha
tis
your
pri
cing
str
ateg
y?W
illc
usto
mer
sli
cens
eyo
ur
tech
nolo
gy?
Do
you
plan
tofo
llow
the
soft
war
eas
as
ervi
ce
(Saa
S)m
odel
and
cha
rge
byth
em
onth
or
byth
ecl
ick?
Wil
lyo
uha
vea
bas
eof
feri
ngw
ith
addi
tion
alfe
atur
esp
rice
dse
para
tely
or
tier
edp
rici
nga
imed
ats
peci
ficm
arke
ts?
How
do
you
rco
mpe
tito
rsp
rice
?
As
part
of
your
bus
ines
s pl
anp
roce
ss,
bep
repa
red
tom
ake
ani
nves
tmen
tin
bra
ndin
g.Y
our
bran
den
com
pass
esy
our
com
pany
nam
e,l
ogo,
tag
line
, W
eb
site
,an
dan
ym
arke
ting
col
late
rals
.
You
don’
tnee
dto
com
eup
wit
ha
logo
as
reco
gniz
able
as
the
Nik
e sw
oosh
, but
you
r lo
goa
ndc
ompa
nyn
ame
don
eed
tos
erve
you
for
thre
eto
five
yea
rs.T
hey
are
part
oft
he
qual
ity
imag
eyo
uw
antt
opr
ojec
t.
Be
prep
ared
tos
pend
som
eof
you
rca
refu
lly
cons
erve
dca
sh
onth
ese
item
s.T
his
isn
otth
e ti
me
toh
ire
your
cou
sin
to
save
afe
wd
olla
rsu
nles
syo
urc
ousi
nis
an
expe
rtin
des
ign.
Out
line
you
rm
arke
ting
,sal
es,a
ndp
rom
otio
nals
trat
egy.
A
rtic
ulat
eth
eco
mpa
ny’s
par
tner
ing
goal
s.A
ltho
ugh
your
co
mpa
nyis
you
ng,y
our
prod
ucti
sst
illu
nder
dev
elop
men
t,an
dyo
upr
obab
lyd
on’t
have
any
cus
tom
ers
yet,
ther
ear
eco
st-e
ffec
tive
way
sto
gai
nea
rly
reco
gnit
ion
inth
em
arke
tpla
ce.
Vol
unte
er t
o sp
eak
at y
our
loca
l Cha
mb
er o
r as
a
gue
st p
rese
nter
in c
olle
ge
or g
rad
uate
-lev
el
entr
epre
neur
ial c
lass
es. W
hen
you
see
an a
rtic
le
in a
loca
l pap
er, m
agaz
ine,
or
on a
web
sit
e th
at
is in
you
r fi
eld
, cal
l the
aut
hor,
and
vol
unte
er t
o co
ntri
but
e to
his
or
her
next
pie
ce a
bou
t yo
ur
ind
ustr
y. S
end
out
pre
ss r
elea
ses.
Incl
ude
cop
ies
of
anyt
hing
wri
tten
ab
out
you
or y
our
com
pan
y as
an
add
end
um t
o th
e m
arke
ting
sec
tion
of
your
pla
n.
Ify
oup
lan
tod
evel
opa
nin
-hou
ses
ales
forc
e,b
epr
epar
ed
toa
ddre
sstr
aini
nga
nda
fter
sal
ess
uppo
rt.I
fyou
rpl
anis
to
sell
thro
ugh
othe
ror
gani
zati
ons,
iden
tify
the
chan
nels
you
se
eka
spa
rtne
rs,y
our
plan
for
conv
inci
ngth
emto
par
tner
w
ith
you,
and
why
they
wou
ldw
antt
osa
yye
s.
Incl
ude
ach
arto
fkey
mil
esto
nes
for
the
next
six
to2
4m
onth
s.R
epea
t...in
clud
ea
char
t.
Ma
na
gEM
EnT
TEa
MIn
vest
ors
inve
stin
peo
ple
first
and
tech
nolo
gys
econ
d.
List
you
rte
am’s
dept
han
dex
peri
ence
tod
emon
stra
tey
our
wor
thin
ess
and
cred
ibili
ty.I
nclu
dea
par
agra
phfo
rea
chk
ey
exec
utiv
eth
atc
over
sal
lrel
evan
texp
erie
nce.
Inv
esto
rsw
antt
okn
owif
you
’ve
wor
ked
toge
ther
bef
ore
and
how
you
ope
rate
as
ate
am.E
mph
asiz
eal
lexp
erie
nce
inth
eta
rget
indu
stry
as
wel
la s
key
rel
atio
nshi
psw
ithp
oten
tialc
lient
so r
sup
plie
rs.
Ack
now
ledg
eth
eli
mit
atio
nso
fthe
foun
ding
sta
ffin
re
lati
onto
the
futu
rec
ompa
ny.I
fyou
are
ate
chni
cal
prof
essi
onal
wit
hout
muc
hop
erat
ing
expe
rien
ce,a
sm
any
foun
ding
ent
repr
eneu
rsa
re,a
ntic
ipat
eth
ene
edfo
rsk
ills
The
Entr
epre
neur
’s P
ath
704
TH
E PL
AN
71
that
you
don
’tha
ve.S
umm
ariz
eke
yhi
res
for
imm
edia
te,
inte
rmed
iate
,and
long
er-t
erm
tim
efr
ames
.Kee
pyo
ure
go
outo
fthe
dis
cuss
ion.
You
can
do
alo
t,bu
tinv
esto
rsk
now
th
aty
ouc
an’t
doe
very
thin
g.
fin
an
Cia
LS, u
SE o
f fu
nd
S, in
vES
TMEn
T ST
raTE
gy
T
hefi
nanc
ials
are
dri
ven
byth
em
arke
ting
str
ateg
yan
dm
iles
tone
s.C
lear
lys
tate
all
ass
umpt
ions
and
tie
them
ba
ckto
the
mil
esto
nes
ofth
em
arke
ting
pla
n.R
epre
sent
a
com
plet
ese
toffi
nanc
ials
intw
oto
thre
epa
ges
cove
ring
th
ree
tofi
vey
ears
,inc
ludi
nga
cur
rent
inco
me
stat
emen
t,ba
lanc
esh
eet,
and
cash
flow
sta
tem
ent.
Alw
ays
use
a“b
otto
mu
p”a
ppro
ach
base
don
you
rm
arke
tin
tell
igen
ce.N
ever
use
a“
top
dow
n”a
naly
sis.
..and
mos
tim
port
ant,
neve
r,ev
erte
llin
vest
ors
that
you
rco
mpa
nyo
nly
need
s“1
,2,o
rev
en5
per
cent
mar
kets
hare
”to
ach
ieve
yo
urr
even
ueg
oals
.
For
man
yen
trep
rene
urs
unde
rsta
ndin
gho
wto
con
stru
cta
nd
expl
ain
the
finan
cial
sis
cha
llen
ging
.Ify
oud
on’t
have
an
unde
rgra
duat
ede
gree
inb
usin
ess
ora
nM
BA
,get
som
ehe
lp
inth
isim
port
anta
rea.
The
foun
der
ofa
com
pany
can
not
expe
ctto
del
egat
eth
efin
anci
als
and
succ
eed.
Incl
ude
the
follo
win
g fin
anci
al inf
orm
atio
n in
you
r bu
sine
ss p
lan.
•A
sset
san
dli
abil
itie
s•
Sale
svo
lum
es•
Ope
rati
nge
xpen
ses
•N
etin
com
ean
dca
shfl
ow•
Gro
ssm
argi
n•
Rev
enue
gro
wth
Ify
oud
on’t
alre
ady
unde
rsta
ndw
hate
ach
ofth
ese
term
sm
eans
and
how
toc
alcu
late
it,fi
nda
tuto
r.W
itho
utth
is
unde
rsta
ndin
gyo
uca
n’tc
reat
ea
busi
ness
pla
n,b
utm
ore
impo
rtan
tly,
you
can
’tcr
eate
ac
ompa
ny.
Be
spec
ific
abou
tthe
fund
ing
you
wil
lnee
d.T
iec
apit
al
requ
irem
ents
tom
iles
tone
acc
ompl
ishm
ents
.Ify
oue
xpec
tto
nee
dm
ulti
ple
roun
dso
ffun
ding
,mak
eth
eam
ount
san
dti
min
gcl
ear.
Valu
atio
nof
you
rbu
sine
ssis
ac
orne
rsto
neo
fyo
urfi
nanc
ial p
roje
ctio
nsa
ndis
the
subj
ect o
f Cha
pter
7.
•D
etai
lso
finv
estm
ento
ppor
tuni
ty•
Fun
dss
ough
t•
For
mo
finv
estm
ent
•P
re/P
ostm
oney
val
uati
on•
Ow
ners
hip
Per
cent
age
•Su
bseq
uent
fund
ing
requ
ired
• U
seo
f fun
ds, E
xit S
trat
egie
s,a
ndR
etur
n on
Inv
estm
ent
The
Entr
epre
neur
’s P
ath
724
TH
E PL
AN
73
No
mat
ter
wha
tyou
rfin
anci
alp
roje
ctio
nsa
re,t
hey
wil
lbe
wro
ng.P
oten
tial
inve
stor
skn
owth
is.T
hey
wan
tto
see
ify
ou
reco
gniz
eth
eim
port
ance
ofm
anag
ing
cost
whi
led
rivi
ng
tow
ard
brea
k-ev
en.
un
dEr
STa
nd
ing
an
d E
XP
rES
Sin
g T
hE
riS
k in
yo
ur
Bu
Sin
ESS
PLa
nE
xper
ienc
edin
vest
ors
know
that
ther
eis
ris
kin
you
rbu
sine
ssp
lan.
The
yw
antt
okn
owth
aty
ouk
now
this
,too
.E
ntre
pren
eurs
are
by
natu
reo
ptim
isti
c,c
an-d
oty
pes.
Id
enti
fyth
eri
sky
area
sof
you
rpl
an,a
ndth
enh
ave
stra
tegi
esto
com
pens
ate
oro
verc
ome
that
ris
k.
The
foll
owin
gch
eckl
isti
sa
risk
ass
essm
entt
ool.
Fol
low
the
thou
ghtp
roce
ssp
rese
nted
inC
hapt
er2
toe
nsur
eth
ate
very
it
emb
elow
isc
lear
lyc
omm
unic
ated
and
add
ress
edin
you
rpl
ana
san
inte
gral
par
tofy
our
busi
ness
str
ateg
y.E
ach
of
thes
e li
nes
isa
que
stio
n th
aty
oum
ust b
e ab
leto
ans
wer
.
The
goa
l of t
his
exer
cise
isn’
t to
scar
e yo
u of
f. It
isto
hel
pyo
ucr
eate
as
ound
bus
ines
spl
anth
aty
oua
ndp
oten
tial
in
vest
ors
can
have
con
fiden
cein
…kn
owin
gth
ats
urpr
ises
an
dch
ange
sar
eli
kely
toh
appe
nev
ery
step
oft
hew
ay.
Thi
spr
oces
she
lps
you,
the
entr
epre
neur
,kee
pyo
ure
yeo
nth
eba
llo
fthe
cri
tica
lcor
pora
tec
hall
enge
tob
efa
ced
ina
ve
rytu
mul
tuou
sti
me.
Bu
Sin
ESS
Mo
dEL
riS
k•
Pri
mar
ybu
sine
ssr
isks
and
cre
dibl
est
rate
gies
for
addr
essi
ngth
ese
risk
s•
The
com
pany
’sv
alue
pro
posi
tion
•C
usto
mer
’sR
OI
•G
ross
pro
fito
fthe
com
pany
•
Str
ateg
ies
and
use
ofin
vest
men
tfun
ds•
Pat
ht o
bre
ake
ven
a nd
p rofi
tabi
lity
•
Hig
hlig
hts
and
subs
tant
iate
sth
e“c
ompe
titi
veb
arri
ers”
•
Bel
ow-m
arke
tcas
hc o
mpe
nsat
ion
t om
anag
emen
tpre
-pro
fit•
Mil
esto
nes
wil
l cha
nge
the
valu
e of
the
com
pany
whe
nac
hiev
edr
elat
ive
too
pera
tion
al
TEC
hn
oLo
gy/
Pr
od
uC
T r
iSk
•P
rodu
cts
tatu
s-c
once
ptua
l,w
orki
ngm
odel
,pro
toty
pe,
prod
ucti
onp
roto
type
•
Des
crip
tion
ofl
evel
ofc
ompl
exit
yof
the
prod
uct
•I
sth
epr
oduc
tevo
luti
onar
y,d
isru
ptiv
e,o
rre
volu
tion
ary?
