1. Entrepreneur: How to Launch Your Idea Presented by: Paul N. Bernal Human Capital International Entrepreneur’s Idea Event May, 2010

2. Bio

3. Agenda Entrepreneur vs Intrapreneur Intrapreneur’s 10 CommandmentsIntrapreneur’s 10 Commandments How to Build Your Value Proposition Concept StatementConcept Statement Market OpportunityMarket Opportunity Product or Service DescriptionProduct or Service Description Program StrategyProgram Strategy Competitive AdvantageCompetitive Advantage TechnologyTechnology Intellectual PropertyIntellectual Property Project TimingProject Timing FinancialsFinancials TeamTeam Resources for the Entrepreneur

4. Intrapreneuring vs Entrepreneuring Entrepreneur – Innovative, self starter, runs their own businessEntrepreneur – Innovative, self starter, runs their own business Intrapreneur – Innovative, self starter, works in corporate environmentIntrapreneur – Innovative, self starter, works in corporate environment Culture Shock:Culture Shock: –Corporations, Small Co.’s & Startups Skill Set RequirementsSkill Set Requirements CultureCulture Risk vs. RewardsRisk vs. Rewards E ntrepreneur/IntrapreneurE ntrepreneur/Intrapreneur –Outside vs. Inside the Corporate Box –Creating the Future vs. Pre-defined Future –Risk Taker vs. Evangelist –Cure vs. Virus

5. INTRAPRENEUR’S TEN COMMANDMENTS 1.C ome to work each day willing to be fired 2.C ircumvent any orders aimed at stopping your dream 3.D o any job needed to make your project work, regardless of your job description 4.F ind people to help you 5.F ollow your intuition about people you choose, and work only with the best 6.W ork underground as long as you can, publicity triggers the corporate immune mechanism 7.N ever bet on a race unless you are running in it 8.R emember it is easier to ask forgiveness than for permission 9.B e true to your goals, but be realistic about the ways you achieve them 10.H onor your sponsors Source: Gifford Pinchot, Intrapreneuring, Harper & Row, 1985

6. Business Concept Elevator PitchElevator Pitch –What is the pain being solved by your concept –What product/service are you introducing –How does it alleviate the pain Higher QualityHigher Quality CheaperCheaper FeaturesFeatures BenefitsBenefits

7. Market Opportunity Market Assessment (Use graphs)Market Assessment (Use graphs) –Global Market Size –Market differentiation –Potential Market Capture Where does/can your business competeWhere does/can your business compete What market share/size can you capture in dollarsWhat market share/size can you capture in dollars What is the competitive landscapeWhat is the competitive landscape Discriminators over competitorsDiscriminators over competitors

8. Product or Service Description Describe specifically and precisely what your product/service isDescribe specifically and precisely what your product/service is Describe specifically who the customer is for this product or serviceDescribe specifically who the customer is for this product or service Estimate what a customer might be willing to pay for the product/service offeringEstimate what a customer might be willing to pay for the product/service offering

9. Program Strategy –Strategies to enter market –What is your product entry plan –How will you make money –Business Strategy Value chain strategyValue chain strategy Rollout strategyRollout strategy RoadmapsRoadmaps

10. Competitive Advantage – Why You? Why can your business do this better than any of its competitors?Why can your business do this better than any of its competitors? –Who is the competition –What do they offer and why are we better What unique capability will be used to bring idea to market?What unique capability will be used to bring idea to market? What business relationships will be used to bring this product or service to market?What business relationships will be used to bring this product or service to market?

11. Technology/Product Development Technology DevelopmentTechnology Development –Prototype Development –Demonstrations Performance test (Verification of requirements)Performance test (Verification of requirements) Functional tests (verification of functions)Functional tests (verification of functions) Manufacturing or production tests (price point verification)Manufacturing or production tests (price point verification) Product/ServiceProduct/Service –Engineering Requirements and Design –Performance Analysis –Product Plan/design (# of, types, features, size, …) –Sample Product/Assembly Operations ConceptOperations Concept –Facilities –Operational Plan –Rollout- Startup

