Excel Spreadsheet Lessons Plans - PowerPoint

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Excel Spreadsheet Lessons Plans - PowerPoint Powered By Docstoc
					Lessons Learned
(a work in progress…)

   Mike Shanahan
      June 20, 2001
         The tuition paid so far:
•   About 2,000 business plans,
•   More than 200 investment rounds,
•   Nearly 60 portfolio companies,
•   Close to 200 venture capitalists,
•   More than 500 board meetings,
•   $2,000,000 in legal fees, and
•   Estimated $20,000,000 in losses
            Take the money
• “We don’t want to dilute ourselves that
• “We hoped to maintain 50% ownership
  after this round.”
• “Once we have hit our milestones, raising
  the next round will be easy.”
   Series K Preferred can’t be a
            good thing
• If a company has raised more than 5 rounds
  of venture money, be very skeptical.
• It may be a restart, but it’s probably on an
  old chassis.
• Bad habits of the early team are hard to
Money doesn’t get a 2nd chance

  Management lives to fight
       another day.
  Salesmen don’t behave like an
        Excel spreadsheet
• Quota performance is bimodal – one group
  concentrated around the quota, the other
  way off
• “Just add water” sales plans are like most
  instant foods – they look really good, but
  they’re not full substitutes for the real thing
Don’t build a Swiss Army Knife
• Feature creep creates an overwhelming
  product that does more than anyone can
  want. Engineers strut their stuff.
• Customers “All I wanted was a corkscrew”
• Salesman “You get that & 8 other features”
• Result: elongated sales cycle
           Ideas are great;
         customers are better

• Killer product idea is just how the Venture
  guy would solve the problem if he were a
  customer, but
• He’s not a customer and has no idea how or
  why product will be bought
   Venture Capital’s Holy Grail:
• Faster
• Better
• Cheaper

If you can find all three in one deal, you will
   have a successful investment
              A few truisms
•   Lower valuations cover many sins
•   Management references are user manuals
•   CEOs should visit customers every week
•   Illogical and rich is a bad combination
•   Repeat entrepreneurs don’t always succeed
•   180 days is a long time
•   Investment bankers are not your friends
Under Promise +

Over Deliver   =

 Keep your job

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