•P
rodu
ctte
stin
gin
the
user
env
iron
men
t•
Doe
sth
epr
oduc
tint
egra
tein
the
curr
entm
arke
ten
viro
nmen
tor
does
itr
equi
rem
arke
tedu
cati
on,u
ser
educ
atio
n?•
Com
peti
tive
or
uniq
uefe
atur
eso
fthe
pro
duct
•C
ompe
titi
vete
chno
logi
calb
arri
ers,
suc
has
pat
ents
,lon
gde
velo
pmen
talc
ycle
s,o
rtr
adem
arks
•
Exp
ecte
dli
fec
ycle
oft
hep
rodu
ct
•M
ulti
ple
prod
ucts
or
line
sof
rev
enue
rel
ativ
eto
life
cyc
le•
Con
tinu
ing
rese
arch
and
dev
elop
men
t
The
Entr
epre
neur
’s P
ath
744
TH
E PL
AN
75
Ma
rk
ET r
iSk
•E
xpla
inth
ecu
rren
tmar
keta
ndh
owit
may
cha
nge
•M
arke
ttre
nds
•M
arke
tsiz
ean
dm
arke
tgro
wth
rate
sfo
reac
hpr
oduc
t/ser
vice
•P
oten
tial
ear
lya
dopt
ers
•L
ogic
alp
rior
itiz
atio
nof
pro
duct
/ser
vice
laun
ches
der
ived
fr
omth
eSa
les
orte
stin
gth
atin
clud
esu
ser
resp
onse
sas
t o
pri
ce,f
eatu
res,
and
sat
isfa
ctio
n•
Def
ensi
ble
pric
ing
stra
tegy
val
idat
edw
ithc
usto
mer
sur
veys
•C
usto
mer
dat
af r
oms
urve
yso
ri n
terv
iew
st h
ats
uppo
rts
thei
r pr
ojec
ted
sale
s vo
lum
esa
ndp
rice
poi
nts
• C
ompe
titi
vea
naly
sis
toin
clud
est
reng
ths/
wea
knes
ses
com
pari
son
char
t•
Mar
ketr
elat
ions
hips
dev
elop
ed•
Why
,how
,and
whe
reth
ecu
stom
erw
illp
urch
ase
•A
det
aile
dpl
anto
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Institutional Investor Due Diligence Items
1. Management, Officers, Directors & Employees • Key Management: resumes & references • Directors & Officers of the company: contact information • List all Employees: job title, base salary, options/equity • Current Organizational Chart
2. Capitalization/Securities
• Capitalization Structure: include a description of any rights attached to preferred shares
• List any Non‐Employee holders of any options or rights to purchase securities including warrants
3. Business Description • Business Plan • Executive Summary • Investor Presentation
4. Marketing & Sales
• Sales Plan • Marketing Plan • Company Marketing Materials and Brochures • Historical Sales Data • Customer Sales Pipeline for next 6 months • Sales Literature describing Product Features & Applications • Describe Sales Process
5. Customers
• Pricing Model and Current Price List • Provide Complete Customer List
‐ Detail on 10 biggest ‐ Detail on 10 medium ‐ Detail on 10 smallest
• Provide contact information for top 5 customers for product/service review
6. Target Market Sizing • Provide any Third Party data supporting # of customers in US eligible
to purchase Product/Service
7. Competition • Competitive Market Analysis
8. Operations • List of Top 10 Suppliers: include contact information • Organizational Chart for R&D • Development Calendar for next 12‐24 months
9. Information Technology
• List Proprietary Technology & Patent references • Technical Literature describing Product Design and Functionality • Key Information Technology (IT) Suppliers • List any Third Party Embedded Code • Provide Graphic Layout of Technology Platform
10. Financial Information
• Latest Financial Statements • Latest A/R Aging Schedule • Revenue/Sales Projections & Budget • Capital Expenditures Budget for next 12 months • Create a Win/Loss Report
11. Intellectual Property (Patent, Trademarks, Copyrights)
• Schedule of Patent Registrations/Applications identifying each patent by title, registration number, date of registration & status
• Schedule of Trademark Registrations/Applications identifying each mark by title, registration #, date of registration & status
• List any Licensing/Merchandising Agreements relating to Patents, Technology, Trade Secrets, Trademarks and Copyrights
12. Contract & Strategic Partnerships • List any Joint Venture or Strategic Partnership Agreements • List Legal & Accounting Firms: include contact information
Technology
1. Company, Product and Service Documents • Product Documents
User Manuals [including Installation Guides, etc.] Reference Manuals Architecture/implementation Product Design Documents Brochures, Product Fact Sheets White papers Industry Analyst Articles Corporate and technical management biographies Case studies / User Stories 2. Product Maintenance Information
• Problem Reports: Details by Customer, severity, resolution ‐ past 6 months Trend report – monthly problems by product version, severity ‐ preceding 1 year
• Product Release Documentation Release documents for previously shipped 2 product versions/releases Release planning documents [upcoming versions/releases] Post‐mortem documents on latest production release
3. Plans and schedules • Project plans & schedules for current development projects • Project plans & schedules for maintenance releases in progress
4. Customer reference information
• Customer technology testimonials, articles, papers, etc.
5. Process (Method) Documentation • Development process • Quality Assurance / Testing process • Configuration Management process • Change Management process • Information Development (Documentation) process • Packaging and/or Distribution process • Client Support process • Maintenance process • Project plans & schedules for maintenance releases in progress
Session 2 Tab
Bank2 is an independent bank committed to helping people build better lives. We are proud to be rated a 4-Star Bank by BauerFinancial, the most respected independent body rating financial institutions. Bank2 is a subsidiary of the Chickasaw Banc Holding Company. The Holding Company and thus Bank2 are 100% owned by the Chickasaw Nation. We have received state and national recognition through our efforts in Native America, and we are the #1 source of Native American home loans in the state of Oklahoma. As President of Bank2, Rod Whitson is primarily focused on growing the bank to the next level. During Rod’s tenure since late 2007, the bank has doubled its customer base, moved from a local Oklahoma City bank to a bank with customers nationwide and has quadrupled profits. Bank2 currently ranks in the top 5% nationally of banks its size as measured by return on equity and return on assets. Prior to Bank2 from 2000 to 2007, Rod served in a variety of executive positions and ultimately as president of Townsend Agency, a technology marketing agency, in San Diego. While at Townsend Agency, he served biotech clients including Merck Bioscience, Dow Pharma, Accelrys, Gen-Probe, Diversa, Agilent, Applied Molecular Evolution and a host of early stage pharma, device, diagnostics and instrumentation companies. Technology clients included Toshiba, QUALCOMM, Intel, BAE Systems and ARM and a number of early stage wireless, semiconductor and software companies. Before that from 1995 to 2000, he served in a variety of management positions and ultimately as vice president of marketing for Vistage in San Diego, a membership organization of company presidents and CEOs with 15,000 members worldwide. Rod worked with a number of leading Oklahoma financial institutions early in his career including Fidelity, Bank of Oklahoma, Oklahoma National Bank and First Interstate Bank. He is a graduate of Oklahoma State University, with both a bachelor’s degree in economics and an MBA in finance. He is a member of the OKBio Board of Directors and chair of their programming committee.
Rod Whitson 909 S. Meridian
Oklahoma City, OK 73108 www.bank2online.com
DermaMedics® is a biopharmaceutical company specializing in the development of novel, non‐steroidal dermatologics to address unmet needs for topical therapies that effectively treat a wide variety of inflammatory skin disorders and skin aging. DermaMedics’ topical therapies also prevent burns that arise from the use of medical treatments and cosmetic procedures. DermaMedics’ products all contain a novel bioactive chemical compound that is found in nature, and has remarkable anti‐inflammatory, anti‐aging and natural analgesic activity. Formulations containing this novel bioactive compound are as, or more, effective than topical prescription drugs on the market, but have none of the immunosuppressive side effects associated with prescription dermatologics. DermaMedics’ products are designed for the billion dollar dermatology and skin care market, and are sold exclusively to physicians, medical spas and cancer centers. DermaMedics’ therapeutic products have been clinically proven to prevent radiation burns in cancer patients, and to effectively treat psoriasis and rosacea. Its products have now been successfully introduced into the market place with accounts established with medical spas, plastic surgeons, dermatologists, family medicine clinics, and pediatrics offices in Texas, Oklahoma, Kansas, Missouri, Colorado, New Mexico, Wyoming, Arizona, Arkansas, and Georgia. The company markets 17 products under the DermaMedics Professional brand. These therapeutic products allow physicians to offer new and safer treatment options for acne, rosacea, infant and adult eczema, psoriasis, and hyperpigmentation and they also prevent burning caused by medical (radiation) and cosmetic (LASER resurfacing) procedures. A professor in the Department of Biochemistry and Molecular Biology at the University of Oklahoma Health Sciences Center (OUHSC) for more than two decades, Dr. Bryan Fuller discovered the Therosol “family” of naturally occurring anti‐inflammatory and anti‐aging compounds in his university laboratory. Already a serial entrepreneur with 2 previous biotech companies, Dr. Fuller retired as a full‐time professor at OUHSC in 2006. Dr. Fuller then built his own company, Therametics, to develop Therosol-based anti‐inflammatory products. Therametics was recently sold to DermaMedics, which is now marketing these products to medical professionals.
Dr. Bryan Fuller 655 Research Parkway, Suite 546
Oklahoma City, OK 73104 www.dermamedics.com
Company Background: Impact Technologies is a technology research and development company specifically targeting technologies and methods to solve problems in the energy and upstream oil & gas business. It is engaged in the design, patenting, prototyping and commercialization of over 20 new products and technologies mostly in advanced drilling systems and in gel sealing systems. Impact has the exclusive worldwide rights to 27 patents and patents‐pending, mostly by Mr. Oglesby. Showcased Technology: SPI Gels for CO2 Floods SPI gel is a patent pending, environmentally friendly silica‐based gel system that seals off inefficient reservoir zones, allowing more trapped oil to be recovered. The advantage that our enhanced oil recovery product offers for CO2 floods is the ability to activate the gel using the normally injected CO2, eliminating a major heavy metal (chrome) hazard and 50% of the cost associated with our competitors’ products which use chemical initiators. In addition, SPI gels are 3X stronger than competitors. Our company will conduct site selection, lab testing to determine the proper formulation of the SPI gels, and inject the treatment design into the operator’s wells using company‐provided assets. Operators using SPI gels in CO2 flood enhanced oil recovery projects can expect up to a 50% increase in daily oil production and $250,000 less in CO2 expenses, annually per treated well. With 7,000 CO2 flood injection wells currently in operation, the annual addressable market is $1.4B. Development Status: SPI has been developed over the last 6 years with project awards from OCAST (>$600K) and the Stripper Well Consortium (>$300K), with cost share provided by the founders. These funds allowed for prototyping the gels, testing them in the laboratory, and small scale field trials. Recently (2011), Impact received an additional $1.5MM grant from the Department of Energy to field test the gels on a larger, more commercial scale in three operating CO2 floods. Impact is currently forming strategic alliances with CO2 flood operators and chemical manufacturers and assembling the necessary field equipment to perform the field treatments. Michelle Witt, Director of Business Development – Ms. Michelle Witt has a B.S. in Mechanical Engineering, M.S. in Engineering Management from Rose‐Hulman Institute of Technology and a MBA from The University of Tulsa. Her experience in engineering, marketing and entrepreneurship has ranged from being CEO in a startup to roles in small businesses and fortune 500 companies. She has helped raise $4.5MM for product development with Impact.
Michelle Witt 5350 East 46th Street, Suite 131
Tulsa, Oklahoma 74135 www.impact2u.com [email protected]
The Alternative Board® brings together owners of privately held businesses to overcome challenges and seize new opportunities with a combination of peer advice and business coaching. Board members meet monthly to learn from one another's successes to grow their businesses. Each TAB board is comprised of a small number of local business owner members, who run non-competing businesses. These boards are formed by and facilitated by TAB certified facilitator-coaches. Each month, board members meet to share their business expertise, solve business challenges, and help each other seize new opportunities to achieve enhanced profit table growth and success. Tra Pippin is a results-oriented, Partner at Infinite Solutions Group, a turnaround management firm in the Oklahoma City area. He has extensive experience as a President and CEO, with emphasis in manufacturing and sales/marketing fields. Since forming a turnaround management firm in 1997, his expertise in mergers and acquisitions, venture capital, capital acquisition and capital management has resulted in over 20 companies raising over $400 million. He uses the skills of over two dozen premier consultants to provide financial, marketing, sales, human resource, management and strategic planning services for his nationwide base of clients. Prior to forming his consulting firm, Tra held President/CEO positions in several local companies. Companies that Tra led include Perfection Equipment Company, Jetta Corporation, Paxin Mortgage Company, National 60-Minute Tune and Lube, and Velocity Graphics, Inc. During Tra’s tenure at Perfection Equipment Company the company was recognized as operating one of the single most profitable companies in the truck parts and equipment industry. At Jetta Corporation his leadership resulted in the company going from an annual loss of over $1 million to a profit within 12 months. He has an undergraduate economics degree from Oklahoma University and juris doctorate and masters in business administration from Oklahoma City University. He is a member of the Turnaround Management Association, Oklahoma Bar Association, and many civic and charitable organizations.
Tra Pippin 3501 NW 63rd Street, Suite 102
Oklahoma City, OK 73116 www.tab-okc.com
Session 3 Tab
David manages the client enterprise services function for both the Oklahoma City and Tulsa office. Typical client enterprise services include technology, market and competitor assessments via a third party, refinement of business & financial models, review and critique of strategically focused Business Plans, guidance in the creation of investor oriented presentations, referrals to various key technology oriented service providers, and introduction to various capital sources, such as governmental funding programs, angel investor, and venture capitalist. All the client services are designed to support the movement of innovative technologies throughout the entire commercialization process regardless of the initial starting point. Client companies span the entire range from start-ups to on-going corporate entities expanding into new markets and/or developing new incremental technologies. David brings a breadth of business experience, ranging from start-up organizations to a Fortune 500 company, and industry knowledge. Specifically, David has directed a corporate venture firm, managed the treasury, financial reporting, strategic planning, & information/telecom services for a large electric utility, and led the financial and/or M&A function for several high growth companies. In addition, he has served on the Board of Directors of several high growth companies during which time one grew from approximately $35 million to over $100 million in revenues in two years. In-depth industry expertise includes energy, software, informational services, and financial. David earned a B.S. in Industrial Engineering & Management from Oklahoma State University, where he was honored as a Top Ten Senior, and a Master of Business Administration from Harvard University. David Thomison Vice President of Investments [email protected] www.i2E.org
Making Sense
David Thomison Vice President Investments
Making Sense of the NumbersIntegrated Financial Statements
This presentation is © 2011
What percentage of income contributes to cash?
ff
Questions?
