Innovation, Startups, Life

Amit Shah

What is Venture Funding?

Riskiest money: Equity without security
Money that your relatives will not lend you A bank lends when you dont need it

Types of Venture fund

Seed
Like the individual / team

Early
When it is a concept: Mid Product ready; some customers interested

Late stage funds

In revenue; need money for expansion

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 Venture Investing Experience Collectively managing $900+M invested in 140+ seed/early stage companies 88 exits with aggregate realized return of 3.3x 11 IPOs and 32 acquisitions Entrepreneurial Experience Co-founded 10 startups in the U.S. and India 6 successful exits with aggregate value of > $1 Billion ZeitNet, PipeLinks, Equator, Daksh, Ross, Kaleida, Clarity, Airgo, BioImagene Operating Experience - public and private Cisco, Rockwell, Siemens, AMD, AT&T, Lucent, Cabletron, Digital Island, FireEye, Airgo, Clarity Wireless, Adaptive, Compaq, Qualcomm, HP Technology Background Played pioneering roles in seminal industries: Server Computing, Networking, Voice over IP, IPTV, Digital Consumer Electronics 26 US patents

EIR Frank Thibodeau Adam De La Zerda Mahmood Panjwani Atul Sharan

Investment Strategy
Concept and Early Stage
World class entrepreneurs with ideas Lower cost basis, providing significant ownership Ability to impact company strategy

White Spaces
Potential to dominate markets No identifiable competition, with at least a 12-month lead on technology or market Lower execution risk and outsized returns

Scalable Business Models

Develop technologies cost effectively Scale the business efficiently Fundamentally change economics of target sectors

Leverage India
Long-standing network and deep deal flow Same disciplined screen as in Silicon Valley To build companies that cannot be built in the US BioImagene, Guavus, Cellworks

Innovation
Best ideas have come from outside industry

Intersect expertise in one market with another

Think out of the box Do NOT be a hammer in search of a nail - Intersection of experience, market understanding, ability to Execute

Is it a business?
Feature, Product or Company?

Artiman: Focus on Disruption

BioImagene (Acquired by Roche)
Changing Standard of Care in Pathology

Cellworks (www.cellworksgroup.com) Aditazz (www.aditazz.com)

Designing drugs the way computer chips are designed

Designing & building Facilities the way computer chips are designed and fabricated

Non-invasive testing for Cardio-vascular diseases

Motion Processing for consumer devices First American TV company in 30 years

Zspace (www.zspace.com)

Invensense (www.invensense.com)

Prysm (www.prysm.com)

Why? O Why a startup?

The trigger for doing a startup My boss sucks; I dont like my job; He/she made it; why cant I? Always wanted to do a startup Caution: Not sexy; most likely foolhardy Very, very hard work with incredible ups/downs Enjoyment is in hindsight

Still want to do a startup?

Create a Business Plan
Not an excel spreadsheet or a word document or a powerpoint presentation

An innate and clear understanding of what you are going after Remember: if it is in the press it is too late Truly understand the market dynamics

The Money
Most businesses should not raise venture money Do you really know why and how much money you need? Who do you raise it from? - Customers, partners, friends and family, angels, VCs - Government (Darpa, SBIC,)

The VCs
They are evil; dumb; do not understand my business; trying to screw me;
- 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

Finally
Actually doing a startup Phases
Primordial Middle Ages Industrial Revolution Deliverance

Primordial
Concept Early fools Extreme Energy Some lucidity

Middle Ages
Newer Skeptics & converts Energy / focus correlation Outside thoughts Confusion

Industrial Revolution
Scale Technology ready for customers Sales and Marketing starts ramping Internal Challenges
Job function confusion (mix of newer v/s older employees) Communications
Hallway conversations dont work Processes (unfortunately) needed

Fallout
People dissatisfaction Inability to scale Some dont make it thru transition

Deliverance
Customer interaction starts
Initially Skepticism Goes to piddly stuff Some more selling and it becomes maybe If persistence, the customer converts

Start-Up Check List

Establish business entity Engage a lawyer/be cautious going solo with online resources Corporation is the entity of choice if you plan to raise money for the business Establish initial ownership of company with cofounders Fed/State registration, business license and permits Secure Key Personnel As shareholders, consultants or employees

Start-Up Check List (cont.)

Secure work space Clean up the garage, lease an office, come to Artiman Open bank account Obtain necessary insurance Workmens comp Medical Liability Implement Accounting System Popular Quickbooks is adequate Select payroll vendor (Paychex, ADP)

Business is Never as Planned

You will have to Refine your Business Plan
Annual Strategy Plan Annual Operating Plan Annual Financial Budgets

Artiman Tool Kit

www.artiman.com/startup-toolkit
Templates and sample documents covering:
Annual Operating Plans Board Meetings Financial Human Resource Legal

Artiman Tool Kit Index

Artiman Tool Kit Index Description 1 2 AOP1 AOP2 AOP Time Line Graphic Illustration Sample AOP Time Line Artiman Tool Kit Index Format PPT Excel 21 HR2 22 HR2.1 Description Form of Offer Letter Form of Empl, Conf. Inf. and Inv. Assign. Agt Format Word Word

3
4 5 6 7 8

AOP3
AOP4 AOP5 Board1 Board2 Board3

Sample AOP
Product Planning Template Sample Project Responsibility Owners Key Examples of Information for Board Meeting Sample Board Package Action Item Template

PPT
Word Word Excel PPT Excel

23 HR3
24 HR4 25 HR5 26 HR6 27 HR7 28 HR8

New Hire Check List

Separation Release Letter EE Termination Check List 90 Day New Hire Review Form Employee Self-Evaluation Form Performance Eval and Career Dev Form

Excel
Word PDF Word Word Word

Board4

Sample Board Consent by Email

Sample Board Indemnification Agreement 10 Immutable Rules for Exec Presentation Financial Package Company Cap Table Expense Report Template

Word
Word PDF Excel Excel Excel

29 HR9
30 HR10 31 Legal1 32 Legal2 33 Legal3 34 Legal4

Staff Empowerment Article

Consultant Agreement Sample VC Term Sheet Sample Non-Disclosure Agreement Sample Note & Warrant Purchase Agrmt Sample Note

Word
Word Word Word Word Word

10 Board5 11 Board6 12 Fin1 13 Fin2 14 Fin3

15 Fin4
16 Fin5 17 Fin6 18 Fin7 19 HR1 20 HR1.1

Insurance & Benefits Cost Schedule

Sample Cash Investment Policy Sample Fixed Asset Capitalization Policy Sample Travel & Expense Reimbursement Policy Sample Employee Handbook & Policies Sample Company Handbook

Excel
Word Word Word Word Word

35 Legal5
36 Legal6 37 Legal7 38 Legal8 39 Legal9

Sample Warrant Agreement

Sample Mgt Rights Agreement Form University License Term Sheet Document Creation/Retention Review Fenwick Start-up Legal Resource Presto

Word
Word Word PPT PDF