Capital-Efficient Funding After the Bubble Glenn Carter Entrepreneur in Residence STARTech Early Ventures 7/30/2003

Let’s Define our Terms Funding Sources Funding Structure What is the “bubble”? How do you get funded? What does it look like now?

Funding Sources Friends and family Angels Venture Capital

What is a VC General partner Limited partners Likes risky investments? ROI

Structure of VC Investments Seed Round Series A Series B… What is “cram down”?

What is the “Bubble”? Year Total ($B) Texas ($B) Total # Texas # 1999 20 - 48 14 4487 1997 2000 96 27 6142 2821 2001 35 7 3088 1002 2002 3.4 2129 599 2003* 14* 2.5* 1800* 500*

How do you get funded? Business plan Capital efficient 2 Minutes Problem solved Technical Value proposition Market size Customers Capital efficient 2 Minutes “This is a good thing that should be done!” NOT Compete for scarce resources based on ROI

What’s next Who knows! Seems to be getting better Fruit stand model