Are your staffing plans compatible with available cash?
How much capital is required and when?
What is the cash consequences of missing various financial assumptions?
The Capital Lifecycle
Proof of concept
Pre-Seed Seed &Start-up
Early First, Second, etc...p Start-up
PR
OF
IT
Government Sources
Friends & Family
Angel Investors IPO, Banks
Self
Venture Capital
Seed Funds
TIME
VALLEY OF DEATH
Seed Funds
Without Integrated Financials
Its Virtually Impossible…
START-UP FACTS OF LIFE
• to navigate across the Valley of Death
• to raise capital from Investors
• to quickly know cash consequences
from changing assumptions
Income Statement (Profitability)
• Revenue – Expense = Profits
Integrated Financial Statements
Balance Sheet (Stability)
• Assets = Liabilities + Equity
Statement of Cash Flows (Liquidity)
• Beginning Cash + So rces Uses Ending Cash• Beginning Cash + Sources – Uses = Ending Cash
• Driven entirely by IS and BS
10. Inadequate staffing levels
9. Using top down revenue forecasting
8. Underestimating sales cycle
Common Mistakes
7. Underestimating operating costs
6. Static assumptions as business scales
5. Underestimating Working Capital needs
4. Underestimating time to secure financing
3. Financials do not reflect business plan
2. For LLCs, no allowance for tax distributions
1. Balance Sheet does not balance!
Minimum 3 years, 5 years ideally
Monthly for 1st year (Valley of Death!)
Recommended Format
Valid assumptions critical
Executive Summary and Investor Presentatio
• Summarized Income Statement only
Business Plan (2 pages maximum)
• Detailed Income Statement
• Detailed Balance Sheet
• Detailed Statement of Cash Flows
Income Statement Assumptions
Staffing Plan AssumptionsStaffing Plan Annual Comp Year 1 Year 2 Year 3 Year 4 Year 5
President $90,000 0.5 1 1 1 1
VP Sales & Marketing $70,000 1 1 1 1 1
Shipping/Inventory Control (1:25,000 Units) $24,000 1 4 12 18 24
Sales Professionals $50,000 - 2 4 6 10
CFO/Controller $75,000 - 1 1 1 1
Accountant $40,000 - 1 1 1 1
VP Engineering & Operations $70,000 - 1 1 1 1
IT Manager $60,000 - - 1 1 1
HR Manager $60,000 - - 1 1 1
Total # Employees 3 11 20 28 38
Employee Taxes & Benefits 28%
Annual Cost of Living Adjustments 3%
Operating Expense AssumptionsSales & Marketing Expenses Year 1 Year 2 Year 3 Year 4 Year 5
# Trade Shows/Year - 3 4 4 4 Cost/Trade Show $5,000 Marketing Materials $12,000 $50,000 $150,000 $200,000 $500,000 Advertising Exp. (% Sales) 3.0%
$Travel Expense/Trade Show $2,500Monthly Travel Expense/Sales Professional $1,500Sales Commission 5%
Development ExpensesProduct Development & Testing $180,000 $100,000 $50,000 $60,000 $50,000Regulatory Requirements $80,000 $12,000 $12,000 $24,000 $24,000 Web Development & Hosting $6,000 $18,000 $36,000 $36,000 $48,000
General & Administrative ExpensesTravel Expense/Executive/Year $2,000
$Telephone-Base 800 Service $1,800 Telephone-Variable 1.0%Warehouse Rent/Year $12,000 $12,000 $72,000 $72,000 $72,000Office Rent/Employee $1,440Insurance-General (% Rev.) 1.0%
Insurance-Product Liability (% Rev.) 5.0%
Outside Accounting $6,000 $12,000 $24,000 $24,000 $24,000
Outside Legal $12,000 $25,000 $50,000 $50,000 $50,000
Income StatementProforma Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5Revenues:Revenue $250,000 $2,700,000 $8,700,000 $13,500,000 $18,000,000Freight/Shipping Revenue $20,000 $200,000 $600,000 $900,000 $1,200,000Total Revenues $270,000 $2,900,000 $9,300,000 $14,400,000 $19,200,000
Cost of Good Sold $60,000 $550,000 $1,500,000 $2,137,500 $2,700,000Freight/Shipping Expenses $10 000 $100 000 $300 000 $450 000 $600 000Freight/Shipping Expenses $10,000 $100,000 $300,000 $450,000 $600,000
Gross Profit $200,000 $2,250,000 $7,500,000 $11,812,500 $15,900,000Gross Profit Margin 74% 78% 81% 82% 83%
Operating Expenses:Salaries $139,000 $557,230 $1,011,038 $1,307,994 $1,734,409Employee Taxes & Benefits $38,920 $156,024 $283,091 $366,238 $485,635Sales Commissions $12,500 $135,000 $435,000 $675,000 $900,000Marketing Expenses $12,000 $65,000 $170,000 $220,000 $520,000Advertising Expenses $7,500 $81,000 $261,000 $405,000 $540,000Product Development & Testing $180,000 $100,000 $50,000 $60,000 $50,000Regulatory Expenses $80,000 $12,000 $12,000 $24,000 $24,000Internet/Website Expenses $6 000 $18 000 $36 000 $36 000 $48 000Internet/Website Expenses $6,000 $18,000 $36,000 $36,000 $48,000Travel Expenses $3,000 $47,500 $86,000 $122,000 $194,000Telephone Expenses $4,300 $28,800 $88,800 $136,800 $181,800Rent Expense $15,600 $27,840 $100,800 $112,320 $126,720Insurance Expenses $15,000 $162,000 $522,000 $810,000 $1,080,000Accounting $6,000 $12,000 $24,000 $24,000 $24,000Legal $12,000 $25,000 $50,000 $50,000 $50,000Total Operating Expenses $531,820 $1,427,394 $3,129,728 $4,349,353 $5,958,564
EBITDA ($331,820) $822,606 $4,370,272 $7,463,147 $9,941,436 Operating Profit Margin -123% 28% 47% 52% 52%
Balance Sheet AssumptionsBalance Sheet Assumptions: Beg Year 1 Year 2 Year 3 Year 4 Year 5
Balances at Time/Year 0Cash $17,000 Accounts Receivables $0 Inventory $0
$Leasehold Improvements $0 Office Furniture & Computers $1,500 Accumulated Depreciation $0
Account Payable $0 Bank Credit Line $0 Long-term Debt $0 Equity $20,000 Retained Earnings ($1,500)Tax Distribution $0
Average # Days in Accounts Receivable 30Average # Days in Inventory-Finished 90Average # Days in Accounts Payable 30Capital Expenditures:Leasehold Improvements $0 $0 $0 $0 $0Equipment $5,000 $10,000 $15,000 $20,000 $25,000
Bank Credit Line:Advance Ratio for Accts. Rec. 0%Advance Ratio for Inventory-Finished 0%
Equity Capital Raised $400,000 $0 $0 $0 $0
Incremental Member Tax Rate 45%
Balance SheetProforma Balance Sheet
Beg. Year 1 Year 2 Year 3 Year 4 Year 5Cash $17,000 $47,680 $189,280 $1,886,263 $5,439,744 $10,388,784 Accounts Receivables $0 $22,500 $241,667 $775,000 $1,200,000 $1,600,000 Inventory $0 $15,000 $137,500 $375,000 $534,375 $675,000 T t l C t A t $17 000 $85 180 $568 446 $3 036 263 $7 174 119 $12 663 784Total Current Assets $17,000 $85,180 $568,446 $3,036,263 $7,174,119 $12,663,784
Leasehold Improvements $0 $0 $0 $0 $0 $0 Office Furniture & Computers $1,500 $6,500 $16,500 $31,500 $51,500 $76,500 Accumulated Depreciation $0 $0 $0 $0 $0 $0
Net PP&E $1,500 $6,500 $16,500 $31,500 $51,500 $76,500
Total Assets $18,500 $91,680 $584,946 $3,067,763 $7,225,619 $12,740,284
Account Payable $0 $5,000 $45,833 $125,000 $178,125 $225,000 Bank Credit Line $0 $0 $0 $0 $0 $0 Total Current Liabilities $0 $5,000 $45,833 $125,000 $178,125 $225,000
Long-term Debt $0 $0 $0 $0 $0 $0 Total Liabilities $0 $5,000 $45,833 $125,000 $178,125 $225,000
Equity $20,000 $420,000 $420,000 $420,000 $420,000 $420,000 Retained Earnings -$1,500 ($333,320) $489,286 $4,859,557 $12,322,705 $22,264,141 Tax Distribution $0 $0 ($370,173) ($2,336,795) ($5,695,211) ($10,168,858)Total Equity $18,500 $86,680 $539,113 $2,942,763 $7,047,494 $12,515,284
Total Liabilities & Equity $18,500 $91,680 $584,946 $3,067,763 $7,225,619 $12,740,284
Balance $0 $0 $0 $0 $0 $0
Statement of Cash FlowsProforma Cash Flow Statement
Cash Flow From Operations Year 1 Year 2 Year 3 Year 4 Year 5Net Income ($331,820) $822,606 $4,370,272 $7,463,147 $9,941,436 Plus: Depreciation $0 $0 $0 $0 $0 Operating Cash Flow ($331,820) $822,606 $4,370,272 $7,463,147 $9,941,436
Working Capital Requirements:Change in Accounts Receivables ($22,500) ($219,167) ($533,333) ($425,000) ($400,000)Change in Inventory ($15,000) ($122,500) ($237,500) ($159,375) ($140,625)Change in Accounts Payable $5,000 $40,833 $79,167 $53,125 $46,875 Change in Bank Credit Line $0 $0 $0 $0 $0 Subtotal Working Capital Requirements ($32,500) ($300,833) ($691,667) ($531,250) ($493,750)
Cash Flow From InvestingInvestment Capital Requirements:Change in Leasehold Improvements $0 $0 $0 $0 $0 Change in Furniture & Equipment ($5,000) ($10,000) ($15,000) ($20,000) ($25,000)Subtotal Investment Capital Requirements ($5,000) ($10,000) ($15,000) ($20,000) ($25,000)
Cash Flow From FinancingFunding Sources:Change in Long-term Debt (Mortgage) $0 $0 $0 $0 $0 Change in Equity $400,000 $0 $0 $0 $0 Tax Distribution-Members $0 ($370,173) ($1,966,622) ($3,358,416) ($4,473,646)Subtotal Funding Sources $400,000 ($370,173) ($1,966,622) ($3,358,416) ($4,473,646)
Total Cash Flow $30,680 $141,600 $1,696,983 $3,553,481 $4,949,040
Beginning Cash $17,000 $47,680 $189,280 $1,886,263 $5,439,744 Ending Cash $47,680 $189,280 $1,886,263 $5,439,744 $10,388,784
Financial Statement Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue/Salesperson N/A $1 350 000 $2 175 000 $2 250 000 $1 800 000
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue/Salesperson N/A $1,350,000 $2,175,000 $2,250,000 $1,800,000
Revenue/Employee $108 000 $263 636 $465 000 $514 286 $505 263Revenue/Salesperson N/A $1,350,000 $2,175,000 $2,250,000 $1,800,000
Revenue/Employee $108,000 $263,636 $465,000 $514,286 $505,263
Customers/Employee
Revenue/Customer
Marketing & Sales/Total Operating Exp. 24.0% 36.6% 40.5% 42.6% 47.5%
Non‐Payroll Expenses/Total Oper. Exp. 64.3% 40.6% 44.8% 46.0% 47.6%
Payroll Expenses/Total Oper. Exp. 35.7% 59.4% 55.2% 54.0% 52.4%
Product Development/Total Oper. Exp. 33.8% 7.0% 1.6% 1.4% 0.8%
Operating Exp. Cash Coverage (mths) 1.1 1.5 7.2 15.0 20.9
Cash Runway (mths) 1.7 N/A N/A N/A N/A
(Total Operating Exp. ‐ Gross Profit)
Cash Runway @ 50% Scenario (mths) 1.3 7.2 N/A N/A N/A
(Total Operating Exp. ‐ Gross Profit @ 50%)
Revenue/Employee $108,000 $263,636 $465,000 $514,286 $505,263
Customers/Employee
Revenue/Customer
Marketing & Sales/Total Operating Exp. 24.0% 36.6% 40.5% 42.6% 47.5%
Non‐Payroll Expenses/Total Oper. Exp. 64.3% 40.6% 44.8% 46.0% 47.6%
Payroll Expenses/Total Oper. Exp. 35.7% 59.4% 55.2% 54.0% 52.4%
Product Development/Total Oper. Exp. 33.8% 7.0% 1.6% 1.4% 0.8%
Operating Exp. Cash Coverage (mths) 1.1 1.5 7.2 15.0 20.9
Cash Runway (mths) 1.7 N/A N/A N/A N/A
(Total Operating Exp. ‐ Gross Profit)
Cash Runway @ 50% Scenario (mths) 1.3 7.2 N/A N/A N/A
(Total Operating Exp. ‐ Gross Profit @ 50%)
Yrs-Exit Typical Stage ROI Target X
6 Seed 66% 21.0
Investor:Expected Rates of Return
5 Start-up 60% 10.5
4 First Stage 53% 5.5
3 Second Stage 47% 3.2
2 Mezzanine 41% 2.0
“Business Angels”, Robert Keeley
Sample ValuationYear 1 Year 2 Year 3 Year 4 Year 5
Revenues $270,000 $2,900,000 $9,300,000 $14,400,000 $19,200,000 COGS $70,000 $650,000 $1,800,000 $2,587,500 $3,300,000 Gross Profit $200,000 $2,250,000 $7,500,000 $11,812,500 $15,900,000 Gross Profit % 74% 78% 81% 82% 83%Development $266,000 $130,000 $98,000 $120,000 $122,000 $ , $ , $ , $ , $ ,Sales & Marketing $32,000 $281,000 $866,000 $1,300,000 $1,960,000 General & Administrative $233,820 $1,016,394 $2,165,728 $2,929,353 $3,876,564 EBITDA ($331,820) $822,606 $4,370,272 $7,463,147 $9,941,436 AOperating Profit % -123% 28% 47% 52% 52%
Investor Adjustment to EBITDA 50% BAdjusted EBITDA $4,970,718 C = A X B
Exit EBITDA Multiple 7 DExpected Exit Value $34,795,027 E = C X Dp
Investment $400,000 FRequired Return Multiple 21 G
Expected Value at Exit $8,400,000 H = F X G
Ownership % 24% I = H / E Business PlanValuation
Post Money Valuation $1,656,906 J = F / I $1,600,000 Pre Money Valuation $1,256,906 K = J - F $1,200,000
Angel Capital Investment Criteria Kaufman Foundation - $1 to $3 million Tech Coast Angels – Below $5 million St L i A h A l B l $3 illi
Market Investment Comparables
St. Louis Arch Angels – Below $3 million
Venture Source & Venture One Deals
Private Capital Market Statistics
Attend Venture Capital Forums Concentration Fundable Deals
TALK to Venture Capitalists Discuss General Market Deal Pricing
Ultimately a NEGOTIATED Value by a
‘Willing Buyer & Seller’
“Science versus Art”
Willing Buyer & Seller
Number of Interested Investors
Technology Space
Company Liquidity
Questions?David Thomison
dthomison@i2E [email protected]
Session 4 Tab
As Concept Investments Manager for i2E, Kenneth Knoll oversees all investment aspects of i2E’s proof of concept funding programs, including the Oklahoma Concept Fund and the Manufacturing Innovation Fund.
