1. .......................................................... 0 ©2003 Prism Venture Partners October.2003 Michigan State University

2. .......................................................... 1 ©2003 Prism Venture Partners Behind the Music: Real Life in a Startup William M. Seifert General Partner Prism Venture Partners

3. .......................................................... 2 ©2003 Prism Venture Partners “Nothing happens....unless first a dream” - Carl Sandburg..until somebody sells something” - William McGowan 2

4. .......................................................... 3 ©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, 1971-1979 Microprocessor systems engineer, Los Alamos National Lab, 1975-1979 Systems Engineer, Digital Equipment Corp., 1979-1981 Founder, Utility Infielder, Interlan, Inc., 1981-1985 Founder, Chief Technical Officer, Wellfleet Communications, 1986-1991 Founder, CEO, Agile Networks, 1991-1997 (acquired by Lucent, 1996) General Partner, Prism Venture Partners, 1998-present 3

5. .......................................................... 4 ©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

6. .......................................................... 5 ©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

7. .......................................................... 6 ©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

8. .......................................................... 7 ©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

9. .......................................................... 8 ©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

10. .......................................................... 9 ©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

11. .......................................................... 10 ©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

12. .......................................................... 11 ©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

13. .......................................................... 12 ©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

14. .......................................................... 13 ©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

15. .......................................................... 14 ©2003 Prism Venture Partners Thank You!

16. .......................................................... 15 ©2003 Prism Venture Partners October.2003 Michigan State University