Vanderbilt Engineering Presentation For: Dr. Paul King

Background zEarly days: Small time-Mississippi Public Schools zEducation: Engineering-MSU/MBA-Florida zNASA-launch operations, shuttle experiments ( ) zMedical device company founder-Endius, Inc. Boston, MA Spine/Ortho market ( ) z13 Electro-chemical and surgical device patents zVenture Capital-Harbert Management Corp. ( ) z Discovery Healthcare LLC, President (2004- present) Boards: Alabama I/T Assoc. - Chairman B’ham Venture Club - President B’ham Entrepreneurial Center TechBirmingham Awarix Corp (wireless spin out) zPublication: Launch Fever March, 03

Who am I? Try to figure out early on if you are an entrepreneur, large cap corporate, small cap corporate, small business owner, artist, civil servant or teacher. “All good things come to him who waits...” Civil Servant Entrepreneur Small Cap Corporate

Starts with an idea and a prototype

“Fastest growing private spine company.” “ The leader in endoscopic spinal fusion.” WSJ 10/02 The dogs finally ate the dog food.

Suggestions It is OK to be confused. Don’t take yourself too serious. What do you really want to do and what are your strengths. Success is more an issue of trial and error. Don’t let others put you in a box. Cultural fit is crucial. Location, Location.. You are only as good as your network.

Follow your Passion. (If you don’t have one, find one.) Try to get as close to your dream as possible.

Be all you can be. Never let your past define or direct your future.

Reality The company’s value is: 20% Seasoned management 20% Market and timing 20% Ability to work as a team 20% Pure stupid blind luck 15% Marketing expertise 5% The Technology (yet a vital part)

The Basic Requirements (for a Wall Street/Venture Capital type company) Total market size: $900MM-$2B Your share minimum: $50MM-$100MM Full time, committed principles. Seasoned (“done one”) management preferred. Solves big problems ideally in IT or Life Sciences. Can build long term relationships with VC. Able to evolve and change. Deal can exit in 4-7 years. If you answered No to most of these you can still grow a company and sell it for real money.

Seven reasons VCs Turn Down Biotech Ventures: Poor Management Undifferentiated Technology Small Markets Unrealistic Valuation Expectations Doesn’t Fit Investment Criteria No one willing to quit her/his day job once they get funding. Founder doesn’t listen

Personal Satisfaction Try not to let financial reward be a key driver in your decision process. It is a little about “having it” and a lot about “doing it.”

Opportunities Three or four big opportunities will come in your career. Look and be ready for them. Be open to change. (e.g. aerospace guy selling purses.)

Approaches Act as a free agent. Employ multiple streams of income to diversify your revenue. Pick a career path and grow with the company and a rising tide.

Factors to Financial/Job Satisfaction Average should be more than say 60% to remain in job. Average = 58% (time for change)

SECTORIRRUPSIDE (NET WORTH) Corporate job, investing wisely10%$1-2 million Venture capitalist large variance $1-100 million Corporate job, executive large variance$3-50 million Residential real-estate rental property 14% $1-5 million Commercial Real-estate rental property15-20%$1-8 million Resort real-estate rental property15%-18% $2-10 million Owner of small business20-30%single digit millions Oil and Gas ownership 30-40%double digit millions Founder of technology company75%+$ millions Founder of public company1000%+hundreds of millions Where is the Money?