A graduate of the University of Tulsa with degrees in Finance, International Business and Spanish, Kenneth brings to i2E business perspective gained from enterprises both large and small.
Most recently, Kenneth served an internal auditor with ConocoPhillips, one of the world’s largest oil and gas companies. As an entrepreneur, he founded a Tulsa-based company while in high school and operated it for more than a decade.
As a student at TU, Kenneth also was team leader in 2007 of Molecuprint, LLC, which won first place in the undergraduate division of the Governor’s Cup Business plan competition. While a TU student, he also studied abroad in Alicante, Spain, and served as a TU delegate to INNOVATE 2007, a two-week conference in Shanghai, China and Bangalore, India, that focused on international business.
Certified in Product Innovation & Development, Kenneth combines start-up experience with a systematic development approach inherent to larger corporations.
Kenneth served an internship with i2E in 2008. He and his wife, Andrea, recently relocated to Oklahoma City from Tulsa.
Kenneth Knoll Concept Investments Manager [email protected] www.i2E.org
Kenneth KnollConcepts Investment Manager
READY, SET, PITCH!Presenting your idea to the Investor.
This presentation is © 2009This presentation is © 2011
The Goal
• Learn How to Convey Your Opportunity to the InvestorOpportunity to the Investor
• Guide to the Oral Presentation for the Governor’s Cup Competition
Your Tools
• The Business PlanHour– Hour
• The Presentation– 20 Minutes
• Executive Summary– 5 Minutes5 Minutes
• The Elevator Pitch– 30 Seconds
Reverse The Order
• The Elevator Pitch
• Executive Summary
• The Presentation
• The Business Plan
The 30 Second PitchYou just happen to get in the
elevator with a well known investorinvestor.
You have 30 seconds on the ride to state your idea.
Hopefully as the Investor steps outHopefully, as the Investor steps out of the elevator, you hear, “Interesting, send me your Executive Summary.”
First SentenceFor ___(customers)___ with the problem of
___(problem)____ , we have ___(your idea)_ that can (big benefit)that can ___(big benefit)__ .
“For transportation companies whosepersonnel must interpret numerous, oftenconflicting hazmat rules and regulations, weh d l d ft th t id thhave developed software that provides thecorrect interpretation, eliminates humanerror and reduces the time to prepare ahazmat shipment.”
Second SentenceIt’s based on __(technology)___ that has
the advantage of _(advantage)_ that will allow us to (define marketallow us to ___(define market success)___ and generate __(5th year sales figure)__ in sales.
“It’s an online system based on proprietary, comprehensive software algorithms that allow us to control critical inputs for the hazmat transportation market and generate $50mm per year in sales.”
Last SentenceWe have accomplished __(milestone or
two)___ and now we are looking for (raise) so that we can (milestones___(raise)___ so that we can __(milestones
from plan)__ .
“We have three years developing thesoftware and prototyped our first units.We are now seeking $250,000 toWe are now seeking $250,000 tofurther develop the software, and begindemonstrating the product to potentialcustomers, partners and investors."
The Presentation
• 20 Minute Opportunity to Present Y IdYour Idea
• Pre-scheduled, with Q & A
Assumptions
• The Business Plan is Complete
• Pitch is to an Investor
• Investor may not have read BP
• There is a Q&A at the endThere is a Q&A at the end
Ground Rules
• Remember, it’s a PITCH!
• High Points from Business Plan
• Be Enthusiastic, Be Interesting
• Describe Your OPPORTUNITY!Describe Your OPPORTUNITY!
Ground Rules
• One Minute per Slide
• Four Bullet Points per Slide
• Four Words per Bullet Point
• Less is More – Keep focus on YOUp
For Each Slide:
• What is the Point?
• Why should THEY care?
• Use $$’s, not ##’s
Outline - Your Idea
1. Title Slide
2. Problem
3. Your Solution
4. Business Model
Outline - Outside World
5. Market
6. Competition
7. Sales Approach
Outline - Execution
8. Management
9. Operations
10.Development Milestones
Outline - ROI
11. Financial Projections
12. Funding Issues
13. Exit Strategy
Outline - Evaluation
14. Status
15. Risk Assessment
16. Conclusion
Title Slide• Who are you?
• What do you do?y
• Why are you here?
• Say Your 30 Second Pitch
C t t I f ti• Contact Information
Problem Slide
• Clearly show the Problem
• Give Examples
• Make it REAL to the Investor
• What is the Pain in $$’s?What is the Pain in $$ s?
Your Solution Slide
• ONE Compelling Solution
• Show Value ($) to ONE Customer
• Be Brief on Technology
• State your Intellectual Property• State your Intellectual Property
Business Model Slide
• How Do You Make Money?
• What Do You Sell? To Whom?
• Where Does It Come From?
• Give Price/Cost/Frequency/Volume ($’s)• Give Price/Cost/Frequency/Volume ($ s)
Market Demand Slide
• Who is your Market?
• How Big is your Market? ($’s)
• Growth Rate?
• Major Trends• Major Trends
Competition Slide
• List Major Competitors
N d Si– Name and Size
• Group Minor Competitors
• Charts Comparing Features Are Good
– Complete, Honest
Sales Approach Slide
• What are the Market Segments?• Which Segment Values You the Most?Which Segment Values You the Most?• How do you reach them?
• Acquisition Costs?
• Sales Cycle
• Bottom’s Up Sales Forecast
Sales Forecast Slide – Top Down
• Top Down- 1% of Market
• 1% of $1 Billion = $10 million
• Good for Setting Realistic Expectations
• Doesn’t Say How You Get There
Sales Forecast Slide – Bottom Up
• Independent of Market Size• Begins with estimatesg
• Five sales calls/week• 10% close rate• $50,000 /sale• Calculates to $1,200,000 / salesperson
M d l b ifi d/ dj t d• Model can be verified/adjusted
Management Team Slide
• List Major Team Members
• Include Only Relevant Information
• Major Open Positions and Prospects
• Why YOU and Your Team?• Why YOU and Your Team?
Operations Slide
• How will you run the company?
• What do you do in-house?
• What do you outsource?
• How do you Leverage Capital?• How do you Leverage Capital?
Development Milestones Slide
• 4 to 7 Significant Milestones
– Table or Chart with Dates
• Layout of Operational Plan
– Product Status
– SalesSales
– Funding Rounds
– Break-Even
Sample Milestone Chart
2007 2008 2009Description Quarters 1 2 3 4 1 2 3 4 1 2 3 4Intellectual Property Protection
Production of Prototypes V1 &V2 V3 & V4
Prototype Testing V1 & V2 V3 & V4
$500 K Seed Round
Production ManufacturingProduction Manufacturing
Marketing and Sales
Positive Cash Flow
Financial Projections – 5 Years
Year 1 Year 2 Year 3 Year 4 Year 5
REVENUE $36 000 $2 274 000 $7 224 000 $11 400 000 $15 720 000REVENUE $36,000 $2,274,000 $7,224,000 $11,400,000 $15,720,000
TOTAL COST $8,820 $1,047,630 $3,347,880 $5,118,000 $6,941,400
GROSS PROFIT
$27,180 $1,226,370 $3,876,120 $6,282,000 $8,778,600
OPERATIONS $71,000 $294,700 $761,000 $1,649,950 $2,075,600
NET PROFIT ($43,820) $931,670 $3,115,120 $4,632,050 $6,703,000
Funding Slide
• Offering XX Equity Shares for $YYY,000
• Use of Funds• Use of Funds
– 3 to 6 Lines – Big Picture
– Should Match Development Milestones/Time
– Details in Business Plan
Additional Funding Required Later?• Additional Funding Required Later?
Exit Strategy Slide
• What is Your Strategy?– Initial Public Offering
Acquisition– Acquisition
• Comparisons in Industry?– Names of Companies with their Multiples
• Name Acquirers and Give Reasons
• Show Investor the ROI• Show Investor the ROI
Status Slide
• What have you accomplished?– Developmentp
– Sales
– License Agreements
– Intellectual Property
• How much have you spent?y p
Risk Assessment Slide
• What are Your Unique Risks?
– Competition, Adoption Rate, Key Customers?
• What are the Mitigation Strategies?
• Demonstrate Critical Thinking Ability
Conclusion Slide
• List the Most Important Highlights
• Emphasize Potential of Opportunity
• Thank Them for Their Patience
• Q & A?• Q & A?
Preparing for the Pitch
• Prevent Technology Glitches
– Check for Computer/Software Capabilities
– Avoid Last Minute Changes
– Avoid Movies, Internet Links, Etc.
• Practice, Practice, Practice
Check Dress Code• Check Dress Code
During the Pitch
• Be Pleasant and Professional
• Listen CAREFULLY to Questions
• Be Open to Suggestions
– Coachable
D t t th t Y ’ G d P t• Demonstrate that You’re a Good Partner
Questions?Kenneth Knoll
kknoll@i2E [email protected]
Additional Information
Excerpts from “The Entrepreneurs Path:
A Handbook for High Growth Companies”
The Pitch
79
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titl
e.S
tate
the
nam
eof
you
rco
mpa
ny,a
ndg
ive
the
one
sent
ence
ver
sion
ofy
our
Ele
vato
rP
itch
toe
xcit
epe
ople
and
pro
vide
aq
uick
and
co
ncis
eun
ders
tand
ing
ofy
our
busi
ness
.Sha
reth
eco
mpa
ny
hist
ory
and
why
you
are
ther
e.
It’s
so
easy
to
spen
d t
oo m
uch
tim
e on
the
op
enin
g s
lide.
Ant
icip
ate
and
res
ist
this
te
mp
tati
on. D
o no
t sp
end
mor
e th
an o
ne m
inut
e,
top
s. Y
ou h
ave
less
tha
n 20
min
utes
for
you
r en
tire
pit
ch. R
esis
t sq
uand
erin
g y
our
tim
e.
Ma
rk
ET P
ro
BLE
MC
lear
lyc
omm
unic
ate
the
“pro
blem
”in
the
mar
kett
ola
yth
efo
unda
tion
for
the
slid
esth
atw
illf
ollo
w.P
rovi
detw
oex
ampl
esth
atw
illr
elat
eto
the
“unf
air”
adv
anta
geth
aty
our
solu
tion
has
.
you
r S
oLu
Tio
nD
escr
ibe
how
you
kno
wth
ere
isa
pro
blem
or
pain
inth
em
arke
t.T
his
isth
epl
ace
tos
hare
you
rpe
rson
ale
xper
ienc
efr
omta
lkin
gw
ith
cust
omer
s.B
esp
arin
g,b
uts
prin
kle
itin
.T
his
adds
cre
dibi
lity
and
dem
onst
rate
syo
urk
now
ledg
eof
th
em
arke
tnee
ds.W
hati
sth
epr
oble
mc
osti
ngth
em
arke
t?
Thi
sse
tsu
pth
eva
lue
prop
osit
ion
for
your
sol
utio
n,w
hich
yo
uw
illp
rese
ntin
the
next
sli
de.
The
Entr
epre
neur
’s P
ath
845
TH
E PI
TCH
85
Des
crib
eth
ees
senc
eof
you
rpr
oduc
tor
tech
nolo
gya
ndh
ow
its
olve
sth
ecu
rren
tpro
blem
inth
em
arke
tpla
ce.Y
oua
re
the
doct
or–h
owd
oyo
uea
seth
efin
anci
alo
rph
ysic
alp
ain?
