Dteten PE Hedgefunds

Where Are the Deals?!
Best Practices by Private Equity, Venture Capital,

and Hedge Funds in Originating Investments
Speaker:
David Teten
www.Teten.com / www.TheVirtualHandshake.com
info@teten.com, +1-917-355-5726
2008. All
Rights
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- Privileged
and and
Confidential
TetenAdvisors,
LLC
2008. All
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- Privileged
Confidential
Presentation Plan
Introduction
Traditional Deal Origination
Web 2.0
Earmarks of a Potential Investment
Growing Your Corporate Network
Next Steps
2008. All
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Reserved
- Privileged
and and
Confidential
TetenAdvisors,
LLC
2008. All
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Intro
Traditional Origination
Web 2.0
Earmarks
David Teten Biography

Currently: independent investment banker (Teten.com)
Managing Director, Evalueserve (global research and
analytics provider), through September 2008
Founder and CEO, Circle of Experts (investment research firm),
sold to Evalueserve
Founder and CEO, Teten Executive Recruiting,
sold to Accolo, #42 on the 2007 Inc. 500 list
Founder and CEO, GoldNames (domain name investment bank,
based in Israel)
Technology M&A, Bear Stearns
Lead author, The Virtual Handshake: Opening Doors and Closing Deals Online
(TheVirtualHandshake.com)
Harvard MBA, Yale BA
Contact: info@teten.com, +1-917-355-5726
Teten.com
Network
Next Steps
Intro
Web 2.0
Earmarks
Past Audiences for This Presentation
ACG Intergrowth (scheduled May 2009)

Alliance of Merger & Acquisition Advisors
Columbia Business School Alumni Club of New York
Financial Markets World Web 2.0 conference
Golden Seeds (US angel group)
Harvard Business School Club of London
Kauffman Fellows program participants
Wharton Alumni Club of Northern California
Investment banks
Private equity firms
Venture capitalists
Hedge funds
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Network
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Intro
Web 2.0
Earmarks
Network
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Background
David Teten is writing a research study on "Best Practices in Private Equity

and Venture Capital Deal Origination" for submission to the Journal of
Private Equity (an Institutional Investor publication). He will be presenting
the findings from this research in keynote talks at the 2009 national
conferences for the Association for Corporate Growth (ACG.org) and the
Alliance of M&A Advisors (amaaonline.org), and will be publishing some
related articles on this topic in other publications. David is working with
Evalueserve, a global research firm and his former employer, to conduct
this study.
These slides are a preview of the forthcoming paper.
Teten.com
Intro
Web 2.0
Earmarks
Network
Next Steps
93 Private Equity and Venture Capital Funds Interviewed

(as of Dec. 1, 2008)
India, 8
Latin
America,
15
US, 33
China, 5
Europe,
32
Teten.com
Evalueserve primary research
Presentation Plan
Introduction
Web 2.0
Next Steps
2008. All
Rights
Reserved
- Privileged
and and
Confidential
TetenAdvisors,
LLC
2008. All
Rights Reserved
- Privileged
Confidential
Intro
Web 2.0
Earmarks
Network
Next Steps
Proprietary Deal Origination for Private Equity Firms Why is it important?

Professionalization
Professionalization of
of sell-side
sell-side advisors
advisors
+
More
More sophisticated
sophisticated sellers
sellers (including
(including many
many funds)
funds)
+
Tremendous
Tremendous competition
competition among
among private
private equity
equity investors
investors
More
More Auctions
Auctions
Winners
Winners Curse
Curse
Competing
Competing for
for the
the Lowest
Lowest Return
Return
Teten.com
Intro
Web 2.0
Earmarks
Network
Proprietary Deal Origination for VC Firms Why is it important?