12. Intellectual Property (IP) List any Patents, Trademarks, or copyrights which form the Basis of the Opportunity.List any Patents, Trademarks, or copyrights which form the Basis of the Opportunity. Include rights, strength and weakness in IP.Include rights, strength and weakness in IP. Discuss any like or external patents, rights which would impact on this business?Discuss any like or external patents, rights which would impact on this business? What IP is needed to get concept to Market?What IP is needed to get concept to Market? –What is needed to buy, develop, or license for success? NDAsNDAs Patent StatusPatent Status –Issues IP IssueIP Issue –Resolution IP AcquisitionIP Acquisition –Plan –Statues IP ManifestIP Manifest –Detail list of ALL IP DisclosuresDisclosures Trade SecretsTrade Secrets PatentsPatents

13. Business Timeline How long until the technology is mature and the prototype fully developed?How long until the technology is mature and the prototype fully developed? Business Plan and Model DevelopedBusiness Plan and Model Developed –Who is the 1 st customer? –When will they buy? –When will Boeing realize 1 st dollar received? –Business Readiness RoadMap How will the Business progress alongside the technology advancements?How will the Business progress alongside the technology advancements? When will the product or service be ready for market?When will the product or service be ready for market? What are the risks to this timeline?What are the risks to this timeline?

14. Financial Model Financial/Cost Analysis/ModelFinancial/Cost Analysis/Model –Revenue model –Cost model Financial ReturnsFinancial Returns Investment requirementsInvestment requirements

15. Financial Hurdles "What questions are you likely to be asked...""What questions are you likely to be asked..." –What problem will you solve? –Who currently has the problem? –How will you solve it? –How big is the market potential? –What is your distinct advantage? –How does the competitive landscape look? –What are the financial implications? –How much capital will you need to develop the solution (and the company supporting it)? –What kinds of volumes and margins are reasonable to expect? –What are you team’s qualifications? How strong and proven is Management?

16. Funding Sources Funding SourcesFunding Sources –Friends, Family, and Angels (Private-Party Agreement) Investment secured through private partyInvestment secured through private party –Banks (Secured short to medium-term loans) Secure short to medium-term loansSecure short to medium-term loans What they financeWhat they finance –Working Capital –Equity –Lines of Credit What they look forWhat they look for –Personal Guarantees/backers (i.e. Boeing/Innovator) –Accounts Receivable –Plant & Property –Commercial Finance Companies (Asset-based lenders, aggressive banks) Vendor contract is secured and “proof of concept” (either prototype or demo) contract could be financedVendor contract is secured and “proof of concept” (either prototype or demo) contract could be financed What are they? Assets based lenders, more aggressive than banksWhat are they? Assets based lenders, more aggressive than banks How do they differ from banks? Quicker processing, higher ratesHow do they differ from banks? Quicker processing, higher rates What do they finance? Receivables (they buy your invoices), sometimes inventoryWhat do they finance? Receivables (they buy your invoices), sometimes inventory

17. Funding Sources Cont… –Corporate Venture Funds The proposal must fit within their core competency and corporate strategic objectivesThe proposal must fit within their core competency and corporate strategic objectives Tend to be risk adverseTend to be risk adverse May seek to own the IPMay seek to own the IP Probable exit strategy: acquisitionProbable exit strategy: acquisition Will seek to control processWill seek to control process –Venture Capital Will negotiate valuationWill negotiate valuation May seek to significantly control IP equityMay seek to significantly control IP equity Will institute/demand fiscal disciplines and milestonesWill institute/demand fiscal disciplines and milestones Will want to syndicate the riskWill want to syndicate the risk VC may have very stringent requirements for speedy profitability and very rapid growth (Minimum zero to $20M in 4-5 years)VC may have very stringent requirements for speedy profitability and very rapid growth (Minimum zero to $20M in 4-5 years) Top management team requiredTop management team required Large Market Potential ($50-$100M plus revenues) Vertical market integrationLarge Market Potential ($50-$100M plus revenues) Vertical market integration Tough Due-diligenceTough Due-diligence

18. Team Who are the key team members that will make this project successful?Who are the key team members that will make this project successful? –Include a brief bio with relevant experience and a description of roles and responsibilities –Angels. Banks, and Venture Capitalist Investors are more interested in the Team than they are in the Concept Invest in “A” Team with “B-” Concept over a “A” Concept with a “B-” TeamInvest in “A” Team with “B-” Concept over a “A” Concept with a “B-” Team

