PRESENTS

RECIPE FOR A SUCCESSFUL STARTUP

Anil AdvaniManaging Partner

anil@inventuslaw.com

FIND YOUR NORTH STAR

Lifecycle of a Startup

Team; IP Protection

EXIT: ACQUISITION

Incorporation Debt vs. Equity Strategic Partnerships

ANGEL ROUND

SERIES A

SMALL CUSTOMER

SERIES B

BIG CUSTOMER

SERIES C

BRIDGE ROUND

SERIES D OFFERING

INITIAL PUBLIC

Stock Incentive Plan Selecting and Negotiating with VCs

Founders Stock; IP Protection

The big question: when

and how to exit????

GETTING STARTEDStep 1 : Validate the Idea• Research, Research, Research!• Identify the problem you are looking to

solve

• Is the problem worth solving?

• Is the technology feasible?

• Create a Minimum Viable Product [MVP]

• Sign up Beta Customers: Friends & Family

Step 2: Build the Team• Identify Founders• Identify Key Initial Employees• Titles are Important! Who will be the

CEO? There can only be 1 Leader. Are you the one?

• Don’t forget Sales team!• IP ownership issues• Watch out for fake mentors!

LEGAL ISSUES

When to Incorporate·Not too early, and certainly not too late!

Where to Incorporate·Local Jurisdiction or U.S.·Where are the: (a) customers, (b) investors; and/or (c) Exit options.

Dividing up Initial Equity; IP Ownership·Founders: Identify who the founders are. Difference from the “founding team”!

·Key Employees: Structure the arrangements carefully, in writing, and early on.

·Investors: They are experienced professionals; Learn how to negotiate.

Protecting Intellectual Property·Patents, Trademarks, Copyrights

·Third Party Claims

RAISING MONEY

Whether to Raise·Do you NEED the money?·What’s the plan to spend the money?

How Much to Raise?·How much do you need to get to the next stage?·Raise 25% more, but not too much more. Understand how dilution works.

Where to Raise from?·Angel Investors – there are “Good” angels and there are “Bad” Angels·Venture Capital Investors – Make them your friends and you will win!·Understand how the Cap table works; how to keep control of the company!·Strategic Investors – Best kind of investors, but watch out for key terms.

CREATING A BUSINESS

YOU NEED TO BE SELLING ALL THE TIME!

• Build a “Solid” Sales Team

• Know your customer; Know your product

• Build Metrics to measure success

BUSINESS NEEDS TO MAKE MONEY!

• Need to price the Product appropriately

• Need to Invoice on time

• Need to collect on time

• If revenues are not increasing with sales, then re-evaluate the process

EXITING THE BUSINESS

When to Exit• Plan to Exit should be built into the business plan from Day 1

• Main FINANCIAL goal of a founder should be to exit at the highest valuation• All efforts on fund raising, team building, sales, and growth should focus on

achieving the end goal of EXIT• The trap of a “lifestyle” business

How to Exit?• Sale to a Larger Strategic Company• Sale to a Private Equity Player• Going Public!

How much to sell for?• Sell for the Best offer at the Best Time

• Not too early, not too late!

THE END

NOW THAT YOU HAVE EXITED, TAKE A BREAK, GET BACK AND START AGAIN

GO TO SLIDE 1