Escolar Documentos
Profissional Documentos
Cultura Documentos
Jim Butterworth
Idea to Market Workshop
Ukraine, September 2008
Launching Your Startup
In the U.S.:
$1.8 trillion in revenue in 2003 (9.6% of all sales)
10.1 million jobs in 2003 (9.4% of employment)
600,000 new net jobs from 2000-2003
In Europe:
1.0 million jobs in 2004
630,000 new net jobs created from 2000-2004
Highest growth rates in biotech, health care and
medical devices
Largest absolute growth in university spin-offs
Private Academic
Professionally Intellectual property
managed Spin-outs
Return on investment Government
focused
Create new jobs and
May bring network, grow economy
business advice, Offer cash, tax
credibility, etc. incentives, in-kind
Stem brain-drain
Corporate
Manage risk Angels
Distribution networks Network, business
advice, credibility, etc.
Product R&D
Live vicariously
Operational skills
Spin-outs The 3Fs
Management Team
Track record
Relevancy
Bet on the jockey, not the horse!
Concept
Solves real problem
Favorable market dynamics
Disruptive
Unfair advantages & sustainable
competitive advantages
Proper capitalization
Peace and Prosperity Through Science and Collaboration www.crdf.org
The Venture Capital Numbers Game
LP 3 GP
LP 1 2%
LP 4
LP 2
$100 Management
Portfolio
$10 $10 Portfolio
Company 2 Company 9
$10 $10
Portfolio Portfolio
Company 3 Company 8
$10 $10
Portfolio $10 $10 Portfolio
Company 4 Company 7
Portfolio Portfolio
Company 5 Company 6
LP 3 GP
LP 1
LP 4
LP 2
$180 $20
Portfolio
$100 $35 Portfolio
Company 2 Company 9
Portfolio Portfolio
Company 8
Company 3
$40
Portfolio $25 Portfolio
Company 4 Company 7
Portfolio Portfolio
Company 5 Company 6
Non-Equity Equity
Personal funds Venture capital
Personal debt Angels
Grants and awards
The “3Fs” –
Customer pre-sales Friends, Family and
Venture leasing Fools
Receivables
Corporate direct
financing
investment
Business loans
In-kind
contributions Equity is the most
Joint ventures expensive form of capital!
How much?
When?
From where / whom?
What terms?
Security
Valuation
Control
Timing
Investor Final
Presentations Documentation
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Jim Butterworth
Idea to Market Workshop
Ukraine, September 2008
LAUNCHING YOUR STARTUP
Raising Venture Capital
Jim Butterworth
Idea to Market Workshop
Ukraine, September 2008
Launching Your Startup
Conception / Launch
Invention Growth Stage
Seed Stage Expansion Phase
Formation /
incorporation Exit
Market research
Product research Post-Exit
Early Stage
Product development
Team formation
Infrastructure build-out
Conception / Launch
Invention Growth Stage
Seed Stage Expansion Phase
Formation /
incorporation Exit
Market research
Product research Post-Exit
Early Stage
Product development
Team formation
Infrastructure build-out
Solid foundation =
best chance of
funding your venture
Market-driven concept
Talk to prospective customers
Assess market and competition
Resolve legal issues upfront
Satisfy prior employment obligations
Incorporate properly
Check intellectual property rights
Spin-out cleanly
Form a solid team
Management, board, advisors, professionals
Teamwork begets success
If possible, kick-start the business
Spin-out / acquisition
Key customer
CFIMITYM
Cash flow comes ultimately and most
importantly from customers, not from
investors
Profit is not cash flow
Capitalize properly
1. Summary (1)
Mission statement
What is the idea?
How will it create
value?
Timeline / milestones
Expected results
Specific request (e.g.,
$)
To create [value/EVA]
by [product/service] for/to [customer(s)] by…
1. Summary (1)
Mission statement
What is the idea?
How will it create
value?
Timeline / milestones
Expected results
Specific request (e.g.,
$)
5. Competitive
Environment (2)
Sustainable
competitive advantages
Alternatives
Competition (existing
and potential
Competitive Advantages
Proprietary IPR
Exclusive distribution
Exclusive content / sources
Proprietary manufacturing
Proprietary integration
Installed base / customer contracts
Unparalleled capital structure
Unparalleled scale, scope and/or focus
Team with unique expertise and/or access
First mover advantage
“We don't like their sound, and guitar music is on the way out.”
Decca Recording Co., rejecting the Beatles in 1962
Jim Butterworth
Idea to Market Workshop
Ukraine, September 2008