Lower
Lower costs
costs of
of starting
starting up
up company
company
+
Smooth,
Smooth, not
not chunky,
chunky, increasing
increasing cost
cost curve
curve of
of aa startup
startup
+
Tremendous
Tremendous competition
competition among
among VC
VC investors
investors
More
More Auctions
Auctions
Winners
Winners Curse
Curse
Competing
Competing for
for the
the Lowest
Lowest Return
Return
Teten.com
Next Steps
Intro
Web 2.0
Earmarks
Network
Next Steps
Private Equity Deal Flow by Source

%
100
8
90
80
2
17
21
25
25
24
70
28
60
35
27
50
25
Other
In-house/direct
Buy-side intermediaries
Vendor intermediaries
40
30
49
20
40
34
39
10
0
Total
Teten.com
Large funds
(Fund size >2b)
Upper mid-market
(Fund size 500m-2b)
Mid-market
(Fund size <500m)
Western European funds only. KPMG Private Equity: Insight into Deal Origination, 2005, Page 4. Vendor refers to the entity selling the equity stake. Includes uncompleted deals.
Intro
Web 2.0
Earmarks
Network
Next Steps
Sources of In-House Generated Private Equity Deals

%
100
0
9
90
15
3
13
20
10
0
7
13
80
70
14
32
20
60
14
50
20
0
13
40
22
30
Investment executives
Other
Managing partner/CEO
Existing relationship with management
Advisory board non-executives
Business development executives
27
30
20
40
28
10
23
27
0
Total
Teten.com
Large funds
(Fund size >2b)
Upper mid-market
(Fund size 500m-2b)
Mid-market
(Fund size <500m)
Western European funds only. Based on KPMG Private Equity: Insight into Deal Origination, 2005, Page 7. Includes uncompleted deals.
Intro
Web 2.0
Earmarks
Network
Next Steps
Deal Idea Flow by Type of Intermediary

%
100
3
8
90
80
10
31
25
22
29
70
Deal finders/Others
60
33
50
40
55
30
20
Accountants' corporate finance

practices
28
59
Boutique investment banks

Investment banks
37
34
10
10
0
Total
Teten.com
Large funds
(Fund size >2b)
Upper mid-market
(Fund size 500m-2b)
Mid-market
(Fund size <500m)
Western European funds only. Based on KPMG Private Equity: Insight into Deal Origination, 2005, Page 8. Includes uncompleted deals.
Intro
Web 2.0
Earmarks
Network
Next Steps
Why Private Equity Houses Get to See Deals from Vendor Intermediaries
%
100
90
2
7
14
80
70
14
Management buyin candidate

Another financial adviser
60
50
Relationship with management team

Relationship with vendor
28
Known sector expertise

Relationship with vendor's intermediary
40
30
20
35
10
0
Teten.com
Western European funds only. Based on KPMG Private Equity: Insight into Deal Origination, 2005, Page 8. Vendor refers to the entity selling the equity stake. Includes uncompleted deals.
Intro
Web 2.0
Earmarks
Network
Next Steps
Investment Search Process (# Companies)
AlliedSignal (1996-97)
Ciba-Geigy (1974)
TA Associates
(annually, as of 2006)
Profiled initially
550
18,000
NA
Targets selected
190
100
8,000
Met
NA
NA
750
Negotiated with
28
NA
NA
Detailed due diligence
17
NA
NA
Acquired/ invested
10
1 (Airwick Industries)
10-12
Acquirer/ Investor
Applied Mergers & Acquisitions, by Robert F. Bruner, Chapter 7 (draft), at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=229942.

Teten.com
TA Associates data from The Big Issue: Deal Origination, Corporate Financier, October 2006
Intro
Web 2.0
Earmarks
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Pipeline of Angel Investor Deals
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Angelsoft industry statistics. N=36257 deals.
Intro
Web 2.0
Earmarks
Network
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Number of Dedicated Deal Origination Professionals vs. Fund Size
More than 10
(n=9)
33%
6 to 10 (n=7)
43%
1 to 5 (n=16) 13%
19%
Over US$ 2bn
US$ 0.5 to 2bn
44%
22%
57%
69%
Under US$ 500m n
Fund Size
Teten.com
Evalueserve primary research
Intro
Web 2.0
Earmarks
Network
Next Steps
Does your fund have at least one person tasked specifically and
primarily with deal origination?
63%
55%
56%
63%
87%
100%
No
Yes
37%
45%
44%
37%
13%
Overall
(n=93)
Teten.com
US
(n=33)
Europe
(n=32)
India
(n=8)
Latin America
(n=15)
China
(n=5)
Evalueserve primary research. Responses for Dont Know/Cant say is excluded from the analysis. Percentages may not add up to 100 due to rounding off
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
From Warm Relationships to Ice-Cold
Teten.com
http://flickr.com/photos/jwthompson2/88090871/
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
Personal Relationships of Fund Principals