Sum
mar
ize
your
sol
utio
nem
phas
izin
gth
eun
ique
ness
of
your
pro
duct
or
tech
nolo
gy,b
utD
ON
OT
get
mir
edin
the
“gee
-whi
z.”
Your
aud
ienc
ew
ants
tok
now
how
you
hav
epr
otec
ted
the
inte
llec
tual
pro
pert
y,b
uta
tthi
spo
int,
they
do
notn
eed
tok
now
abo
utth
ede
tail
sof
the
tech
nolo
gy.
Out
line
the
retu
rno
n in
vest
men
t (R
OI)
that
you
r so
luti
on
offe
rsth
ecu
stom
ers
and
how
long
itw
illt
ake
them
to
reco
upth
eir
inve
stm
ent.
Foc
uso
n th
e be
nefit
s to
the
cust
omer
.
Bu
Sin
ESS
Mo
dEL
Des
crib
eho
wy
our
prod
ucto
rse
rvic
ege
nera
tes
reve
nue
for
your
com
pany
.Doe
sit
foll
owth
eso
ftw
are
asa
ser
vice
(S
aaS)
mod
el?
Do
you
char
geli
cens
ing
fees
?Is
itp
urch
ase
only
?T
hem
ore
sim
plis
tic
the
busi
ness
mod
el,t
heb
ette
r.E
xpre
ssy
our
sale
s an
d ch
anne
l str
ateg
y.H
owd
o yo
u pl
an
tor
each
init
ialc
usto
mer
s?D
oyo
upl
anto
sel
ldir
ect?
Are
th
ere
exis
ting
dis
trib
utio
nch
anne
lsth
atw
ould
be
ago
odfi
tfo
rpa
rtne
ring
wit
hyo
u?
Ma
rk
ET d
EMa
nd
Exp
lain
why
som
eone
wou
ldw
antt
opa
yfo
ryo
urs
olut
ion.
Q
uant
ify
the
esti
mat
edm
arke
tsiz
e,in
clud
ing
pros
pect
ive
cust
omer
s,e
spec
iall
yea
rly
adop
ters
;mar
kets
egm
ents
,an
dpo
tent
ials
ales
rev
enue
s,b
utd
on’t
geta
llw
rapp
edu
pin
sky
-hig
hnu
mbe
rs.C
hara
cter
ize
the
key
attr
ibut
eso
fta
rget
cus
tom
ers.
Tal
kab
outy
our
first
-han
dex
peri
ence
and
e x
plai
nt h
er e
ason
f or
mar
ketg
row
tho
ver
t he
n ext
t hre
et o
fiv
eye
ars.
Co
MP
ETiT
ion
Cre
ate
aco
mpa
riso
ngu
ide
ofc
ompe
tito
rss
oth
aty
our
audi
ence
can
see
the
land
scap
eat
ag
lanc
e.I
nclu
deth
ebe
tter
fund
eda
ndm
ore
wel
l-kn
own
larg
eco
mpa
nies
as
wel
las
sm
alle
rin
nova
tive
com
peti
tors
.Don
’tig
nore
com
peti
tors
w
hoh
ave
apa
rtia
lsol
utio
n.D
escr
ibe
your
com
pany
’sst
rong
estb
arri
ers
toc
ompe
titi
veth
reat
s.B
ecl
ear
abou
tw
hati
twil
ltak
eto
get
cus
tom
ers
toc
hang
ew
hatt
hey
are
doin
gto
day.
Ine
rtia
iss
omet
imes
the
fierc
estc
ompe
tito
r!
gr
oW
Th o
PP
or
Tun
iTy
Dem
onst
rate
the
com
pany
gro
wth
pot
enti
ala
fter
init
ial
laun
ch.S
peci
fyw
hatn
eeds
toh
appe
nto
pro
duce
pos
itiv
eca
shfl
owu
sing
mil
esto
nee
xam
ples
.Use
you
rre
sear
cha
nd
know
ledg
eof
the
mar
kett
oil
lust
rate
the
char
acte
rist
ics
of
your
key
mar
kets
egm
ents
,and
the
natu
reo
fmar
ketg
row
th.
Show
the
urge
ncy
ofth
ene
edfo
rth
epr
oduc
tor
serv
ice
you
wil
lsup
ply.
The
Entr
epre
neur
’s P
ath
865
TH
E PI
TCH
87
Ma
na
gEM
EnT
TEa
MIn
vest
ors
know
that
exe
cuti
onis
eve
ryth
ing.
You
wil
loft
en
hear
inve
stor
ssa
yth
atth
eyp
refe
rto
inve
stin
an
“A”
man
agem
entt
eam
and
a“
B”
prod
uctr
athe
rth
anth
eot
her
way
aro
und.
Exp
erie
nce
inth
eta
rget
mar
ket,
grow
ing
sale
s,
buil
ding
team
s,a
ndm
anag
ing
capi
tali
sa
mus
t.
Thi
sis
you
rm
omen
tto
show
how
str
ong
your
team
is
indi
vidu
ally
and
tod
emon
stra
teh
oww
elly
ouw
ork
toge
ther
as
ate
am.D
escr
ibe
your
boa
rdo
fdir
ecto
rsa
nd/o
rad
viso
rs,
high
ligh
ting
thei
rst
rate
gic
valu
e.U
sec
onci
seb
ulle
tpoi
nts
tod
escr
ibe
expe
rien
ce.I
ndic
ate
who
isfu
ll-t
ime
and
who
is
part
-tim
e.
CE
O:P
rior
ent
repr
eneu
rial
exp
erie
nce
and/
ory
ears
ina
si
mil
arb
usin
ess
orm
arke
t
CT
O o
r C
MO
:Tra
ckr
ecor
din
cor
epr
oduc
tor
tech
nolo
gy
area
;kno
wle
dge
ofta
rget
mar
kets
and
rel
atio
nshi
pw
ith
the
indu
stry
CF
O:P
rior
exp
erie
nce
incl
udin
gac
quis
itio
nsa
ndo
ther
exi
tev
ents
.
Iden
tify
tech
nica
lor
busi
ness
adv
isor
s,m
ento
rso
rm
embe
rs
ofy
our
boar
dof
dir
ecto
rsa
ndth
eex
peri
ence
and
ski
lls
they
po
sses
sth
ats
uppl
emen
tint
erna
lski
lls.
fin
an
Cia
L P
ro
jEC
Tio
nS
Foc
uso
nth
ebo
ttom
line
.Sta
teth
eam
ount
ofc
apit
al
need
edto
rea
chb
reak
even
and
pro
fitab
ilit
y.P
roje
ct
real
isti
cre
venu
es.E
xpec
tto
expl
ain
shor
t-te
rmm
arke
tad
opti
ona
ndp
enet
rati
on,d
ram
atic
or
hock
eys
tick
gro
wth
,m
argi
nsb
eyon
dth
eno
rm,a
nda
nye
xten
ded
peri
ods
of
nega
tive
cas
hflo
w.
inv
ESTM
EnT
STr
aTE
gy
It
isa
lway
ssm
artt
oin
clud
ea
Cap
ital
izat
ion
Tabl
e.T
his
is
ata
ble
that
rep
rese
nts
who
ow
nsw
hatp
erce
ntag
eof
the
new
co
mpa
ny.I
fyou
rco
mpa
nyh
asn’
trec
eive
deq
uity
cap
ital
ye
t,th
isw
illb
ea
pict
ure
offo
unde
rs,f
rien
ds,a
ndfa
mil
yin
vest
men
tsa
ndp
erce
ntag
eso
fow
ners
hip.
Cha
rt 5
.1
Fin
anci
al P
roje
ctio
ns
La
test
Ac
tual
Proe
cted
Proje
cted
Proje
cted
Proje
cted
Proje
cted
Fin
ancia
lsYe
ar1
Year
2Ye
ar3
Year
4
Year
5
Reve
nue
128
1200
5,400
13,
600
24,30
0 36
,000
Costs
ofGo
odsS
old
82
650
2,200
5,2
00
9,100
13,
300
Gros
sPro
fit
46
550
3,200
8,4
00
15,20
0 22
,700
Gros
sPro
fit%
35
.9%
45.8%
59
.3%
61.8%
62
.6%
63.1%
Oper
ation
s/G&A
151
54
0 1,7
80
3,600
6,3
00
8,100
Incom
e/Lo
ssbe
fore
Tax
(105)
10
1,4
20
4,800
8,9
00
14,60
0
Inc./L
oss b
efore
Tax%
-8
2.0
0.8%
26.3%
35
.3%
36.6%
40
.6%
The
Entr
epre
neur
’s P
ath
885
TH
E PI
TCH
89
As
you
brin
gon
inve
stm
entc
apit
al,i
tis
alw
ays
impo
rtan
tto
keep
you
rC
apit
aliz
atio
nTa
ble
upto
dat
e.F
orp
rese
ntat
ion
purp
oses
,you
can
list
inve
stor
sby
gro
up.
Spli
tyou
rfu
ture
cap
ital
nee
dsin
toth
eap
prop
riat
ero
unds
m
atch
ing
the
key
mil
esto
nes
tob
eac
hiev
ed.H
ighl
ight
in
ase
nten
ceo
rtw
oth
eri
sks
asso
ciat
edw
ith
thos
epo
tent
ial
mil
esto
nes.
You
rgo
alis
top
rese
nta
nop
tim
isti
can
d re
alis
tic
view
as
you
see
itto
day.
uSE
of
fun
dS/
vaLu
aTi
on
Iden
tify
the
curr
entb
urn
rate
.Ide
ntify
the
maj
oru
ses
offu
nds
for
each
rou
ndu
pto
acq
uisi
tion
ora
ltern
ate
exit
scen
ario
.Use
of
fund
ssh
ould
focu
son
rev
enue
-gen
erat
ing
activ
ities
or
key
tech
nica
land
pro
duct
dev
elop
men
tmile
ston
es.
Incl
ude
ava
luat
ion
char
t,w
hich
you
wil
lund
erst
and
muc
hbe
tter
aft
ery
ouc
ompl
ete
Cha
pter
6.B
epr
epar
edfo
rto
ugh
ques
tion
ing
ify
our
com
pany
pre
-mon
eyv
alua
tion
exc
eeds
a
norm
alr
ange
for
the
curr
ents
tage
ofy
our
com
pany
.
Co
MPa
ny
MiL
ESTo
nES
Pro
vide
am
iles
tone
cha
rt-a
t-a-
glan
ceth
atil
lust
rate
spa
st
and
futu
reb
usin
ess
and
finan
cial
acc
ompl
ishm
ents
.The
se
mil
esto
nes
rela
ted
irec
tly
toth
eus
eof
fund
san
din
vest
men
tst
rate
gym
ater
ial p
rese
nted
iny
our
prev
ious
cha
rts.
Key
mile
ston
esto
incl
ude
are
com
pany
form
atio
n,te
chno
logy
or
pro
duct
ach
ieve
men
ts,p
asta
ndfu
ture
rou
nds
ofc
apita
l,po
sitiv
eca
shfl
ow,b
reak
-eve
npo
int,
and
exit
even
t.
Cha
rt 5
.2
Use
of
Fun
ds/V
alua
tion
/Inv
estm
ent
Stra
tegy
Amou
ntof
Se
ed
Pre-
Mone
yFu
nding
Po
st-Mo
ney
Foun
ders
Roun
dVC
Roun
d1
VCRo
und2
Valua
tion
Soug
ht
Valua
iton
Inv
esto
rsInv
stors
Inves
tors
Seed
Roun
d 1,2
50,00
0 50
0,000
1,7
50,00
0 1,2
50,00
0 50
0,000
71.4%
28
.6%
VCRo
und
3,000
,000
1,500
,000
4,500
,000
2,142
,857
857,1
43
1,500
,000
47.6%
19
.0%
33.3%
VCRo
und2
4,5
00,00
0 2,0
00,00
0 6,5
00,00
0 2,1
42,85
7 85
7,143
1,5
00,00
0 2,0
00,00
0
33
.0%
13.2%
2 3.1
% 30
.8%
Cha
rt 5
.3
Mile
ston
es
Comp
anyF
orme
d
$250
KPro
of-o
f-con
cept
Prod
uctP
roto
type
$400
K See
dRou
nd
Field
tests
$500
KAng
elRo
und
1stPr
oduc
tionS
hip
Posit
iveCa
shFl
ow
$2M
VCRo
und
50M
Annu
alize
dRev
enue
IPO/
Acqu
isitio
n
Jan-Mar
Mar-July
July-Dec
Jan-Mar
Mar-July
July-Dec
Jan-Mr
Mar-July
July-Dec
Jan-Mar
Mar-July
July-Dec
200
6
200
7 20
08
200
9
The
Entr
epre
neur
’s P
ath
905
TH
E PI
TCH
91
riS
k a
SSES
SMEn
TIt
isn
osu
rpri
seto
inve
stor
sth
ate
ntre
pren
euri
alb
usin
esse
sar
eri
sky.
The
yw
antt
okn
owth
aty
ouh
ave
real
isti
call
yan
alyz
edy
our
busi
ness
opp
ortu
nity
wit
hre
spec
tto
the
key
area
sof
ris
k.S
hare
you
ras
sess
men
thon
estl
y.T
ellt
hem
w
hatk
eeps
you
up
atn
ight
.Fol
low
the
risk
seg
men
tati
on
p roc
ess
p res
ente
di n
Cha
pter
2o
fthi
sg u
ide
a cco
rdin
gt o
pr
oduc
t, m
arke
t, bu
sine
ss, fi
nanc
e,a
nde
xecu
tion
ris
k.B
eop
ena
ndc
andi
dab
outt
hete
chni
cald
evel
opm
ents
ales
cy
cle,
ant
icip
ated
ado
ptio
n ra
te, c
ash
flow
s,p
erso
nnel
,co
mpe
titi
on,a
ndc
osts
.
