This presentation by Amit Shah shares his insights on venture funding; Artiman reviews their focus on disruption and the stages in the lifecycle of a startup company. He describes the reasons for a start up as well as the different phases in the lifecycle of the start up.
2. What is Venture Funding?
โข Riskiest money: Equity without security
โ Money that your relatives will not lend you
โ A bank lends when you donโt need it
โข Types of Venture fund
โ Seed
โข Like the individual / team
โ Early
โข When it is a concept: Mid
โข Product ready; some customers interested
โ Late stage funds
โข In revenue; need money for expansion
3. 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
โ Collectively managing $900+M invested in 140+ seed/earlyโstage companies
โ 88 exits with aggregate realized return of 3.3x
โ 11 IPOโs and 32 acquisitions
Entrepreneurial Experience
โ Co-founded 10 startups in the U.S. and India
โ 6 successful exits with aggregate value of > $1 Billion
โข ZeitNet, PipeLinks, Equator, Daksh, Ross, Kaleida, Clarity, Airgo,
BioImagene
Operating Experience - public and private
โ Cisco, Rockwell, Siemens, AMD, AT&T, Lucent, Cabletron, Digital Island,
FireEye, Airgo, Clarity Wireless, Adaptive, Compaq, Qualcomm, HP
Technology Background
โ Played pioneering roles in seminal industries: Server Computing, Networking,
Voice over IP, IPTV, Digital Consumer Electronics
โ 26 US patents
4. 4
Investment Strategy
โConceptโ and Early Stage
โ World class โentrepreneurs with ideasโ
โ Lower cost basis, providing significant ownership
โ Ability to impact company strategy
โWhite Spacesโ
โ Potential to dominate markets
โ No identifiable competition, with at least a 12-month lead on technology or market
โ Lower execution risk and outsized returns
Scalable Business Models
โ Develop technologies cost effectively
โ Scale the business efficiently
โ Fundamentally change economics of target sectors
Leverage India
โ Long-standing network and deep deal flow
โ Same disciplined screen as in Silicon Valley
โ To build companies that cannot be built in the US โ BioImagene, Guavus, Cellworks
5. Innovation
โBest ideas have come from outside industryโ
Intersect expertise in one market with another
โ Think out of the box
โ Do NOT be a hammer in search of a nail
- Intersection of experience, market understanding, ability to
Execute
Is it a business?
โ Feature, Product or Company?
6. Artiman: Focus on Disruption
โข BioImagene (Acquired by Roche)
โข Changing Standard of Care in Pathology
โข Cellworks (www.cellworksgroup.com)
โข Designing drugs the way computer chips are designed
โข Aditazz (www.aditazz.com)
โข Designing & building Facilities the way computer chips are
designed and fabricated
โข Zspace (www.zspace.com)
โข Non-invasive testing for Cardio-vascular diseases
โข Invensense (www.invensense.com)
โข Motion Processing for consumer devices
โข Prysm (www.prysm.com)
โข First American TV company in 30 years
7. Why? O Why a startup?
The trigger for doing a startup
โ My boss sucks; I donโt like my job;
โ He/she made it; why canโt I?
โ Always wanted to do a startup
Caution:
โ Not sexy; most likely foolhardy
โ Very, very hard work with incredible ups/downs
โ Enjoyment is in hindsight
8. Still want to do a startup?
โ Create a Business Plan
โ Not an excel spreadsheet or a word document or a
powerpoint presentation
โ An innate and clear understanding of what you are
going after
โ Remember:
if it is in the press it is too late
โ Truly understand the market dynamics
9. The Money
โข Most businesses should not raise venture money
โข Do you really know why and how much money you
need?
โข Who do you raise it from?
- Customers, partners, friends and family, angels,
VCs
- Government (Darpa, SBIC,โฆ)
10. The VCs
โข โThey are evil; dumb; do not understand
my business; trying to screw me; โฆโ
- 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
14. Industrial Revolution
โข Scale
โข Technology ready for customers
โข Sales and Marketing starts ramping
โข Internal Challenges
โ Job function confusion (mix of newer v/s older employees)
โ Communications
โข Hallway conversations donโt work
โข Processes (unfortunately) needed
โ Fallout
โข People dissatisfaction
โข Inability to scale
โข Some donโt make it thru transition
15. Deliverance
โข Customer interaction starts
โ Initially Skepticism
โ Goes to โpiddly stuffโ
โ Some more selling and it becomes โmaybeโ
โ If persistence, the customer โconvertsโ
16. Start-Up Check List
โข Establish business entity
โ Engage a lawyer/be cautious going solo with online
resources
โ Corporation is the entity of choice if you plan to raise
money for the business
โ Establish initial ownership of company with co-
founders
โ Fed/State registration, business license and permits
โข Secure Key Personnel
โ As shareholders, consultants or employees
17. Start-Up Check List (cont.)
โข Secure work space
โ Clean up the garage, lease an office, come to Artiman
โข Open bank account
โข Obtain necessary insurance
โ Workmenโs comp
โ Medical
โ Liability
โข Implement Accounting System
โ Popular Quickbooks is adequate
โ Select payroll vendor (Paychex, ADP)
18. Business is Never as Planned
โข You will have to Refine your Business Plan
โ Annual Strategy Plan
โ Annual Operating Plan
โ Annual Financial Budgets
20. 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