Red =
tech companies
Green =
VC firms
Blue =
service
providers
(lawyers, PR
firms, real
estate agents,
focused on
tech).
Teten.com
http://flickr.com/photos/hotrodhomepage/11103892/sizes/o//
Intro
Warm Lukewarm Ice
Reputation
Teten.com
Web 2.0
Earmarks
Network
Next Steps
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
Club Deals
West Coast Venture Capital Funds
Each tie=1 partner shared
Left cluster
includes
Sierra Capital,
Davis & Rock
Teten.com
Right cluster
includes
Kleiner
Perkins,
Crosspoint,
H&Q VC,
Institutional
Venture
Partners,
Mayfield
Asset Management Companys Genealogy Chart, 1958-83,

cited in Social Networks in Silicon Valley, Castilla, Hwang, Granovetter, and Granovetter, http://web.mit.edu/ecastill/www/publications/CastillaExtract.pdf
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
Executives
Rejected Executives
Entrepreneurs in Residence
Portfolio Executives
Welsh, Carson, Anderson & Stowe
Senior Advisor Networks
3i
Cerberus
Goldman Sachs Special Situations Group
General Atlantic
Teten.com
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
Limited Partners
All LPs
Executive Funds
Institutional Venture Partners Founders Fund
Irving Place Capital (formerly BSMB)
Teten.com
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
Intermediaries other than Investment Bankers

IPO Deals in California Information Retrieval Services Industry
Each tie=firms worked together on at least one IPO
Length of tie line inversely proportional to # IPOs worked on
Lawyers
Private Bankers
Accountants
Recruiters
Insurance brokers
University Technology
Transfer Offices
Teten.com
1999 IPO Deals from IPOData.com,

cited in Social Networks in Silicon Valley, Castilla, Hwang, Granovetter, and Granovetter, http://web.mit.edu/ecastill/www/publications/CastillaExtract.pdf
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
Speaking at Conferences
Teten.com
http://flickr.com/photos/crincon/1143195754/sizes/l/
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
Investment Bankers
Teten.com
Wall Street
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
Deal Finders/Brokers
Teten.com
Aleutian Capital
Aquillian Investments
Dinan & Company
Evalueserve
Mergermarket
Private Capital Research
Richard Vander Kaay &

Associates
Synchrony Venture
Management
Turris Group
Werner Partners
Intro
Web 2.0
Earmarks
Warm Lukewarm Ice
CEO-led Strategy
Fund
Frontenac Company
Service Providers
Cook Associates
Evalueserve
Harvey & Company
Notch Partners
Skill Capital
Teten.com
Network
Next Steps
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
Business Plan Competitions
Teten.com
http://flickr.com/photos/crincon/1143195754/sizes/l/
Intro
Web 2.0
Earmarks
Network
Next Steps
Warm Lukewarm Ice
Cold Calling
Teten.com
http://www.bbc.co.uk/northernireland/yourplaceandmine/gallerypop/a_crawford/06.shtml
Intro
Warm Lukewarm Ice
Personal Life
Teten.com
Web 2.0
Earmarks
Network
Next Steps
Intro
Warm Lukewarm Ice
Buy Stakes in Public Companies
Teten.com
Web 2.0
Earmarks
Network
Next Steps
Presentation Plan
Introduction
Web 2.0
Next Steps
2008. All
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and and
Confidential
TetenAdvisors,
LLC
2008. All
Rights Reserved
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Confidential
Intro
Web 2.0
Earmarks
Network
Next Steps
Web 2.0 is the business revolution

caused by the move to the Internet as platform,
and an attempt to understand the rules for
success on that new platform.
- Tim OReilly
Teten.com
http://en.wikipedia.org/wiki/Web_2.0, http://flickr.com/photos/oliversteiner/326174717/sizes/o/
Intro
Web 2.0
Earmarks
Network
Next Steps
Web 2.0 Meme Map
Teten.com
Tim OReilly, What is Web 2.0 www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html
Intro
Transition: Web 1.0

