1. CONFIDENTIAL For Internal Use Only UCI BPC Workshop ”Attributes of Successful Teams in Start-up Enterprises ” John Creelman (MBA 1989, Finance) January 19, 2016 1

2. CONFIDENTIAL For Internal Use Only Contents My background and context. Attributes of successful teams in start-up enterprises. Practical application to BPC. Q&A 2

3. CONFIDENTIAL For Internal Use Only My background / Context 28 years in entrepreneurial environments: “taking risk in exchange for challenge, innovation and reward” 8 years with “mature” Computer Storage (IT) Companies: –Western Digital Corporation: Radical transformation in technologies, products and revenue streams. –MTI Technologies: private to public (IPO in 1994) 20 years as CFO for 7 Venture / Emerging Growth Companies: –Firms: Elemental SW, Copper Mountain Networks, VSK Photonics, Active Network, ID Analytics, PowerGenix Systems, RainTree Oncology. –Businesses: Web SW, telecomm equipment, photonics, data and predictive analytics, energy storage, drug distribution / health care informatics. Product / manufacturing, services, software. Domestic / International. –Skills: Finance, accounting, operations, capital markets (private equity, IPO and debt financings), business development, M&A and restructuring. Currently CEO of Ashmore Consulting Group – Consulting and advisory services for mid / late stage private Companies. Emphasis on fund raising, strategy and value creation. 3

4. CONFIDENTIAL For Internal Use Only Attributes of Successful Teams 1.The team has a clearly designated leader. 2.The team has a credible blend of skills to succeed. 3.The team has a process for constructive internal debate and for decisive decision making. 4.The team adapts and changes over time. 4

5. CONFIDENTIAL For Internal Use Only Key Attribute #1 The team has a clear leader. –While healthy Management teams need internal debate (see attribute #3), ultimately investors look to engage with 1 decision maker on the Management team. –Success will be tough if team does not have one designated leader: it is tough enough in early stage enterprises to stay focused even with a clear chain-of command. –Part of leader’s job is clarifying roles (and ownership): Division of labor and roles for existing team Identify essential competencies for the organization (even if they are missing) In most cases, agreeing what you won’t do is also important. Focus, focus, focus……. Structure the ownership / equity / compensation in a fair, decisive and timely manner. 5

6. CONFIDENTIAL For Internal Use Only Key Attribute #2 The team has a credible blend of skills to succeed. –Investors fund 2 things: “the idea” and “the right team”. –Titles and division of labor matter. –Some skills can be provided (i.e. supplemented) by advisors and Board members. –Don’t apologize for what your organization lacks, acknowledge gaps and have a plan to address them. The mix of skills required at the Executive (and Managerial) level will change over time. 6

7. CONFIDENTIAL For Internal Use Only Key Attribute #3 The team is skilled at fostering internal dialogue, gathering all points of view and driving decisions: –Core values here are critical: Intellectual honesty. Respect. Listening. Humility. When the discussion is over, if there is not pure consensus the leader makes the decision and “creates” consensus. This is why the CEO role is the toughest role on the Management team. 7

8. CONFIDENTIAL For Internal Use Only Key Attribute #4 The team adapts and changes over time: –Adaptation means changes in roles, organization structure, process, systems and tools. –Adaptation is a dynamic process it starts on “day one”. –The faster the pace, and the greater the challenges, the more essential adaptation is. –Supplement internal team with advisors, technical advisors and Board Members. –The team also modifies and tailors its message to fit the environment and constituents. 8

9. CONFIDENTIAL For Internal Use Only Practical Application to BPC 1.Teams with a clear leader will be viewed as being more grounded and decisive. 2.Initially, focus on the essential skills of the core team: –Supplement with advisors and BOD members –Acknowledge which gaps you have and have a plan to address them 3.Develop a culture which fosters healthy discussion: –Ask yourselves questions that outside investors would ask. –Talk about the tough decisions with investors 4.The team should always have a sense of the adaptations and challenges that it faces –“what are the problems the Company currently faces?” –“what are the opportunities the Company currently faces?” 9