©2003 Prism Venture Partners October.2003 Michigan State University

©2003 Prism Venture Partners Behind the Music: Real Life in a Startup William M. Seifert General Partner Prism Venture Partners

©2003 Prism Venture Partners “Nothing happens....unless first a dream” - Carl Sandburg..until somebody sells something” - William McGowan 2

©2003 Prism Venture Partners Who is this guy, Seifert? Graduate of Michigan State University, BSEE ‘71, MSEE ‘75 Military Service, U. S. Army Signal Corps officer, Microprocessor systems engineer, Los Alamos National Lab, Systems Engineer, Digital Equipment Corp., Founder, Utility Infielder, Interlan, Inc., Founder, Chief Technical Officer, Wellfleet Communications, Founder, CEO, Agile Networks, (acquired by Lucent, 1996) General Partner, Prism Venture Partners, 1998-present 3

©2003 Prism Venture Partners What I have to say.. Organizing a Startup Challenges and Opportunities What To Do Before the Money Getting Funded Now What? 4

©2003 Prism Venture Partners Organizing a Startup The team..people, people, people What’s the problem? Who is the customer? How are you going to make (me) money? “The first casualty in war is the plan..” - General George S. Patton 5

©2003 Prism Venture Partners Building a Team Focus - Customer Problems Management Priorities Customers Employees Investors Share the equity, share the wealth-creation Incentives work! 6

©2003 Prism Venture Partners People, people, people Intellectual assets – what technology startups rely on Experience matters Attitude – doing whatever it takes Who are we doing this for? 7

©2003 Prism Venture Partners What’s the Problem? Concepts don’t sell - products do Products need concepts.. Understandable Compelling Nice-to-have or Need-to-have? Successive refinement – The road to quality, customer satisfaction 8

©2003 Prism Venture Partners Who is the Customer? Getting to the right people Decision-makers vs. recommenders Sell high, sell low Listen, spec, implement, repeat Understanding the market – one customer at a time… Disruptive technologies, disruptive economics First product success is critical – follow-on products can be incremental 9

©2003 Prism Venture Partners Challenges and Opportunities Good people are essential – spread the risk! Solutions are yours, problems are your customers Competition – makes you better! Investors – essential business partners 10

©2003 Prism Venture Partners Before the Money Assemble the core team Understand the customer benefits of using your product Communicate with your constituents Customers Employees Investors 11

©2003 Prism Venture Partners Getting Funded Selling to your investors Eyes on the prize – make your objectives clear Execution matters! Make your plan – and exceed it when possible 12

©2003 Prism Venture Partners Now What? “You or your successors will be successful” “There are only three possible outcomes to a startup situation.. two of them are acceptable, the third is not” “Sales covers up a multitude of sins” “Startups are about only two things: products and sales” “Valuation doesn’t matter..so let’s use mine” 13

©2003 Prism Venture Partners Thank You!

©2003 Prism Venture Partners October.2003 Michigan State University