EXiT
STr
aTE
gy/
Liq
uid
iTy
T
here
are
thre
epr
imar
ypo
siti
veo
ptio
nsfo
ran
exi
tor
liqu
idit
yev
ent–
acq
uisi
tion
,Ini
tial
Pub
lic
Off
erin
g(I
PO
),or
fire
sal
e.T
heth
ird
opti
onis
defi
nite
lyn
otfu
n!I
nves
tors
ar
eno
tint
eres
ted
inb
eing
par
toft
hec
ompa
nyfo
rli
fe.
Dem
onst
rate
that
whi
ley
our
inte
rest
isin
bui
ldin
ga
viab
le
busi
ness
,you
und
erst
and
that
you
rin
vest
ors
are
look
ing
for
ane
xita
ndr
etur
nin
thre
eto
five
yea
rs.E
xpre
ssth
eva
lue
prop
osit
ion
for
the
inve
stor
sin
eac
hof
the
exit
sce
nari
os
you
disc
uss.
How
do
they
get
thei
r m
oney
bac
k an
d w
hat i
sth
eir
retu
rn?
The
rea
rev
ery,
ver
yfe
wI
PO
sth
ese
days
.Dem
onst
rate
that
yo
uun
ders
tand
and
acc
eptt
his
real
ity
ofth
em
arke
tpla
ce.
Ifth
ere
are
any
spec
ifics
ofh
owa
cqui
siti
ona
ndI
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man
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TCH
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How
you
del
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isa
sim
port
anta
sw
haty
ou
say.
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rpi
tch
mus
tedu
cate
and
sel
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dit
’su
pto
you
to
achi
eve
the
appr
opri
ate
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nce
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oth.
Dem
onst
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you
rcu
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and
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pote
ntia
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pra
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me
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nfr
onto
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tofy
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vice
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pro
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earn
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ach
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au
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vest
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pra
ctic
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earn
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th
ise
xper
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nee
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wil
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our
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ence
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sor
do
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our
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his
as
ucce
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hen
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s,
that
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stth
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dad
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term
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nth
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ofth
e bu
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ketp
lace
.
Sample Business Plan for a high growth company
DISCLAIMER: THIS DOCUMENT CONTAINS CONFIDENTIAL & PROPRIETARY INFORMATION OWNED EXCLUSIVELY BY FAILSAFE HAZMAT COMPLIANCE, LLCAND WAS PREPARED FOR THE GOVERNOR’S CUP BUSINESS PLAN COMPETITION AS AN EXAMPLE PRESENTATION. SOME CONTENT HAS BEEN MODIFIED AND DOES NOT REFLECT ACTUAL FAILSAFE HAZMAT COMPLIANCE, LLC PRODUCT AND BUSINESS INFORMATION.
Software for Shipping pp gHazardous Materials Safely
Their Rules, Your Inventory, No Problem
David Thomison Kenneth Knoll
Hazmat is Everywhere
1 200 000 HAZMAT 1,200,000 HAZMAT SHIPMENTS PER DAY
Situation - Massively Complex
Thousands of Classifications
4 Transportation Modes
4 Regulatory Guidebooks 49CFR US Ground Air Vessel 49CFR – US Ground, Air, Vessel
ICAO/IATA – UN Air
IMDG – UN Vessel
ADR – UN Ground
Situation – Potassium Peroxide
Look up Potassium Peroxide
Can it ship on a plane?
How much can I ship?
What kind of container? What kind of container?
What type of hazmat label?
What documents are needed?
Does this react with other things?
Etc. Etc. Etc.
Mistakes Kill
ValueJet 110 people killed
Litigated Out of Business
Negligent Employees Jailed
The Failsafe Solution
Failsafe matches customer inventory to complicated regulations Potassium Peroxide = SYCHEM (barcode, sku)
No need to look things up in the regulationsg p g
Dock worker isn’t interpreting rules
No looking up regulationsreduces processing time by 90% Can Save $1,000,000/year
Business Model
Software as a Service, Recurring Revenue
Direct Sales to Major Chemical Companies and Hazmat Shippers
$10 per User License per Month $10 per User License per Month Dow Chemical has 40 warehouses in the U.S.
each with 5 software users
Typical Purchase: $2,000/month
UN1491Potassium Peroxide5.1ITruck4F fiberboard box Etc.
UN ID #:Proper Name:Hazard Class:
Packing Group:Mode:
Packaging:Etc.:
Technology and Workflow
XYZ Corp Administrator
ADR
IMDG
IATA
49CFR
XYZ Corp Data
JKL Company
GHI Company
DEF Company
ABC Company
SYCHEM SKU 49326
Company ID#:Container:
XYZ Corp User
SYCHEM123 Main StreetSYCHEM123 Main Street
Company ID#:Address:
Company ID#:Address:
SKU 493261 LiterEtc.
Container:Quantity:
Etc:
Market Demand
$2 Billion $2 Billion Market
Opportunity
Company Multi-ModalTransport
RegulatoryBodies
LogicBased
Pricing
Truck, Rail,Air, Vessel
49CFR, IATA,IMDG, ADR
Yes Failsafe $10 / License / MonthFailsafe By Mode $3 / License / Month
Truck, Air 49CFR, IATA No
ShipHazmat Standard - $895/userShipHazmat Partial - $725/userShipHazmat Network - $825/ user
Competition
, , p $ShipHazmat NET - $825/ userShipHazmat Ground - $150/ user
Truck, Rail,Air, Vessel
49CFR, IATA,IMDG
No $279.00/user
Vessel IMDG No $680/user
Truck, Rail,Air, Vessel
49CFR No $1,100/user
Vessel 49CFR No $4,200 / user
Management Team
David Thomison 19 Years Management in Marketing and Information
Technology
K th K ll Kenneth Knoll 5 Years Management in Hazardous Material/Motor
Carrier Compliance
Expert Advisory Board
Sarah Seagraves Director of the CCCAC Hazardous Materials program for the
Canada
President of US DOT
David Daviee Daviee Packaging Incorporated
Rex Smitherman Senior Hazmat Consultant for BASF (retired)
Development Timeline
Hire Additional
Coders
Finalize Standalone
Launch Private Beta
Code and Test
Launch Private Beta
Finalize Software
Hire VP Marketing & Sales
Introduce to Sales
Month 1 Month 5 Month 12
Standalone Products
Test Software Package
Software Package
Sales Channels
Bovine Chem Global Chemical Producer
$27.8 Billion in revenue
US Paint Global producer of coatings and
chemicals
$2.6 Billion in revenue
Sales Status
Targeting two primary hazmat segments: Chemical Companies headquartered in US
U.S. based transportation companies
Attending 3 upcoming trade shows
One committed customer for 200 seats
14 additional customers expressing interest
Sources & Use of Funds
Seeking $125,000 in equity investment Seeking $100,000 TBFP Loan Use of Funds
$85 000 Programming $85,000 Programming $52,000 Marketing and Advertising $69,000 Operating Expenses $19,000 Capital Expenditures
Seed Round A of $450k for full Market Launch
Financial Projections
Year 1 Year 2 Year 3 Year 4 Year 5
New Accounts / Failsafe 1 5 15 123 242
New Accounts / Failsafe by Mode 154 1 725 11,436 112,846 215,639
Total Sales 17,308 692,071 2,394,127 14,594,853 39,495,430
Gross Profit On Sales 15,908 641,671 2,271,277 13,442,530 37,512,161
Total SG&A Expenses 150,757 621,584 1,581,892 4,377,200 7,784,129
Net Income (Loss) from Operations (134,849) 20,087 689,385 9,065,330 29,728,032
Managing Critical Risks
Ease of use critical to market acceptance. 1of 2 companies meeting updated shipper requirements
Evolving regulations, domestically & internationally Expert management team with critical industry knowledgep g y g
Product liability risk Double-blind method; Integrated audit trails
Coding overruns Standalone products ensure early stage revenues
Investment Summary
Existing Ownership 50/50 among founders
Offering 12.5% Equity Shares for $125,000
Exit by Year 5 Sale to Hazmat Co (LabelMaster) or ERP (SAP, Oracle)
20X Return to Seed Investors
Great Team
Industry Experts to Make Introductions
20
y p
Known Customer Interest
Significant Market Opportunity
Session 5 Tab
In the real world, ideas don’t make it far without input from industry experts. Each competing team will sit down for a 20 minute interview where you will be probed on your knowledge of the concept and you can ask the panel for advice. Teams will be interviewed based on their industry category rather than academic division. There is no presentation, no handouts, no guests … just the team and the panel. This is more than a casual discussion … $25,000 in prize money is on the line. After the last interview, each panel will rank the teams with the top-ranked team in each category winning $5,000. The ranking will later be used to establish a cumulative score that will help determine which teams advance to the oral competition.
First up is the Who Wants to Be an Entrepreneur workshop. Designed for college students, this is a no-cost, one-day course on all the es-sentials of entrepreneurship, from researching a concept, writing a business plan, making fi nancial projections and pitching your concept. Next, you need to determine an innovative product, process or service around which to build a business plan – then carefully select up to 6 team members from diverse academic disciplines and fi nd a faculty advisor or team mentor who can guide you. You also will want to take advantage of an oppor-tunity to have your idea reviewed by venture development professionals.
22 i&E Summer 2011 Summer 2011 i&E 23
Governor’s Cup 2012
The Rewards
Winners of the Governor’s Cup competition will be announced at a gala Awards Dinner before an audience of 500. The top two teams in each division will go on to compete in the Tri-State Competition in Las Vegas, where an additional $90,000 will be awarded. That’s more than $250,000 in cash prizes – plus scholarships – that will be awarded. But the sum of all the parts of the Governor’s Cup is bigger than the cash or even the bragging rights. It is networking, job opportunities, life-long relationships and an experience that will help guide you as you
continue your journey down the entrepreneur’s path.
The Governor’s Cup Business Plan competition is evolving to bring you more in 2012 … more opportunities to hone your idea with a professional review, more teams moving forward to the presentation round and more cash prizes – nearly 40 awards up for grabs – totaling $154,000. So here’s the big picture:
With research and writing complete, now it’s time to submit your plan on-line. Written business plans will be judged by investment, business and community leaders, who will score the plans and provide feedback that can be used by teams to improve their presentation should they advance to the next round. Scores from the business plan judging will be paired with rankings from the Interviews, and cumulative scores will be used to determine the 24 semifi nalists – 12 Graduate and 12 Un-dergraduate. This round is worth $36,000, with each team that advances earning $1,000 and advisors/mentors $500 each.
The PresentationIt all comes down to this with $80,000 on the line. As one of 24 semifi nalist teams you will make a 20-minute investor presentation about your business opportunity. Your delivery, content and ability to fi eld tough questions by the judges will earn you the opportunity to advance to the fi nal round of presentations. Finalists will be announced at a networking reception at the conclusion of the semifi nalist round of presentations. The judges’ comments will be provided after the announcements so teams can review that evening and prepare for the next day’s fi nal round. A representative from each of the fi nalist teams will also make a 90-second pitch worth an additional $5,000. Simultaneous to the oral presentations will be interviews for the Oklahoma Business Roundtable Paulsen Award, which provides two students with a $5,000 scholarship that can be used for tuition on any Oklahoma college campus.
www.okgovernorscup.org.
The Interview
The Prep
The Plan
teams moving forward to the presentation round and more cash prizes – nearly
In the real world, ideas don’t make it far without input from industry experts. Each competing team will sit down for a 20 minute interview where you will be probed on your knowledge of the concept and you can ask the panel for advice. Teams will be interviewed based on their industry category rather than academic division. There is no presentation, no handouts, no guests … just the team and the panel. This is more than a casual discussion … $25,000 in prize money is on the line. After the last interview, each panel will rank the teams with the top-ranked team in each category winning $5,000. The ranking will later be used to establish a cumulative score that will help determine which teams advance to the oral competition.
First up is the Who Wants to Be an Entrepreneur workshop. Designed for college students, this is a no-cost, one-day course on all the es-sentials of entrepreneurship, from researching a concept, writing a business plan, making fi nancial projections and pitching your concept. Next, you need to determine an innovative product, process or service around which to build a business plan – then carefully select up to 6 team members from diverse academic disciplines and fi nd a faculty advisor or team mentor who can guide you. You also will want to take advantage of an oppor-tunity to have your idea reviewed by venture development professionals.
22 i&E Summer 2011 Summer 2011 i&E 23
Governor’s Cup 2012
The Rewards
Winners of the Governor’s Cup competition will be announced at a gala Awards Dinner before an audience of 500. The top two teams in each division will go on to compete in the Tri-State Competition in Las Vegas, where an additional $90,000 will be awarded. That’s more than $250,000 in cash prizes – plus scholarships – that will be awarded. But the sum of all the parts of the Governor’s Cup is bigger than the cash or even the bragging rights. It is networking, job opportunities, life-long relationships and an experience that will help guide you as you
continue your journey down the entrepreneur’s path.
The Governor’s Cup Business Plan competition is evolving to bring you more in 2012 … more opportunities to hone your idea with a professional review, more teams moving forward to the presentation round and more cash prizes – nearly 40 awards up for grabs – totaling $154,000. So here’s the big picture:
With research and writing complete, now it’s time to submit your plan on-line. Written business plans will be judged by investment, business and community leaders, who will score the plans and provide feedback that can be used by teams to improve their presentation should they advance to the next round. Scores from the business plan judging will be paired with rankings from the Interviews, and cumulative scores will be used to determine the 24 semifi nalists – 12 Graduate and 12 Un-dergraduate. This round is worth $36,000, with each team that advances earning $1,000 and advisors/mentors $500 each.