Parameters
Web 2.0
Earmarks
Network
Next Steps
Web 2.0
Web 1.0 (Read)
Web 2.0 (Read-Write)
Governance
Top-down
Bottom-up
Communication Channels
People to Machine
Machine to Machine and People to People
Information Discovery
Search and Browse
Publish and Subscribe
Information Retrieval
Transactional
Relationships
Information Aggregation
Portal, Commercial Aggregators
Micro-Aggregation
Marketing, Selling
Push, Contextual
Conversational, Personal
Content Control
Publishers, Aggregators
Content Authors
Content Structure
Documents, Pages
Tagged Objects
Applications
Closed, Proprietary
Open, Standard-based
Technology
HTML, Solaris, Oracle
XML, AJAX, RSS, PHP, MySQL, XQuery
Teten.com
Partially sourced from: Web 2.0 the Living Web and Putting We in the Web, Bebo White, University of San Francisco (http://www.rthk.org.hk/mediadigest/20060915_76_121128.html)
Intro
Web 2.0
Earmarks
Network
Next Steps
Private Equity Investing Cycle and Web 2.0
Private Equity Investing Cycle

Raise capital
How an Optimized Network is an Accelerator

Identify value-added potential investors and find a path to them
Solicit past investors in both your prior and comparable funds
Originate investments
Identify and efficiently reach out to relevant people and companies

Become a magnet for investment opportunities
Due diligence
Review professional and personal lives of management

Talk with participants in firms economic network: customers, competitors,
suppliers
Negotiate Investment
Gain insight into counterpartys negotiating style, motivations
Improve operations
Recruit A performers
Accelerate sales and marketing
Exit investment
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Identify strategic acquirers
Presentation Plan
Introduction
Web 2.0
Next Steps
2008. All
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LLC
2008. All
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- Privileged
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Intro
Web 2.0
Earmarks
Network
Status of CEO
Teten.com
Serial entrepreneur
Older CEO
CEO looking to retire / getting tired
CEO acknowledging his/her limits of competence
Death
Divorce
Next Steps
Intro
Web 2.0
Earmarks
Status of Major Equity Owner
Teten.com
Private equity firm in need of exit

Corporation in distress
Short-term tax incentive
Succession battle
Death
Divorce
Network
Next Steps
Intro
Web 2.0
Earmarks
Network
Next Steps
Corporate Performance: Rapid growth
Teten.com
http://flickr.com/photos/laserstars/908946494/sizes/o/
Intro
Web 2.0
Earmarks
Network
Next Steps
Corporate Performance: Underperforming
Teten.com
http://flickr.com/photos/carve/2856365431/sizes/l/
Intro
Web 2.0
Earmarks
Network
Industry/Economic Trends
Consolidation
Growth Sector (e.g., alternative energy)
Credit crunch imposing pressure
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Next Steps
Intro
Databases
Teten.com
Web 2.0
Earmarks
Network
Next Steps
Presentation Plan
Introduction
Web 2.0
Next Steps
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2008. All
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Intro
Web 2.0
Earmarks
Network
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Character Competence Relevance Strength Information Number Diversity
Firms Fail to Capitalize on Their Internal and External Networks
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Knowledge not readily searchable

Knowledge not retained when employees leave
Relationships not visible
Relationships primarily tied to colocated people
Millennials expect and embrace social technologies
Forrester Research/David Teten and Scott Allen, The Virtual Handshake: Opening Doors and Closing Deals Online (www.TheVirtualHandshake.com)
Intro
Web 2.0
Earmarks
Network
Next Steps
Corporate Network Valuation Formula

Ch = Character
Co = Your Firms Competence
R = Relevance of the contact
S = Strength of your relationship
I = Information
N = Number of people
D = Diversity
= D * (Chn*Con *Rn* Sn*In)