19. Resources – Resource Book List – Resource Web Sites – Angel Resources – Business Plan Checklist

20. Resource Books A sample list of learning materials on starting a business: The Art of The Start – Guy KawasakiThe Art of The Start – Guy Kawasaki The time-tested, battle-hardened guide to starting anythingThe time-tested, battle-hardened guide to starting anything Smartups – Rob RyanSmartups – Rob Ryan Lessons from Rob Ryan's Entrepreneur America Boot Camp for Start-UpsLessons from Rob Ryan's Entrepreneur America Boot Camp for Start-Ups Intrapreneuring in Action – Gifford PinchotIntrapreneuring in Action – Gifford Pinchot Gifford Pinchot introduced one of the most liberating concepts to emerge in business, a way empower employees to create new products, services or processes in a fraction of the normal time and cost.Gifford Pinchot introduced one of the most liberating concepts to emerge in business, a way empower employees to create new products, services or processes in a fraction of the normal time and cost. Crossing the Chasm – Geoffrey MooreCrossing the Chasm – Geoffrey Moore Here is the bestselling guide that created a new game plan for marketing in high-tech industries. Crossing the Chasm has become the bible for bringing cutting-edge products to progressively larger markets.Here is the bestselling guide that created a new game plan for marketing in high-tech industries. Crossing the Chasm has become the bible for bringing cutting-edge products to progressively larger markets.

21. Resource Books Cont... Business Plans for Dummies – Paul TiffanyBusiness Plans for Dummies – Paul Tiffany A reference guide to find quick and easy solutions to creating dynamic business plansA reference guide to find quick and easy solutions to creating dynamic business plans The Entrepreneur’s Guide to Business Law – Constance BagleyThe Entrepreneur’s Guide to Business Law – Constance Bagley Provides a masterful treatment of the legal issues associated with starting a business. It walks the entrepreneur through the choice of business entity, structuring the ownership among the founders, raising money, forming an effective board of directors, and going public.Provides a masterful treatment of the legal issues associated with starting a business. It walks the entrepreneur through the choice of business entity, structuring the ownership among the founders, raising money, forming an effective board of directors, and going public. Fueling Innovation – Courtney PriceFueling Innovation – Courtney Price A reference guide to walking an entrepreneur through critical steps of an opportunity assessment and market validation.A reference guide to walking an entrepreneur through critical steps of an opportunity assessment and market validation. The Innovator’s Dilemma – Clayton ChristensenThe Innovator’s Dilemma – Clayton Christensen Presents a set of rules for capitalizing on the phenomenon of disruptive innovation.Presents a set of rules for capitalizing on the phenomenon of disruptive innovation.

22. Web Links Business Education –Main web page for the University of Washington http://www.washington.edu/http://www.washington.edu/http://www.washington.edu/ Funding Resources –Directory of venture capital firms and more than 3,000 VC tradeshows. http://www.vfinance.com/http://www.vfinance.com/http://www.vfinance.com/ –Garage.com is a venture capital investment bank that provides funding services for high technology and life sciences startups. http://www.garage.com/http://www.garage.com/http://www.garage.com/ –Small Business Administration http://www.sbaonline.sba.gov/http://www.sbaonline.sba.gov/http://www.sbaonline.sba.gov/ –Emerging Technologies http://www.emergingtech.orghttp://www.emergingtech.orghttp://www.emergingtech.org Competitor Research –In-depth information about specific companies. Information about Sales Leads, Direct Mail Advertising, Telemarketing, Qualifying Prospects, Making Credit Decisions, Locating suppliers, and Research. http://www.dnb.com/us/http://www.dnb.com/us/http://www.dnb.com/us/ –Short company profiles - Some of the information is free. http://www.hoovers.com/free/http://www.hoovers.com/free/http://www.hoovers.com/free/ –Company websites and Security and Exchange Commission (SEC) filings for public companies http://www.sec.gov/edgar/searchedgar/companysearch.htmlhttp://www.sec.gov/edgar/searchedgar/companysearch.htmlhttp://www.sec.gov/edgar/searchedgar/companysearch.html

23. Angel Resources A sampling of local Angel Groups:

24. Business Plan Checklist