The PresentationIt all comes down to this with $80,000 on the line. As one of 24 semifi nalist teams you will make a 20-minute investor presentation about your business opportunity. Your delivery, content and ability to fi eld tough questions by the judges will earn you the opportunity to advance to the fi nal round of presentations. Finalists will be announced at a networking reception at the conclusion of the semifi nalist round of presentations. The judges’ comments will be provided after the announcements so teams can review that evening and prepare for the next day’s fi nal round. A representative from each of the fi nalist teams will also make a 90-second pitch worth an additional $5,000. Simultaneous to the oral presentations will be interviews for the Oklahoma Business Roundtable Paulsen Award, which provides two students with a $5,000 scholarship that can be used for tuition on any Oklahoma college campus.
www.okgovernorscup.org.
The Interview
The Prep
The Plan
teams moving forward to the presentation round and more cash prizes – nearly
About the Governor’s Cup
The Donald W. Reynolds Governor’s Cup is a statewide collegiate business plan competition that simulates the real-world process of entrepreneurs creating a business plan and making a pitch to solicit start-up funds from potential investors.
In its first seven years, the Governor’s Cup attracted more than 290 innovative ideas from 26 campuses across the state. Altogether, more than 950 students have tested their entrepreneurial skills while competing for more than $1.2 million in cash.
New for 2012 is The Interview in which every competing team will sit down for a face-to-face interview with experts in their particular industry category. There is no presentation, no handouts, no guests, just the team and the panel. Teams will be expected to display their knowledge of their business and competitive advantages, articulate the business model and how the business makes money, and display competency across the team. The top-ranked team in each of five industry categories will earn $5,000. The interview rankings also will be combined with results from written business plan judging to establish a cumulative score in later stages of the competition.
Additionally, 24 teams will be selected to make oral presentations in the semifinal round earning them $1,000, with advisors receiving $500 each.
Total prize money awarded in the 2012 competition will be $154,000. Other cash awards include the Oklahoma Business Roundtable Paulsen Award scholarships and the Al Tuttle Business Incubation Award. Another $90,000 will be on the line in the Tri-State competition in Las Vegas for the first and second place graduate and undergraduate Oklahoma winners.
The Governor’s Cup is underwritten by the Donald W. Reynolds Foundation and local partners, and is managed by i2E.
The competition continues to send the message that Oklahoma has the resources, talent and the fortitude to retain our emerging entrepreneurs and build an innovation economy. It has helped to establish companies, encouraged students to continue their education and provided networking and career opportunities.
Eligibility The intent of this competition is to expose students to real world experiences and to enhance their entrepreneurial skills while expanding career options after graduation to include entrepreneurship and starting their own company.
The competition is open to all faculty- or mentor-sponsored, full-time and part-time undergraduate and graduate students enrolled at any of Oklahoma’s universities or colleges. Students who graduate in December prior to the competition are still eligible to compete.
The role of the Advisor for the purpose of the competition is largely administrative. The Advisor provides confirmation of the eligibility of the students, enforces competition rules, and is a point of contact for the competition managers. In addition they are expected to provide guidance in researching, writing and presenting the business plan. Advisors can be faculty members or community mentors.
It is not the intent of the competition to be a turnkey commercialization program. In most cases entrepreneurs need years of professional experience before launching a new venture.
Business Plan Requirements
-The business plan must be for a high growth seed, start-up, or early stage venture and must address the entire business concept including implementation.
-At least one team member must have a key role in the company's management team.
-Ineligible are proposals for the buy-out or expansion of an existing company, tax-shelter opportunities, franchise, real estate syndications, and other consulting projects and analyses.
-Teams composed of at least one student enrolled in the graduate school must compete in the graduate competition even if undergraduates are members of the team. If they graduate in December prior to year of competition they are still eligible to compete.
-The business plan must commercialize a new technology product, service, or process, or apply an existing technology in a novel way. This may include an application of technology in the production or distribution of industrial or consumer goods or in retail or service business.
Technology-based, for the purpose of this competition, means any one of the following:
• Healthcare This encompasses the life sciences broadly, including pharmaceuticals, biotechnology and medical devices. Subsets of the category include life systems technologies, nutraceuticals, and cosmeceuticals.
• Information Technology/Communications Information technology refers to anything relating to computing and the retrieval, storage and transmission of data, including networking, hardware, software, the Internet or the people who work in these technologies. It can include Internet retail concepts (eCommerce), Web apps, electronics, robotics and applied mechanics. Communications includes telecommunications, devices for transmitting and receiving voice and data, both wired and wireless as well as networks that tie different devices together. Subsets of both information technology and communications can include systems for communicating between health care databases, storing medical information or ways of collecting and processing payment information.
• Manufacturing, material sciences and transportation Manufacturing includes both the process and the machinery used to turn raw materials into a finished product.
Material sciences are important to many engineering fields such as electronics, aerospace, telecommunications, information processing, nuclear power and energy conversion. It includes materials composed of metals, ceramics, plastics and carbon-based nanoparticles. Transportation includes vehicles that move people and cargo, as well as systems and devices that enhance vehicles or assist in transportation. That can include roads, rails, air, water and even space.
• Energy and Environmental Energy refers to technologies and processes that enable the efficient recovery of oil and gas or the generation and delivery of power through alternative means such as wind, sun and bioenergy sources that are derived from plant-based or waste materials. Environmental, also known as “green technology,” includes devices, materials and techniques for reusing, recycling, reducing or reclaiming of resources, reducing energy consumption, etc.
-The business plan and presentation must represent ONLY the original work of each official team member indicating them as the authors of the plan. Business plans developed through previous programs or classes of which other students, mentors or interns have developed presentations or plans on the same technology are not eligible.
-Be sure to review the Sample Business Plan and other resources available, read the Rules and review the Written Presentation Scorecard, Oral Presentation Scorecard, and Sample Pitch to ensure your work follows the criteria.
CASH Awards The Interview- $25,000
Each competing team will sit down for a 20-minute interview with experts in their particular industry category. Teams will be expected to display their knowledge of their business and competitive advantages, articulate the business model and how the business makes money, and display competency across the team. There is no presentation, no handouts, no guests, just the team and the panel. Teams will be interviewed based on industry rather than academic division. After the last interview, the panel will rank the teams with the top-ranked team in each of five industry categories winning $5,000. The ranking will later be combined with scores from written business plan judging to establish a cumulative score that will help determine which teams advance to the oral competition.
Interview Cash Awards
• Healthcare, $5,000 • IT/communications, $5,000 • Energy/environmental, $5,000 • Manufacturing, materials and transportation, $5,000 • Student generated, $5,000
Semifinalists Cash Awards
A Semifinal selection for both Graduate and Undergraduate divisions will be posted online and an email notification will be sent to the Team Leaders and Advisors with judges’ comments. Cash awards of $1,000 and an Achievement Certificate will be given to each of the Semifinalist teams at the Networking Reception, April 13, 2012.
Graduate Undergraduate Advisor
Semifinalists $1,000 each (12 teams) $1,000 each (12 teams) $500
From the 12 Semifinalist teams, six Finalists in each division will be selected by a panel of judges after the first round of oral presentations. The Finalists will then compete for the 1st, 2nd and 3rd place Grand Prizes in the final round of the competition. The winners will be announced at the Governor’s Cup Awards dinner on April 19, 2012.
Grand Cash Awards Winners Graduate Undergraduate Advisor
1st Place $20,000 $20,000 $2,000
2nd Place $10,000 $10,000 $1,500
3rd Place $5,000 $5,000 $1,500
Pitch Cash Awards All finalist teams will choose a team member to give a 90-second pitch on their business plan. Pitches will be made directly after the teams' oral presentation on Saturday, April 14, in a separate room. The pitches will be video recorded, with winning teams from each division receiving $2,500 each.
Graduate Undergraduate
Winning Pitch $2,500 $2,500
Tri-State Competition Each Undergraduate and Graduate first and second place winners from Arkansas, Nevada and Oklahoma will compete in a one day oral competition for an additional $90,000 in cash prizes. Each team will give a live 90 second pitch at the awards dinner and a winner in each division will receive $1,000 cash.
Graduate Undergraduate Advisor
1st Place $25,000 $25,000 $2,500
2nd Place $15,000 $15,000 $2,500
3rd Place $0 $0 $0
Additional Awards
The Paulsen Awards The Oklahoma Business Roundtable will award two scholarships in the amount of $5,000 each. All students competing in the Governor’s Cup are eligible to apply.
The Al Tuttle Business Incubation Award The Al Tuttle Business Incubation award provides one graduate level business team business incubation space and services for one year.
2012 Timelime September 30 Who wants to be an Entrepreneur? Workshop
December Break Independent Review- not required, no scoring
February 6 Independent Review- not required, no scoring
February 13 Official Application Form Deadline
February 24 The Interviews in OKC
March 9 The Plan
Written BP & Submittal Form Deadline
March 12 Written BP Judges Meetings
March 12-19 Plans undergo Independent Review process
March 19 Semifinalists Announced
April 9 Revised Plan, Presentation and Submittal Form Deadline
April 11 Oral Competition Judges Meeting
April 13 The Presentation- 2 day event
12 Undergraduate and 12 Graduate Semifinalists Paulsen Award Finalist Interviews
April 13 Governor’s Cup Networking Reception
April 14 6 Undergraduate and 6 Graduate Finalists
Finalist Pitch Competition
April 16 Announce Pitch Finalists
April 19 Governor’s Cup Awards Dinner
TBD Tri State Competition- Las Vegas, Nevada
Session 6 Tab
About our Sponsors
Without the support of these local organizations we could not bring you the Who wants to be an
Entrepreneur? Workshop.
So we thought you might want to know a little bit more about them and be sure to thank them for
their support.
October 1, 2011 OK L-SAMP 17th Annual Research Symposium Noble Research Center, OSU Campus Stillwater, Oklahoma
October 4, 2011 Women in Science Conference Science Museum Oklahoma Oklahoma City, Oklahoma
October 11-12, 2011 Supercomputing Symposium Thurman J. White Forum Building, OU Campus Norman, Oklahoma
October 24-27, 2011 NSF EPSCoR National Conference The Coeur d’Alene Resort Coeur d’Alene, Idaho
November 4, 2011 OK Research Day for Regional Universities Cameron University Lawton, Oklahoma
March 15, 2012 Research Day at the Capitol State Capitol of Oklahoma Oklahoma City, Oklahoma
For more information on these and other EPSCoR-sponsored programs
visit www.okepscor.org
or call Gina Miller, outreach coordinator, at 405.744.9964 or email [email protected]
UPCOMING EVENTS
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FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
NIH IDeA
NSF EPSCoR
DOE
DEPSCoR
EPA
NASA
February 2010
Agency Program Award Amount Type of Award
NSF EPSCoR $23.8 million Research Infrastructure (2 awards)
NIH IDeA $19.6 million INBRE (1 award)
NIH IDeA $63.5 million COBRE (6 awards)
DoD DEPSCoR $6.8 million Applied Research (9 awards)
DOE DOE EPSCoR $2.5 million Implementation Grant (1 award)
NASA EPSCoR $3.8 million Research Infrastructure (3 awards)
Meet the Director
In January 2010, Dr. Jerry Malayer became the Director of Oklahoma’s EPSCoR. In this position, he coordinates Oklahoma’s research activities for federal EPSCoR pro-grams and the NIH INBRE Program. Dr. Malayer is the Associate Dean for Research and Graduate Education in the Center for Veterinary Health Sciences at Oklahoma State University. He is a Professor in the Department of Physiological Sciences in the College of Veterinary Medicine. Dr. Malayer also serves on the Board of Directors for the EPSCoR/IDeA Foundation, a national organization that works with states and agen-cies that participate in the federally-sponsored EPSCoR and IDeA programs with a goal to increase awareness, visibility and participation of EPSCoR and IDeA states in the nation’s scientific and technological enterprise.
Current Active Oklahoma EPSCoR/IDeA Awards
What is EPSCoR and IDeA? Federal EPSCoR (Experimental Program to Stimulate Competitive Research) and the NIH IDeA (Institutional Development Award) programs provide funding for sci-ence and technology research to states that historically have been less competitive for federal R&D funding. The programs are merit-based initiatives geared to improve research competitiveness. Oklahoma is one of 29 states/jurisdictions participating in EPSCoR programs administered by the National Science Foundation (NSF), the National Institutes of Health (NIH), the Department of Defense (DoD), National Aeronautics and Space Administration (NASA), the Department of Energy (DOE), the Environmental Protection Agency (EPA), and the United States Department of Agriculture (USDA). Through competitive peer review, these programs allow states to stimulate cutting-edge research initiatives that generally include collaborations among institutions. The broad objectives of EPSCoR and IDeA are to build state research capacity, to fuel economic development and to provide students with access to higher education oppor-tunities.
www.okepscor.org www.okinbre.org
Active Oklahoma Awards by Year
Activities and Events
OK Museum Network Mobile Science Vehicle Women in Science Conference
Bioenergy Summer Technology Academies Oklahoma Research Day for Regional Universities
Research Experiences for Undergraduates Annual State Conference NSF Grants Workshop
Research Opportunity Awards OU Supercomputing Symposium
OCAST Industry Internships “Who Wants to be an Entrepreneur” Workshop
Research Day at the Capitol INBRE Undergraduate Summer Research Program
Faculty Collaborative Grants Faculty Mini Grants
Faculty Equipment Grants Faculty Release Time Mini Medical School
K-12 Outreach
Five-Year Return on Investment The Oklahoma State Regents for Higher Education administers the Oklahoma EP-SCoR Program. The Chancellor serves as the Chair of the EPSCoR Advisory Commit-tee. Since FY05, the Oklahoma State Regents for Higher Education have invested $12.2 million for EPSCoR projects. University participants in Oklahoma EPSCoR pro-grams over this time period have invested $6.3 million towards EPSCoR projects in Oklahoma, in addition to long-term faculty committments. The five-year award total for Oklahoma EPSCoR is approximately $129 million in aggregate funding.