n=1
Teten.com
David Teten and Scott Allen, The Virtual Handshake: Opening Doors and Closing Deals Online (www.TheVirtualHandshake.com)
Intro
Web 2.0
Earmarks
Network
Biography Analysis Software
Teten.com
Next Steps
Intro
Web 2.0
Earmarks
Network
Corporate Analysis Software
Teten.com
Next Steps
Intro
Web 2.0
Earmarks
Network
Next Steps
Case study: Daniel Zumino
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Intro
Web 2.0
Earmarks
Network
Website
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Next Steps
Intro
Web 2.0
Earmarks
Network
Blogging
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Next Steps
Intro
Web 2.0
Earmarks
Network
Next Steps
Relationship Capital Management Software
Teten.com
Contact Network Corporation (ThomsonReuters)
Intro
Web 2.0
Earmarks
Network
Next Steps
Case Study: Hamilton Robinson LLC
Teten.com
Intro
Web 2.0
Earmarks
Network
Next Steps
Multiple Media
Phone
Email
Instant messaging
Internet telephony (Skype)
Web conferencing
SMS
Twitter
Teten.com
http://flickr.com/photos/re-ality/41676755/sizes/o/
Intro
Web 2.0
Earmarks
Network
Online meets Offline
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Next Steps
Intro
Web 2.0
Earmarks
Network
Next Steps
Socialtext Wiki Case Study: Dresdner Kleinwort Investment Banking
problem
problem
Heavy
Heavy dependence
dependence on
on email
email communication
communication && meetings
meetings for
for decision-making
decision-making
solution
solution
5,000
5,000 wiki
wiki users
users
Reduced
Reduced meeting
meeting times
times by
by 50%
50%
benefits
benefits
Reduced
Reduced email
email traffic
traffic by
by up
up to
to 75%
75%
Adoption
Adoption outpaced
outpaced corporate
corporate intranet
intranet usage
usage within
within six
six months
months
Wiki
Wiki today:
today: 6,000
6,000 pages
pages &
& 100,000
100,000 hits
hits per
per month
month
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Socialtext
Intro
Web 2.0
Earmarks
Network
Next Steps
Customer Relationship Management
Teten.com
http://misbridge.mccombs.utexas.edu/knowledge/topics/crm/
Intro
Web 2.0
Earmarks
Network
Blog and Web Readers
First Rain
InfoNGEN
Skygrid
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Next Steps
Intro
Web 2.0
Earmarks
Network
From Cold Calling to Warm Cold Calling
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Source of Lead
Result
Success Rate
business directories,
company listings,
company websites
Ice Cold Call
Low response rate
All of the methods

above, plus virtual
communities, blogs, job
networks, email lists,
biography analysis, etc.
Warm Cold Call
Higher response
rate
Next Steps
Intro
Web 2.0
Earmarks
Network
Fantasy Football
Teten.com
Next Steps
Intro
Web 2.0
Earmarks
Network
Gated Communities for Executives

IERGOnline.com
INMobile.org
Sermo.com
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Next Steps
Intro
Web 2.0
Earmarks
Network
Gated Communities for Investors

ValueInvestorsClub.com
Village.Albourne.com
SumZero.com
Angelsoft.net
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Next Steps
Intro
Web 2.0
Earmarks
Network
Virtual Community Platforms / Social Network Sites

Groups.Yahoo.com
Groups.Google.com
Grouply
LinkedIn
Xing
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Next Steps
Presentation Plan
Introduction
Web 2.0
Next Steps
2008. All
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- Privileged
and and
Confidential
TetenAdvisors,
LLC
2008. All
Rights Reserved
- Privileged
Confidential
Intro
Web 2.0
Earmarks
Network
Web 2.0 is a better platform
Parameters
Face-to-Face
Web 2.0
Character
Judge by a handshake
SEC filings
Competence
Personal resources
Enterprise resources
Relevance
Semi-random
Focused, searchable
Strength
Limited channels
Multi-media
Information
Poor visibility
Detailed, current data
Number
Small
Large
Diversity
Restricted by time, space
Crosses time & space
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Next Steps
Intro
Dealflow Analytics
Teten.com
Web 2.0
Earmarks
Network
Next Steps
Intro
Web 2.0
Earmarks
Network
Next Steps
Maximize Value of Fund Contact Database
Teten.com
http://flickr.com/photos/misterdna/49841409/sizes/l/
Intro
Web 2.0
Earmarks
Network
Next Steps
Maximize Value of Fund Contact Database

Goal: Increase benefit Fund receives from its global contact database, and identify new
investment opportunities in doing so.
Process:
Gather data from individual executives contact databases (e.g., Blackberry, Microsoft
Outlook) into Fund central contact database.
Request from LPs and members of Fund outside advisor network information about
their high-value contacts, e.g., CEOs of companies with over $200m in revenue.
Run contact database against multiple Internet database providers (e.g., InfoUSA, Jigsaw,
Spoke, etc.), in order to update and verify accuracy.
Call individuals on an as-needed basis to verify database accuracy.
Produce Change Reports indicating which contacts have changed jobs, since their
change in status may correlate with a new investment opportunity. E.g., an investment
banker at Bear Stearns may have moved to Citadel, and may now be interested in coinvesting with Fund on deals. The past Controller of a portfolio company may now be CFO
of another media company.
Deliverable: Accurate database of past and current relationships. Fund team can reach out
again to touch base with old clients/colleagues.
Estimated # person-minutes per updated contact: 20-40 minutes
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Intro
Web 2.0
Earmarks
Network
Next Steps
Enterprise
Solutions
Communi
cations
&
Electronics
New Investment Idea Generation
Financial
Services
Media&
Consumer
Healthcare
continuedglobalization
rapidadvancesintechnology
increasingimportanceofinformation
integration
improvedaccesstogloballabortalent
pool
populationgrowthanddemographic
changes
morefocusonenvironment/resource
use
growingmiddleclassindeveloping
economies
geopoliticaldevelopments
Teten.com
based on http://www.generalatlantic.com/en/news/article/57
Intro
Web 2.0
Earmarks
Network
Next Steps
New Investment Idea Generation

