CBS Class: Innovate or Die - Feb 19, 2007

Evaluate a new business:

- management experience

- market opportunity

- business model

- capital needs

- competition

- entry barriers

- external risks

- execution risks

- valuation

- exit

- …

HOW to Weight all the factors?

A fool and his money are soon invited everywhere. – Warren Buffet

Entrepreneur’s Fantasy:

- control

- free capital

- free advices

Financiers’ Fantasy

- limited risk

- unlimited upside

- control

Financing Selection Drivers

- Business model

- Stage of life

- Competitive advantage

Key Decision Variables

- Availability of $

- Cost of $

- Control/governance

Financing resources:

SBIR - $1.6 bn in 2006; SBIC - $2.6 bn (for 3600 companies) in 2006

Corp. VC: JnJ, GSK

(HP – totally boot-straping; DeLorean Motors )…

Golden Rule: “Who have the gold makes the rules”

There is many a pessimist who got in the way by financing an optimist.

It is better to have loved and lost than never to have loved at all. – Alfred, Lord Tennyson

Tucker vs Segway

- Drive & Intense

- Compromise as long as goes his way

- Creative