Issues of a startup

Amit Shah

Experienced Investors and Entrepreneurs

Venture Investing Experience– Collectively invested $450+M in 100+ companies - seed and early-

stage– 74 exits with aggregate realized return of 4.2x– 9 IPO’s and 33 acquisitions

Entrepreneurial Experience– Co-founded 4 startups in the U.S. and India– 4 successful exits with aggregate value of $610 million

• ZeitNet, PipeLinks, Equator, Daksh, Ross, Kaleida– Backed by: Sequoia, Greylock, General Atlantic, Actis, Sony, Canon,

Hitachi

Operating Experience - public and private – Cisco, Rockwell, AMD, DEC, Silicon Graphics, Cabletron, Compaq,

Qualcomm, HP, Tata Motors

Technology Background– Played pioneering roles in seminal industries: Server Computing,

Networking, Voice over IP, Video on Demand, IPTV, Digital Consumer Electronics

– 15 US patents

U.S. Investment Team

Amit ShahYatin MundkurSaurabh SrivastavaTom DennedyDr. Ajit SinghDr. Akhil Saklecha

India Team

M. J. AravindRamesh RadhakrishnanKumar Subramanyam

EIRs

Piyush Patel

Phil Ferolito

Why? O Why a startup?

The trigger for doing a startup– My boss sucks; I don’t like my job;– He/she made it; why can’t 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

Idea

The actual Idea- Hammer in search of a nail- Intersection of experience, market understanding,

ability toexecute

Is it a business?– Feature– Product– Company

What is 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

Secrets of a firm

– What do they like?– (These days) do they have the money?– Which partner?– Have they already done too many deals for the year?– Is it their sweet spot?– Can you finance future rounds with them?

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 don’t work• Processes (unfortunately) needed

– Fallout• People dissatisfaction• Inability to scale• Some don’t 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”

Personal goals (fill in)

• Value Creation in terms of dollars and time

• Global/National/Niche company• Create a paradigm shift?• Company’s DNA will reflect this

vision