Goal: Identify companies which meet Funds investing criteria and which are likely to have an
interest in outside capital (equity or debt)
Process:
Interview Fund investment team to determine profile of ideal investments (e.g., automotive
companies experiencing cash flow difficulty).
Build database of companies which meet given criteria, e.g.:
Review global public financial filings for given financial parameters.
Look in news stories for companies reporting high levels of layoffs.
Look in obituaries for unexpected deaths of sitting CEOs.
Review private equity databases for investments which have been held for over 6
years, which the existing investors likely wish to exit.
Deliverable: Database of companies which meet Funds investing criteria, and appear to have
immediate interest in outside capital. Includes contact information for CEO of each company.
Estimated # person-minutes per lead: 60-120 minutes`
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Intro
Web 2.0
Earmarks
Network
Next Steps
Global Investment Banker Database
Teten.com
Wall Street
Intro
Web 2.0
Earmarks
Network
Next Steps
Global Investment Banker Database

Goal: Identify investment bankers worldwide who specialize in targeted niches (e.g., real
estate, defense/aerospace, etc.).
Process:
For each member of Fund investing team, obtain profiles of investment bankers who
typically provide that team member the most relevant deals.
Build exhaustive database of such investment bankers, using Bloomberg, LinkedIn,
ZoomInfo, Spoke, and other databases.
Deliverable: individualized list of investment bankers to cover for each Fund team member.
Estimated # person-minutes per banker: 15-60 minutes
Teten.com
Intro
Web 2.0
Earmarks
Network
Next Steps
Conference Attendance Optimization
Teten.com
http://flickr.com/photos/oxfam/2087484701/sizes/l/
Intro
Web 2.0
Earmarks
Network
Next Steps
Conference Attendance Optimization

Goal: Maximize ROI on conference attendance.
Process:
Fund investing team member identifies conference which he/she plans to attend.
Team member obtains list of attendees that meet given criteria, e.g., CEOs of companies
with over $200m in revenues.
Outsourced cold caller solicits all attendees secretaries, and asks, Do you have 15
minutes to meet with ----- from Fund, who will be attending the ----- conference with you?
Deliverable: Fund investing team member has packed schedule of meetings.
Estimated # person-minutes per conference attendee: 30
Teten.com
Intro
Web 2.0
Earmarks
Network
Next Steps
Recruit Senior Advisory Board Members
Teten.com
http://www.sxc.hu/photo/985516
Intro
Web 2.0
Earmarks
Network
Next Steps
Recruit Senior Advisory Board Members

Goal: Recruit senior advisors who can serve as deal originators, board members, interim
executives, consultants, and full-time executives.
Process:
Design spec: relevant industry experience; size of company led; preferred job title;
geography; compensation; etc. Many clients specifically prefer clients who are not in fulltime employment, since such individuals are highly motivated to help close a transaction
and win their next full-time role.
Team builds list of attendees that meet given criteria, particularly focusing on tracking of
news about executive movement (press releases, SEC filings, etc.).
Lead recruiter solicits candidates to evaluate their interest
Deliverable: Meeting or phone call with pre-qualified executives who meet clients demands.
Teten.com
Intro
Continuous Learning
Teten.com
Web 2.0
Earmarks
Network
Next Steps
Intro
Web 2.0
Earmarks
Network
Next Steps
Register Today For the 38th Annual ACG InterGrowth conference

