2. בסד Privacy Restored.™ 1 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. RESEARCH CONSULTING Entrepreneurial Computer Science Yonah Alexandre Bronstein, PhD alex_bronstein@ieee.org Session 9

3. בסד Privacy Restored.™ 2 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Session Outline Administrative Stuff Homework Check… 5 yr Rev/Exp Projection? Chapter 7: Art of Raising Capital – Part 1

4. בסד Privacy Restored.™ 3 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Administrative Stuff Schedule: Mainsoft CEO “ a real Israeli start-up” on Jun 23 rd : Final Exam: “Virtual VC” training: –9-11 projects with 15 minutes to present their Investor Pitch (10’ hard stop) –Virtual VCs (class students & industry experts) invest their virtual $ –Sunday July 28 th, 12noon – 16:00, Bldg. 37 Auditorium (#202) Final Files Submission: Wednesday Jul. 17 th, midnight. –So we can print a booklet of all Executive Summaries –So there is time for a final feedback from me before the show…

5. בסד Privacy Restored.™ 4 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Homework Check… $ is the  “idea” & “business” 5 Year Revenue/Expense Projections, with a Business- person’s help… Students’ turn?

6. בסד Privacy Restored.™ 5 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Ch.7: Raising Capital Gist: Can raise $ from: –Venture Capitalists (“VC”) –Angels –Foundations –Government Entities –F 3 : Family, Friends, Fools Good pitch is necessary, but not sufficient: need to build something meaningful, long-lasting & valuable.

7. בסד Privacy Restored.™ 6 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Ch.7: Get an “Intro” Intro = “This is so-and-so and I think you should…” “Cold call” ok to try, but at the risk of quick dismissal. (G.K. story: “a friend told a friend who told an associate who told a partner not to bother looking at a company.”) From whom? Anyone with credibility with investor: –Current investors –$ Professionals (lawyers, accountants) –Other entrepreneurs –Professors…

8. בסד Privacy Restored.™ 7 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Ch.7: Show “Traction” Traction = Tire grips the road and moves car forward. “Sales” really But not necessarily measured in $$: –Enrollment (if membership model applies) –Visitors (websites, museums, …) –Field tests (action) –Agreements to test or pilot (written words) –References from potential customers (oral words)

9. בסד Privacy Restored.™ 8 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Ch.7: Personal Experience ASTAV raised funds (and motivated workers) for a couple of years based on one quote: “I spoke with Tim Sutton, our CEO, and he believes that the technology could be a benefit to Positive's service portfolio. I continue to think the idea sounds valuable, and we would likely add support as soon as it became available.” – Steve Dispensa, co-founder & CTO, Positive Networks

10. בסד Privacy Restored.™ 9 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Ch.7: Investor Funnel Business Plans life in Investors’ hands: 2000 enter through all the doors (email, website, friends) 200 are moderately credible (from executive summary) 100 are interesting enough to read (the whole plan) 40 get thoroughly investigated (“due diligence”) 10 get funded (one or more times) 1 makes $$$ Game: avoid being eliminated!

11. בסד Privacy Restored.™ 10 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Ch.7: Clean Up Your Act Intellectual Property (Who really owns the idea? Previous employer? Founder? Patent infringement?) Capital Structure (Too much stock in founders unwilling to share? Control by inflexible investor? Over/Under-priced previous rounds?) Management Team (Related co-founders? Unqualified friends in CxO positions? Criminal convictions?) Stock Offerings (Stock grants vs. options? High valuation sales to relatives? Solicitation of “unqualified” investors?) Regulatory Compliance (Nonpayment of payroll taxes, Noncompliance with country rules?)

12. בסד Privacy Restored.™ 11 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Ch.7: Disclose What Cannot Be Cleaned Up Earlier rather later, will help credibility. “Mea culpa” rather than blaming others. Previous failures are nothing to be ashamed of. “Getting up and trying again” shows that you are an entrepreneur. (Frog in the glass of milk fable…)

13. בסד Privacy Restored.™ 12 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Q & A ? Infinite Loops are OK here… For Next Session? Take in feedback from midterm Sleep on it (pray if it seems too hard ) Act on it! (without waiting till end of semester…)