Start-Up Guide for the Technopreneur, + Website: Financial Planning, Decision Making and Negotiating from Incubation to Exit

Content: Preface xiii    Acknowledgments xvii    CHAPTER 1 Finance for Start-Ups 101 1    Fundraising Stages 1    Prefunding Period 2    Seed Funding Stage 3    Series A Funding Stage 3    Series B Funding Stage 5    Risk/Return 5    Types of Funding 7    Private Equity 7    Debt Funding 8    Alternative Types of Funding 9    Public Funding 12    Incubator/Accelerator Programs 13    Capital Structure 13    Intellectual Property 17    Valuation 19    Asset-Based Valuation Models 20    Pro Forma-Based Valuation Models 20    Comparable-Based Valuation Models 21    Strategic-Based Valuation 22    Exit Strategy 23    Summary 24    CHAPTER 2 Know Your Investors 27    KYI #1: Their Primary Objective Is to Make Money 27    KYI #2: There Are Many Types of Investors, Each with Different Expectations and Capabilities 30    Types of Investors 30    Investment Criteria 35    KYI #3: Prospective Investors Are Looking for Success Traits 37    Skin in the Game 38    Innovation 39    Defined Target Market 39    Value Proposition 40    Commercial Viability 41    Risk Mitigation Factors 42    Burn Rates 43    Strength of Management 43    Use of Funds 44    Traction 45    KYI #4: Money Is Not Enough 47    Know the Space 48    Nonfinancial Advantages 49    Alignment of Interests 49    Issues of Control 51    Summary 56    CHAPTER 3 Business Planning from a Strategic Financial Perspective 57    Value of a Business Plan 57    Composition of a Business Plan 59    Executive Summary 60    Defined Problem and Solution 61    Product/Service 63    Value Proposition 63    Marketing Plan 65    Management Team 72    Strategic Partners 74    Operational and Expansion Plan 76    Company Objectives 78    Current Positioning and Traction 80    Risk Factors 81    Financials 84    Exit Strategy 90    Business Plan Customization 91    Marketing Plan 91    Operational and Expansion Plan 92    Company Objectives 92    Financials 93    Exit Strategy 93    Business Plan Rudiments 94    Summary 95    CHAPTER 4 Financial Planning for Maximizing Returns 97    Importance of Having a Financial Plan 98    Assistance in Overall Business Planning 99    Ensuring the Health and Integrity of Capital Structure 101    Determining Sufficient Funding Amounts 101    Securing Funding in a Timely Manner 102    Securing Funds on the Most Favorable Terms 104    Determining Appropriate Responses to New Challenges and Opportunities 104    Instilling Discipline and Maintain Focus 105    Maximizing ROI upon Execution of Exit Strategy 106    Formulating a Financial Strategy 106    Financial Objectives 108    FREE 108    FREE Measurement Tools 109    Financial Plan Composition 120    Rules of Thumb 121    Summary 122    CHAPTER 5 Successful Fundraising 125    Planning Funding Presentations 125    Prospectus Materials 127    Executive Summary 127    Business Plan 127    Funding Proposal 128    Private Placement Memorandum 129    Shareholder Letter 130    Technology Brief 131    Demonstrations 131    Market Trends and Research Report 131    Other Miscellaneous Prospectus Materials 132    Different Types of Presentations 133    Elevator Pitch 134    Lobby (PowerPoint) Pitch 135    Conference Room Pitch (Formal Presentation) 135    Summary 140    CHAPTER 6 Becoming a Formidable Negotiator 143    Prenegotiations 144    Letter of Intent 144    Nondisclosure Agreement 144    KYI Research and Inquiries 145    Leverage 146    Negotiating Capital 149    Due Diligence 149    Due Diligence Checklist 149    Due Diligence Response 149    Actual Negotiations 150    Term Sheet 150    Negotiation Approaches 150    Best Practices and Tactics 151    Points of Negotiation (Terms) 153    Have a Negotiating Plan 168    Concluding Negotiations 174    Successful Conclusion of Negotiations 174    Unsuccessful Conclusion to Negotiations 174    Negotiation Postmortem 175    Summary 175    CHAPTER 7 Establishing an Investment-Grade Organization 179    Corporate Governance 180    Attributes 180    Benefits of Good Corporate Governance 181    Corporate Governance Best Practices 182    Corporate Governance Structures 182    Ethical Behaviors 189    Stakeholder Relations 194    Summary 199    CHAPTER 8 Financial Decision Making for Optimal Performance 201    Financial Decision-Making Process 202    Practicing Sound Corporate Governance 202    Understanding Existing and Potential Decision-Making Dynamics 203    Managing Financial Expectations 206    Financial Decision-Making Structures 208    Establishing Appropriate Decision-Making Bodies and Procedures 209    Allocating Decision-Making Authority and Responsibilities 212    Placing Individual Decision Makers on Appropriate Decision-Making Bodies 216    Financial Decision Making in Practice 219    Strategic Financial Planning/Fundraising 219    Budgeting 221    Operational (Day-to-Day) Financial Decision Making 222    Financial Dealings with External Parties 224    Exiting 228    Summary 232    Afterword 235    APPENDIX A Sample Financial Plan 237    APPENDIX B Sample Funding Proposal 241    APPENDIX C Dictums of Entrepreneurial Finance 245    Glossary 251    About the Author 271    About the Website 273    Index 275