May 12-14, 2009, Wynn Las Vegas, NV
ACG InterGrowth is the worlds largest dealmakers conference,
attracting more than 2,000 middle market M&A professionals.
Participants include senior private equity professionals, intermediaries, corporate
development officers, lenders, lawyers and accountants.
Keynote speakers:
Tom Donohue President and CEO, U.S. Chamber of Commerce
Newt Gingrich Former Speaker of the House
Jim McGregor Author, One Billion Customers: Doing Business in China
T. Boone Pickens Founder and Chairman, BP Capital Management
David Teten Author, The Virtual Handshake: Opening Doors and Closing Deals Online
Register here:
http://www.acg.org/ACGEvents/ACGInterGrowth/reginfo/tabid/97/Default.aspx
Teten.com
Intro
Web 2.0
Earmarks
Network
Next Steps
Alliance of Merger & Acquisition Advisors

Winter Conference, Jan. 20-22, 2009, Orlando, FL
Financing in a Changing Global Market
First Private Equity Forum: a limited number of Private

Equity Firms will showcase companies exclusively to the lower
middle market
Deal Expo: hear from deal makers about active buy/sell
engagements
Keynote Speaker: David Teten, Where are the Deals?
Private Equity Funds' Best Practices in Deal Origination
CEO, Teten Advisors; Author, The Virtual Handshake:

Opening Doors and Closing Deals Online
For Private Equity Groups - CPAs - Intermediaries Investment Bankers - Attorneys Private Bankers
Business Advisory Firms
REGISTER HERE:
http://www.amaaonline.com/2009_winter_conference
Teten.com

Best Practices by Private Equity, Venture Capital,
and Hedge Funds in Originating Investments
Speaker:
David Teten
www.Teten.com / www.TheVirtualHandshake.com
info@teten.com, +1-917-355-5726
2008. All
Rights
Reserved
- Privileged
and and
Confidential
TetenAdvisors,
LLC
2008. All
Rights Reserved
- Privileged
Confidential

Dteten PE Hedgefunds

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Where Are the Deals?!

Best Practices by Private Equity, Venture Capital,

Where Are the Deals?!

David Teten Biography

Past Audiences for This Presentation

ACG Intergrowth (scheduled May 2009)

David Teten is writing a research study on "Best Practices in Private Equity

These slides are a preview of the forthcoming paper.

93 Private Equity and Venture Capital Funds Interviewed

Evalueserve primary research

Where Are the Deals?!

Proprietary Deal Origination for Private Equity Firms Why is it important?

Proprietary Deal Origination for VC Firms Why is it important?

Private Equity Deal Flow by Source

Sources of In-House Generated Private Equity Deals

Deal Idea Flow by Type of Intermediary

Accountants' corporate finance

Boutique investment banks

Management buyin candidate

Relationship with management team

Known sector expertise

Investment Search Process (# Companies)

Detailed due diligence

Applied Mergers & Acquisitions, by Robert F. Bruner, Chapter 7 (draft), at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=229942.

Pipeline of Angel Investor Deals

Angelsoft industry statistics. N=36257 deals.

Number of Dedicated Deal Origination Professionals vs. Fund Size

Over US$ 2bn

US$ 0.5 to 2bn

Evalueserve primary research

Warm Lukewarm Ice

From Warm Relationships to Ice-Cold

Warm Lukewarm Ice

Personal Relationships of Fund Principals

Warm Lukewarm Ice

Asset Management Companys Genealogy Chart, 1958-83,

Warm Lukewarm Ice

Warm Lukewarm Ice

Warm Lukewarm Ice

Intermediaries other than Investment Bankers

1999 IPO Deals from IPOData.com,

Warm Lukewarm Ice

Warm Lukewarm Ice

Warm Lukewarm Ice

Richard Vander Kaay &

Warm Lukewarm Ice

Warm Lukewarm Ice

Business Plan Competitions

Warm Lukewarm Ice

Buy Stakes in Public Companies

Where Are the Deals?!

Web 2.0 is the business revolution

Web 2.0 Meme Map

Tim OReilly, What is Web 2.0 www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html

Transition: Web 1.0

Web 2.0 (Read-Write)

Machine to Machine and People to People

Search and Browse

Publish and Subscribe

Portal, Commercial Aggregators

HTML, Solaris, Oracle

XML, AJAX, RSS, PHP, MySQL, XQuery

Private Equity Investing Cycle and Web 2.0

Private Equity Investing Cycle

= D * (ChnCon Rn* Sn*In)