From a talk I gave to the Venture Association of New Jersey about the challenges of growing a business.

1. Monmouth Venture Partners presents
Value Drivers and the
Entrepreneur’s Dilemma
to the
Frank J. Graziano
Managing Partner
September 21, 2010

2. Do you want to be rich?
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3. Or king?
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4. Achieving both is a rare exception…
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5. Here’s the reality…
“Most entrepreneurs want to make a
lot of money and run the show.
Research shows that it’s tough to
do both.”
“If you don’t figure out which matters
more to you, you could end up
being neither rich nor king.”
_ Noam Wasserman, The Founder’s Dilemma, Harvard Business Review, February 2008
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6. Some sobering facts…
• 50% of founders no longer
X X X X X
CEO 3 years after funding
• After 4 years, only 40% are X X X X X X
still in that role
• By time of IPO, less than 25% X X X X X X X X
• 4 out of 5 founding
CEOs have to be
forced out!
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7. Growing pains…
• Limits of bootstrapping
• Outside money enables faster
growth
• Loss of total control of the
business
• Investors want oversight and
seats on the board
• First steps in putting your role
as founding CEO at risk
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8. The paradox of success…
Structure
Process
Marketing Specialized
Sales Roles
Customer Managerial
Service Heirarchy
Product
Launch Finance
HR
Operations
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9. Implications for raising money…
Better Terms
Entrepreneurs v. Investors
Alignment of Interests
Control
Wealth
Worse Terms
FFFs Angels VC PE
Sources
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10. Implications for creating value…
Product
Management Market
Economics
Sales
Competition &
Marketing
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11. If your motive is…
Seek outside Use your own
investors capital (FFFs)
Raise a lot more Raise less $$$
$$$ Wealth Control overall
Hire professional Not recruit
management potential rivals
…influenced by venture’s potential
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12. Other tales from the trenches…
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13. Q&A
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14. Thank You
Frank J. Graziano
Managing Partner
Monmouth Venture Partners, LLC
(732) 930-0161
frank@fjgraziano.com
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