2963375

Fall 2010

Andrew J. Sherman, Esq.Jones Day

51 Louisiana Avenue, N.W.Washington, D.C. 20001

202-879-3686

ASBDC Technology CounselorsCertification – Prep Session #2

August 5, 2010

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Andrew J. Sherman – Today’s Moderator

Mr. Sherman is a partner in the Washington, D.C. office of Jones Day with over 2,400 lawyers worldwide.

He is the author of 17 books on business growth, capital formation and the leveraging of intellectual property. His eighteenth (18th) book, Road Rules Be the Truck. Not the Squirrel. (http://www.bethetruck.com) is an inspirational book which was published in the Fall of 2008. He has appeared as a guest and a commentator on all of the major television networks as well as CNBC’s “Power Lunch,” CNN’s “Day Watch,” CNNfn’s “For Entrepreneurs Only,” USA Network’s “First Business,” and Bloomberg’s “Small Business Weekly.” He has appeared on numerous regional and local television broadcasts as well as national and local radio interviews for National Public Radio (NPR), Business News Network (BNN), Bloomberg Radio, AP Radio Network, Voice of America, Talk America Radio Network and the USA Radio Network, as a resource on capital formation, entrepreneurship and technology development.

He has served as a top-rated Adjunct Professor in the Masters of Business Administration (MBA) programs at the University of Maryland for 22 years and at Georgetown University for 14 years where he teaches courses on business growth strategy.

He has served as General Counsel to the Young Entrepreneurs’ Organization (YEO) since 1987. In 2003, Fortune magazine named him one of the Top Ten Minds in Entrepreneurship and in February of 2006, Inc. magazine named him one of the all-time champions and supporters of entrepreneurship.

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Topics for Today’s Call– 5 Minute Recap from June 9th Prep Session– Section Takeaway Reviews– 45 Minute Q&A– Exam Overview / Process– 5 Minute Summary

Section Takeaways for the Exam – Emerging and Technology Trends

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For instance:Imagine that the exam’s case studies and essay questions will seek your input on the impact of a new technology application to one of the ASBDC clients and their product development:

What practical and strategic advice will you offer that can yield a positive result for your client? Be able to support your approach…

Cleantech trend #’s 1, 8, 9 & 10 are worth further analysis for the exam.Emerging trend #’s 1,4,5 & 7 are worth further analysis for the exam.

The meaning of “worth further analysis” is to know the basic goals behind the technology…

Clean Tech Trends1. Private capital growth recovers, record fund year (cleantech outpaced software and biotech

private equity/VC investment in last half of 2009)

2. Clean economies become the new space race – (global engagement)

3. Electric cars take the back seat to smart mobility – (more master planning)

4. Resource constraints beyond carbon rise to the fore (metals, ores, helium & oil)

5. Commodity tradeoff debates intensify (Water-energy, land-energy, land-water, carbon-water)

6. Energy efficiency, driven by ICT (Information Communication Technology), driving greater productivity

7. Marketing suddenly matters (cogent value propositions be a key differentiator)

8. Buffett leads the super rich into cleantech (GE, BYD – Chinese electric car maker and Burlington Northern Santa Fe – low carbon footprint transporter)

9. Acquisitions and consolidations accelerate (Wind and solar in China and Germany) (Panasonic acquisition of Sanyo – solar cells and EV battery maker)

10. The rise of waste-to-energy, geothermal and aquaculture applications will grow

Insights Attributed to: Nicholas Parker, Executive Chairman, Cleantech Group

Section Takeaways for the Exam – Opportunity and Viability Analysis

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For instance:Imagine that the exam’s case studies and essay questions will seek your input on an entrepreneur’s dilemma – should they take the plunge and start a company or not.

Your analysis, based on exam provided criteria will need to be supported. The framework for such support will come from the topics in this section.

Section Takeaways for the Exam – Preparing the Business Plan

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For instance:Imagine that the exam’s case studies and essay questions will seek your input on an entrepreneur’s dilemma – should they take the plunge and start a company or not.

Your analysis, based on some exam provided criteria will need to be supported. The framework for such support will come from the topics in this section.

Section Takeaways for the Exam – Sensitivity and Cash Flow Analysis

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As consultants, it is essential to be able to review, assess and counsel a client so their financial projections are in tune with reality. Too many times overly optimistic financial projections yield severe business dilemmas for the entrepreneur.

For instance:Imagine that the exam’s case studies and essay questions will seek your review on the viability of a financial model or series of financial projection assumptions. Assume that while you can never have too much information, you at some point will need to advise your client of the viability based on what you have in front of you.

Your analysis, based on some exam provided criteria will need to be supported. The framework for such support will come from the topics in this section.

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Ten Questions All Types of Investors AskLeaders of Growing Companies

• How much can I make?• How much can I lose?• What is my exit strategy from this deal?• Who else says this deal is viable? (Risk mitigation/credibility)• Does the founder (and others) already have resources at risk? (Skin in the game)• What other value (beyond money) can I bring to the table?• Can I trust this management team?• Is this company’s target market large, growing (not stagnant or shrinking), and

reachable?• Does the company have (or will it have) a sustainable competitive advantage – as a

result of either operational effectiveness or its strategic positioning or its intellectual capital or other barriers to entry?

• Is the company’s business, revenue, and profit model credible, verifiable, efficient, and sustainable?

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Section Takeaways for the Exam –Capital Formation Strategies

As advisors, it is critical to understand how and why early stage technology companies need capital for growth and the advantages and disadvantages of each capital formation strategy.For Instance:The exam is likely to ask you for recommendations to clients in this area, matching the force of capital with the proposed allocation of proceeds.

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Section Takeaways for the Exam –Intellectual Property

Virtually all technology companies are driven by one or more varieties of intellectual capital, some of which is eligible for protection under various intellectual property law strategies.For Instance:Although you are not expected to be a lawyer per se, as a certified technology counsellor, you need to be able to recognize intellectual property law issues and challenges and direct clients to the appropriate resources.

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Section Takeaways for the Exam – Technology Commercialization Strategies

Many entrepreneurial (and especially inventors) will have the skill sets to build a product, but may be lacking the expertise to develop strategies for bringing their products to the marketplace, either alone or with a partner.For Instance:The exam may ask you to help a client formulate a technology commercialization strategy – once the product and its target market are clearly identified.

The Exam StructureBelow is the structure for the 2008 Examination for Cohort #1 in

Chicago.• Multiple Choice – 32 Questions worth ½ point each – 16% of exam

total• Short Essay – 3 Questions worth 8 points each – 24% of exam total• Case Studies – 2 Questions worth 30 points each – 60% of exam

total• We will utilize a very similar approach for this examination.• The examination style reflects real world situations and a “from the

trenches” approach.• The case studies and short essays especially focus on the “what

would you suggest as their advisor” approach.

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The Exam Structure (cont’d)The goal of the exam is to learn if your counseling ability and

application of core knowledge is primed for client application.That is why the vast majority of the test is based on what you write,

and how convincingly you write it.Supporting your positions is key. Even if we disagree with the

approach, your interpretation and ability to support it is what matters.

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The Exam ProcessIn 2008 the exam was all handwritten over a four hour period. In 2010, the exam will be given at a test center and will be electronic. The testing software will be ExamView and will be comprised of two

sections.• The multiple choice section will be its own independent section• The short essay and case study areas will be typed in to a computer

and submitted at the end of the test.

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