1. Notre Dame Business Plan Competitions Training Session Jim Larkin-Bootstrap Financing 1/24/2007

2. 2 Agenda  Jim Larkin Presentation  Future Training Sessions  For Semifinalists –Resources including mentors –Second Round Submission Details

3. 3 Jim Larkin IrishAngels network member Co-founded Environmental Health Laboratories (EHL) Developed EHL from a start-up to a 112-person company making $10 million per year EHL became recognized as the Nation’s Drinking Water Laboratory President, Scientific Methods Inc (SMI) Founded the company in 2003 SMI has won five Small Business Innovative Research grants from the federal government to develop new products Competition judge and mentor, 2001 – present

4. Bootstrapping Your New Venture Jim Larkin President Scientific Methods Inc. January 24, 2007

5. 5 Three Step Plan vsTwo Step Plan 1. “I have a great idea” 2. “I’ll raise money” 3. “Then I’ll service my customer” 1. “I have a great idea” 2. “I’ll service my customer”

6. 6 Conventional Sources of Funding Exist Your savings Family Friends Fools (Angels?) Small Business Administration loans Banks (Second Mortgage) Equipment leases Angels

7. Bootstrapping Your New Venture Holes that I have stepped in Rocks that I have stepped on

8. “Thumbing Your Nose at the VC”

9. 9 First Big Hole: Raising Capital Goal raise $100k

10. 10 Big Hole #1: Raising Capital Goal raise $100k Go to lawyer Spend $9k

11. 11 Big Hole #1: Raising Capital Goal raise $100k Go to lawyer Spend $9k Go to friends, family and foolsRaise $11k Net $2k

12. 12 Big Hole #1: Raising Capital Goal raise $100k Go to lawyer Spend $9k Go to friends, family and foolsRaise $11k Net $2k Buy back $42k

13. 13 Mistake 1: Thinking conventional We were naïve We could not raise capital We waste time, money chasing money We thought we needed capital.

14. 14 Don’t Think Conventional Thoughts BSLearn the rules MSLearn the exceptions PhDThink new thoughts

15. 15 Don’t Think Conventional Thoughts Big CompanyUse the rules MediumLearn the exceptions SmallThink new thoughts

16. 16 Don’t Think Conventional Thoughts There ain’t no rules around here! We’re trying to accomplish something! --Thomas Edison SmallThink new thoughts

17. 17 Mistake 2: Thinking we needed Capital

18. 18 Mistake 2a: Thinking we needed Capital Too much money can be a bad thing!

19. 19 Mistake 2a: Thinking we needed Capital Too much money can be a bad thing! With money you spend it before the Universe speaks Usually you waste it on what YOU think customers want.

20. 20 Mistake 2: Thinking we needed Capital NEVER fund your new venture ALWAYS fuel your new venture Resources and energy

21. 21 Mistake 2: Thinking we needed Capital NEVER fund your new venture ALWAYS fuel your new venture Resources and energy “Extraordinary claims require extraordinary proof” --John Glenn

22. 22 Proofs Environmental Health Laboratories

23. 23 Seek revenue, NOT funding Environmental Health Laboratories

24. 24 Proofs (that you don’t need money) As a start up gots $500k in reagents Pay no rent-->Lab space for stock --> Tattoo parlor New laboratory equipment ($200k) $144k worth of free instruments

25. 25 Proofs $144k worth of free instruments

26. 26 Work with the coin-of the-realm! $500k in reagents Nearly no cost Lab space for stock Store was empty New laboratory equipment Client feedback $144k of instruments Relief of boredom

27. 27 Partner, Partner, Partner! Financial support from: Your spouse Your business partners Your corporate partners Your landlord Your lawyer Your accountant Your vendors Your customers (e.g. Syva)

28. 28 Proof What would it cost to get … 10 liters of specialty chemical made

29. 29 Proof What would it cost to get … 10 liters of specialty chemical made … on a Sunday

30. 30 Proof What would it cost to get … 10 liters of specialty chemical made … on a Sunday … by a PhD chemist

31. 31 Proof What would it cost to get … 10 liters of specialty chemical made … on a Sunday … by a PhD chemist … who owns the patent on the chemicals

32. 32 Proof What would it cost to get … 10 liters of specialty chemical made … on a Sunday … by a PhD chemist … who owns the patent of the chemicals … who doesn’t need the money

33. 33 Proof What would it cost to get … 10 liters of specialty chemical made … on a Sunday … by a PhD chemist … who owns the patent of the chemicals … who doesn’t need the money … is 67 years old and has major health problems

34. 34 Proof What would it cost to get … 10 liters of specialty chemical made … on a Sunday … by a PhD chemist … who owns the patent of the chemicals … who doesn’t need the money … is 67 years old and has major health problems … who owns his own company

35. 35 Partner, Partner, Partner! What would it cost to get … 10 liters of specialty chemical made … on a Sunday … by a PhD chemist … who owns the patent of the chemicals … who doesn’t need the money … is 67 years old and has major health problems … who owns his own company Answer: No money!

36. 36 Choose you business partner carefully! Get a $100,000 talent for little no money Double your effort Acquire skill sets you need Stock is the coin of your realm

37. Thumb Your Nose at the VC!

38. 38 Upcoming Events January 31 st – Making it to the Finals: Advice from a Competition Judge Speaker: Dave Brenner 7:00pm, Room 131 DeBartolo February 7 th – Business Models: The Assumptions that Drive the Numbers Speaker: Dan Dykens 7:00pm, Room 131 DeBartolo April 20 th – Final Events Venture Fair 10:30am-12:30pm Giovanini Commons, Mendoza Final Event 1:30pm-4:00pm Jordan Auditorium, Mendoza

39. 39 Helpful Resources  First Round judges feedback and contact opportunities  Mentors  Participants Area for Competition: –http://gigot.nd.edu  Business Plan Pro software

40. 40 Second Round Submission Requirements February 23 rd – Second Round Submission Deadline Submission Components: 10 – 15 slide PowerPoint presentation Business Plan: Plan not to exceed 25 pages with no more than 15 pages of appendices (40 page maximum submission) Submission Guidelines posted at http://gigot.nd.edu

41. 41 Next Steps Review first round evaluations and make contact with judges who provided contact information Make contact with your mentor early and often Prepare your second round submissions Contact Theresa Sedlack or Melissa Paulsen with any questions or additional competition support needs -tsedlack@nd.edu; 574.631.3809 -paulsen.5@nd.edu; 574.631.7568