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 24 th : Final Exam: “Virtual VC” training: –9 projects with 15 minutes to present their Investor Pitch (12’ hard stop) –Virtual VCs (class students & industry experts) invest their virtual $ –Sunday July 15 th, 12noon – 15:00, Bldg. 37 Auditorium (#202) Final Files Submission: Monday Jul. 9 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.6: Reference Checking Goals: Consistency & Complete Picture boss/peer/report Good Questions: –What contributions did Candidate make to the organization? –What are Candidate’s specific skills? –What is Candidate best/worst at? –Would you hire/work-for Candidate again? –Should I speak with anyone else about Candidate? Unsolicited References (cold calls into previous organizations; ask operator to connect to folks who…)

7. בסד Privacy Restored.™ 6 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Ch.6: CS Angle / Personal Experience “Managing Programmers = Herding Cats”, check: –Programming languages/tool sets –Work group experience vs. Lone Ranger style –Ego… (High $$  High Ego  Low Cooperation Capabilities) Don’t mix business (conditional giving) with family (unconditional giving) Hiring is very hard to do Intellectually; find someone in your organization with a good & tested Gut Radar…

8. בסד Privacy Restored.™ 7 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact Research@ASTAV.net for pricing. Ch.6: Final Wisdom Since recruiting is so difficult to do right, plan for failure! Set up an initial trial period (e.g. 90 days) upfront. Review performance – on both sides… Adjust if needed & possible, terminate otherwise. And: Don’t assume you’re ever done: recruiting – in both directions – must be done every day… (and that’s true in both business & family relationships…)

9. בסד Privacy Restored.™ 8 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.

10. בסד Privacy Restored.™ 9 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…

11. בסד Privacy Restored.™ 10 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)

12. בסד Privacy Restored.™ 11 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

13. בסד Privacy Restored.™ 12 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!

14. בסד Privacy Restored.™ 13 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?)

15. בסד Privacy Restored.™ 14 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…)

16. בסד Privacy Restored.™ 15 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…)