Innovation, Startups, Life

Amit Shah

What is Venture Funding?

Riskiest money: Equity without security

Money that your relatives will not lend you

A bank lends when you dont need it

Types of Venture fund

Seed

Like the individual / team

Early

When it is a concept: Mid

Product ready; some customers interested

Late stage funds

In revenue; need money for expansion

Artiman: Investors & Entrepreneurs

U.S. Investment Team Amit Shah Yatin Mundkur Tom Dennedy Akhil Saklecha Ajit Singh Tim Wilson

India Team M. J. Aravind Ramesh Radhakrishnan

US Operations Team Ida Ng

EIR Frank Thibodeau Adam De La Zerda Mahmood Panjwani Atul Sharan

Venture Investing Experience

Collectively managing $900+M invested in 140+ seed/earlystage companies

88 exits with aggregate realized return of 3.3x

11 IPOs and 32 acquisitions

Entrepreneurial Experience

Co-founded 10 startups in the U.S. and India

6 successful exits with aggregate value of > $1 Billion

ZeitNet, PipeLinks, Equator, Daksh, Ross, Kaleida, Clarity, Airgo, BioImagene

Operating Experience - public and private

Cisco, Rockwell, Siemens, AMD, AT&T, Lucent, Cabletron, Digital Island, FireEye, Airgo, Clarity Wireless, Adaptive, Compaq, Qualcomm, HP

Technology Background

Played pioneering roles in seminal industries: Server Computing, Networking, Voice over IP, IPTV, Digital Consumer Electronics

26 US patents

Concept and Early Stage World class entrepreneurs with ideas

Lower cost basis, providing significant ownership

Ability to impact company strategy

White Spaces Potential to dominate markets

No identifiable competition, with at least a 12-month lead on technology or market

Lower execution risk and outsized returns

Scalable Business Models

Develop technologies cost effectively

Scale the business efficiently

Fundamentally change economics of target sectors

Leverage India

Long-standing network and deep deal flow

Same disciplined screen as in Silicon Valley

To build companies that cannot be built in the US BioImagene, Guavus, Cellworks

4

Investment Strategy

Innovation

Best ideas have come from outside industry

Intersect expertise in one market with another

Think out of the box

Do NOT be a hammer in search of a nail

- Intersection of experience, market understanding, ability to

Execute

Is it a business?

Feature, Product or Company?

Artiman: Focus on Disruption

BioImagene (Acquired by Roche) Changing Standard of Care in Pathology

Cellworks (www.cellworksgroup.com)

Designing drugs the way computer chips are designed

Aditazz (www.aditazz.com) Designing & building Facilities the way computer chips are

designed and fabricated

Zspace (www.zspace.com)

Non-invasive testing for Cardio-vascular diseases

Invensense (www.invensense.com) Motion Processing for consumer devices

Prysm (www.prysm.com) First American TV company in 30 years

Why? O Why a startup?

The trigger for doing a startup

My boss sucks; I dont like my job;

He/she made it; why cant I?

Always wanted to do a startup

Caution:

Not sexy; most likely foolhardy

Very, very hard work with incredible ups/downs

Enjoyment is in hindsight

Still want to do a startup?

Create a Business Plan

Not an excel spreadsheet or a word document or a powerpoint presentation

An innate and clear understanding of what you are going after

Remember:

if it is in the press it is too late

Truly understand the market dynamics

The Money

Most businesses should not raise venture money

Do you really know why and how much money you need?

Who do you raise it from?

- Customers, partners, friends and family, angels, VCs

- Government (Darpa, SBIC,)

The VCs

They are evil; dumb; do not understand my business; trying to screw me;

- All true

- No different than a marriage

How well do you know the person?

- Look beyond the sexy early days and to the

fat middle age and can you live with it?

- Ecosystem

Finally

Actually doing a startup

Phases

Primordial

Middle Ages

Industrial Revolution

Deliverance

Primordial

Concept

Early fools

Extreme Energy

Some lucidity

Middle Ages

Newer Skeptics & converts

Energy / focus correlation

Outside thoughts

Confusion

Industrial Revolution

Scale

Technology ready for customers

Sales and Marketing starts ramping

Internal Challenges

Job function confusion (mix of newer v/s older employees)

Communications

Hallway conversations dont work

Processes (unfortunately) needed

Fallout

People dissatisfaction

Inability to scale

Some dont make it thru transition

Deliverance

Customer interaction starts Initially Skepticism

Goes to piddly stuff

Some more selling and it becomes maybe

If persistence, the customer converts

Start-Up Check List

Establish business entity

Engage a lawyer/be cautious going solo with online resources

Corporation is the entity of choice if you plan to raise money for the business

Establish initial ownership of company with co-founders

Fed/State registration, business license and permits

Secure Key Personnel

As shareholders, consultants or employees

Start-Up Check List (cont.)

Secure work space

Clean up the garage, lease an office, come to Artiman

Open bank account

Obtain necessary insurance

Workmens comp

Medical

Liability

Implement Accounting System

Popular Quickbooks is adequate

Select payroll vendor (Paychex, ADP)

Business is Never as Planned

You will have to Refine your Business Plan

Annual Strategy Plan

Annual Operating Plan

Annual Financial Budgets

Artiman Tool Kit

www.artiman.com/startup-toolkit

Templates and sample documents covering:

Annual Operating Plans

Board Meetings

Financial

Human Resource

Legal

Artiman Tool Kit Index

Artiman Tool Kit Index Artiman Tool Kit Index

Description Format Description Format

1 AOP1 AOP Time Line Graphic Illustration PPT 21 HR2 Form of Offer Letter Word

2 AOP2 Sample AOP Time Line Excel 22 HR2.1 Form of Empl, Conf. Inf. and Inv. Assign. Agt Word

3 AOP3 Sample AOP PPT 23 HR3 New Hire Check List Excel

4 AOP4 Product Planning Template Word 24 HR4 Separation Release Letter Word

5 AOP5 Sample Project Responsibility Owners Word 25 HR5 EE Termination Check List PDF

6 Board1 Key Examples of Information for Board Meeting Excel 26 HR6 90 Day New Hire Review Form Word

7 Board2 Sample Board Package PPT 27 HR7 Employee Self-Evaluation Form Word

8 Board3 Action Item Template Excel 28 HR8 Performance Eval and Career Dev Form Word

9 Board4 Sample Board Consent by Email Word 29 HR9 Staff Empowerment Article Word

10 Board5 Sample Board Indemnification Agreement Word 30 HR10 Consultant Agreement Word

11 Board6 10 Immutable Rules for Exec Presentation PDF 31 Legal1 Sample VC Term Sheet Word

12 Fin1 Financial Package Excel 32 Legal2 Sample Non-Disclosure Agreement Word

13 Fin2 Company Cap Table Excel 33 Legal3 Sample Note & Warrant Purchase Agrmt Word

14 Fin3 Expense Report Template Excel 34 Legal4 Sample Note Word

15 Fin4 Insurance & Benefits Cost Schedule Excel 35 Legal5 Sample Warrant Agreement Word

16 Fin5 Sample Cash Investment Policy Word 36 Legal6 Sample Mgt Rights Agreement Word

17 Fin6 Sample Fixed Asset Capitalization Policy Word 37 Legal7 Form University License Term Sheet Word

18 Fin7 Sample Travel & Expense Reimbursement Policy Word 38 Legal8 Document Creation/Retention Review PPT

19 HR1 Sample Employee Handbook & Policies Word 39 Legal9 Fenwick Start-up Legal Resource Presto PDF

20 HR1.1 Sample Company Handbook Word