Oklahoma EPSCoR/IDeA Award Highlights on Back
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Oklahoma EPSCoR/IDeA Award Highlights
NIH IDeA IDeA Network of Biomedical Research Excellence (INBRE) $19.6 million (FY09) NIH IDeA awarded Oklahoma approximately $19.6 million over five years beginning May 2009 to establish an IDeA Network of Biomedical Research Excellence, with the goal of increasing the number of NIH-funded scientists in biomedical research state-wide. The OK INBRE encompasses fifteen higher education institutions, including five research institutions, six primarily undergraduate campuses and four community col-leges. The OK INBRE supports major research projects in the areas of microbiology and immunology, cancer, and developmental biology. Cores and facilities include a Bioinformatics Core, supporting the science of understanding the structure and func-tion of genes and proteins through advanced, computer-aided statistical analysis and pattern discovery; an Imaging Core that conducts research using live animal magnetic resonance imaging; and an Outreach Core that will increase the number of under-graduates involved in STEM research programs.
Centers of Biomedical Research Excellence (COBRE) $10.8 million (FY08) In 2007, Oklahoma was awarded it’s 7th COBRE grant. The University of Oklahoma Health Sciences Center (OUHSC) is the recipient of five years of funding for “Mentoring Diabetes Research in Oklahoma.” The project will expand the diabetes research program in Oklahoma and form partnerships with tribal communities to im-prove research and intervention for diabetes. $10 million (FY08) In 2007, the OUHSC received a five-year renewal to its COBRE grant “Mentoring Vi-sion Research in Oklahoma” which will bring an enhancement of knowledge to the treatment and prevention of debilitating and blinding eye diseases, as well as neu-rodegeneration and bacterial infectious diseases. The grant is a collaboration of com-prehensive research universities and Langston University. $18.7 million (FY05) Two COBRE grants awarded in 2000 received an additional five years of funding in FY05 each at levels of approximately $9.5 million from NIH and $100,000 in matching funds from the Oklahoma State Regents for Higher Education. One award at OUHSC establishes the Center for Functional Genomics/Proteomics for Bacterial/Host Interac-tions and examines how infectious microorganisms cause disease and how the human host responds to this infection. The second grant, “Mentoring Immunology in Okla-homa: A Biomedical Program,” was awarded to the Oklahoma Medical Research Foundation (OMRF) and provides mentoring to junior faculty, starter grants and joint research projects. $12 million (FY04) This $12 million award for “Molecular Mechanisms and Genetics of Autoimmunity” supports exploration of the genetic association in pediatric patients with systemic lu-pus erythematosus, among other research projects. The project will provide a much deeper understanding of autoimmune diseases and will foster the development of junior investigators. $20 million (FY03) In FY03, Oklahoma received awards for two COBRE grants, one to OUHSC and one to OMRF. At OMRF the $10 million grant “Post-Translation Modifications in Host De-fense” focuses on projects involving glycosylation, the addition of sugar chains to molecules during or after synthesis. At OUHSC, the project “Biofilm Formation and Metabolism on Dental Surfaces” is taking a multidisciplinary approach to study micro-bial biofilm formation on natural and artificial dental surfaces.
NSF EPSCoR Research Infrastructure Improvement Award $20.5 million (FY08) NSF awarded Oklahoma $15 million, with additional matching funds of $5.5 million from the Oklahoma State Regents for Higher Education, for a Research Infrastructure Improvement Award. The five-year grant provides the resources necessary for the state to become nationally competitive in biofuels re-search. The biofuels project will seek to enhance the produc-tion of ethanol from switchgrass, with emphases on increasing plant biomass yield and on enhancing the conversion of bio-mass to ethanol by both microbial and thermocatalytic meth-ods. This proposal builds on both genomics and nanotechnol-ogy infrastructure developed during the current and previous NSF EPSCoR awards.
NASA EPSCoR In October 2009, Oklahoma was awarded $750,000 over three years from NASA EPSCoR for “Next Generation Com-posite Materials for Aerospace and Exploration Systems.” The OSRHE are providing $150,000 and participating univer-sities are providing $487,756 in matching funds for the award. In August 2007, Oklahoma was awarded $1.9 million over three years from NASA EPSCoR for three awards. The OS-RHE is providing $939,000 and participating universities are providing $1 million in matching funds for the awards. The funding supports three awards for research infrastructure development, a Center for Lightning Advanced Studies and Safety, and research on space crew dosimetry and space radiation environment.
DOE EPSCoR In July 2007, Oklahoma State University received a three-year renewal award from the DOE EPSCoR program in the amount of $1.3 million, matched by $525,000 from the OSRHE and $870,000 from the participating institutions for a Center of High Energy Physics. The Center is a collaboration between OSU, OU Norman and Langston University.
DoD DEPSCoR For FY09, the DoD DEPSCoR program awarded Oklahoma research university investigators $2.1 million, matched by $300,000 from OSRHE and $666,000 from participating uni-versities for four projects from OSU and OU Norman.
This document does not necessarily reflect the views or opinions of the National Science Foundation. The Oklahoma State Regents for Higher Education, in compliance with Titles VI and VII of the Civil Rights Act of 1964, Executive Order 11246 as amended, Title IX of the Education Amendments of 1972, Americans with Disabilities Act of 1990 and other federal laws and regulations, do not discriminate on the basis of race, color, national origin, sex, age, religion, handicap, or status as a veteran in any of its policies, practices or procedures. This includes, but is not limited to, admissions, employment, financial aid and educational services. This publication, printed by Oklahoma Experimental Program to Stimulate Competitive Research, was issued by the Oklahoma State Regents for Higher Education in February, 2008 as authorized by 70 O.S. Supp. 2001, Section 3206. One hundred copies have been printed at a cost of approximately $5.55. Copies have been deposited with the Publications Clearinghouse of the Oklahoma Department of Libraries.
Contact Oklahoma EPSCoR www.okepscor.org www.okinbre.org
Jerry Malayer, Ph.D. Professor and Associate Dean for Research and Graduate Education Center for Veterinary Health Sciences Director, Oklahoma EPSCoR Oklahoma State University 222 McElroy Hall Stillwater, OK 74075 [email protected] 405.744.6750 James Wicksted, Ph.D. Department Head and Professor, Physics Department Associate Director, Oklahoma EPSCoR 415 Whitehurst Oklahoma State University Stillwater, OK 74078 [email protected] 405.744.9964
Contact: Josh O’Brien, Director of Entrepreneurial Development E-Mail: [email protected] Phone: 405-813-2412
The Office of Entrepreneurial Development is a joint initiative between i2E, Inc., and the Greater Oklahoma City Chamber to provide resources and assistance for entrepreneurs in high growth sectors. The new office works closely with i2E’s entrepreneurial development efforts such as the Donald W. Reynolds Governor’s Cup collegiate business plan competition, along with initiatives to develop further support services for entrepreneurs.
OVERVIEW
STRATEGIC FOCUS
The Office of Entrepreneurial Development was created in early 2011 as a two-year collaborative agreement between i2E and the Chamber to enhance programs that support the growth of Oklahoma entrepreneurs and innovation-based industries. The office enhances that support in the following ways:
Sustains networks and programs that supportentrepreneurs and high growth companies;
Increases access to risk capital for Oklahomaentrepreneurs;
Supports the development of futureentrepreneurs through business plancompetitions, fellowships and conferences;
Raises awareness of entrepreneurship and helpscreate a climate that encourages the launch andsuccess of high growth companies;
Supports the development of Angel investmentand other risk capital; and
Provides communications that includenewsletters, public relations, website resourcesand related materials.
SPECIFIC PROGRAMS
Here is a partial list of specific programs and initiatives to which the Office of Entrepreneurial Development supports, develops and raises funds:
Federal funding to Oklahomaentrepreneurs through the SmallBusiness Innovation Research (SBIR) program;
Hands-on assistance to networkingevents and educational programs that enhance the profiles of Oklahomaentrepreneurs and brings them togetherwith investors, students, faculty andstate policy makers;
Sponsorship of the Donald W. ReynoldsGovernor’s Cup business plancompetition based on high growthenterprises for Oklahoma collegestudents; and
Sponsorship of an Angel fundingcompetition that more directly connectsthe growing angel investor network toentrepreneurs in high growth sectors.
Office of Entrepreneurial Development
i2E Managed FundsAccess to Capital
Website: www.i2E.org/access-to-capital E-Mail: [email protected]
Oklahoma Concept Fund: As a part of the Oklahoma Seed Capital Fund, these investment dollars target companies still in the conceptual stage that don’t yet have an actual product. The investment capital will allow them to transition an idea to a working prototype and/or validate the value to the targeted customer in order to evaluate the business concept.
Oklahoma Seed Capital Fund: This seed stage fund targets companies that may or may not already have customers, some revenues and a scalable product. The investment funds enable them to build a business infrastructure around their concept or product.
StartOK Accelerator Fund: This fund invests in companies that are in the earliest stages or startup stage that have not yet generated any revenue or completed a market launch. This capital will enable them to take their concept or product prototype into beta test phase with potential customers or first sales.
GrowOK Fund: This fund seeks established companies with existing products or services that are generating revenue in the market place. The fund will enable these companies to expand new products or services and allow even more growth in both revenue and employees.
OK Angel Sidecar Fund: This fund overlays all four of the i2E companion funds, providing leverage and capital to angel investment in Oklahoma companies at any stage of the continuum of business development. This fund essentially doubles the size and scope of angel investment in Oklahoma because it requires a one-to-one co-investment from angel investors and/or angel groups.
Manufacturing Innovation Fund: This is a pilot program that provides debt financing for established Oklahoma manufacturers. Financing through this program will allow them to innovate or expand with production of a new product or improve an existing product. Loan repayments will support subsequent future financings through the fund.
SeedStep Angels: This is a network of more than 20 successful Oklahomans who provide capital, strategic advice and mentoring to emerging growth companies to help them succeed. Typical investments range from $50,000-$500,000 with individual members making investment decisions.
i2E offers a continuum of investment capital for Oklahoma’s emerging high growth companies over a wide spectrum of the business lifecycle, from the earliest conceptual stage on through to the growth stage where companies have both a product, revenue and customers. Here’s how i2E’s access to capital services will flow through the stages of company development:
i2E CAPITAL FUNDING STAGES
Time
Prof
it
OK Angel Sidecar FundGrowOK
Concept Fund
Seed FundStartOK
Seed Start-UpEarly
Breakeven
Growth
New i2E Funds Existing i2E Funds
Manufacturing Innovation Fund
The Oklahoma Business Roundtable serves as the state’s major economic development support organization.
Comprised of over 115 top Oklahoma corporations and business organizations, the Roundtable provides important business development advice and assistance to the Governor, the Oklahoma Department of Commerce and other state leaders. Private funding is needed for business development efforts when state appropriated funds cannot be used.
The Roundtable helps fund important business promotion activities to spur the expansion and recruitment of new business in Oklahoma. Roundtable members also play a key role in contacting and hosting both domestic and international clients.
To date, the Roundtable has provided support for hundreds of state and regional economic development promotional activities resulting in over 500 corporate investments throughout Oklahoma.
www.okbusinessroundtable.com [email protected] P.O. Box 26980 Oklahoma City, OK 73126-0980 405.235.3787
The Oklahoma Center for the Advancement of Science and Technology (OCAST) is the state’s only agency whose sole mission is the development, transfer, and commercialization of technology. The overarching goal of OCAST is to spur Oklahoma technology-based innovation by offering a pipeline of funding and service programs that have become a national model. OCAST fosters development of new technology or innovative uses of existing technology from concept to commercialization. In contrast to states where such efforts are fragmented among numerous entities, in Oklahoma these programs are all administered “under one roof”. OCAST has nationally recognized initiatives in: competitive funding for R&D in industry and Oklahoma’s research entities; university-business internship programs; industry/researcher collaborations; technology commercialization; manufacturing extension; inventors’ assistance; and financial and technical assistance with pursuing federal funding opportunities. These programs have been developed to be dynamic and thereby able to keep pace with the ever-changing needs of industry and academia.
OCAST was designed as a small, high-impact agency funded by state appropriations and governed by a board of directors with members from both the private and public sector. All OCAST programs benefit from standing advisory committees that consist of members from industry and academia.
OCAST operates in partnership with organizations across the state including private industry, higher education, Oklahoma Department of Career and Technical Education, and the Oklahoma Department of Commerce. Additionally, OCAST collaborates with strategic contracting partners – The Oklahoma Manufacturing Alliance, i2E Inc., and the New Product Development Center at OSU – to expand its network of resources, expertise, and funding initiatives.
Since the agency’s inception in 1987, OCAST has seen a $3.9B return on $ 196M in investments in Oklahoma technology – a ratio of nearly 19:1.
755 Research Parkway, Suite 110
Oklahoma City, OK 73104-3612 www.ok.gov/ocast/
live centralUNIVERSITY OF CENTRAL OKLAHOMA
Edmond, OK • (405) 974-2000 • www.uco.eduTM
