Start-Up Guide For The Technopreneur: Financial Planning, Decision Making, And Negotiating From Incubation To Exit + Website

A comprehensive guide to financial planning and venture fundraising for tech entrepreneurs
As technology progresses, impacting our daily lives in more and greater ways, technology start-ups come and go at a dizzying pace. There are plenty of opportunities out there for anyone with a great idea, but it takes much more than a great idea to make your tech start-up a success. In addition to creativity and new ideas, being a successful tech entrepreneur requires strategic decision-making in terms of business planning, financial planning, negotiations, and corporate governance.

This book serves as a thought-provoking guide that helps tech entrepreneurs avoid the dangers inherent in business start-ups in general and the treacherous realm of venture capital in particular. This book is the ideal reference for anyone who wants to overcome the challenges of running a start-up from incubation to exit.

•Excellent advice for tech entrepreneurs written in layman's terms
•Written by an author with more than fifteen years of experience as a founder and co-founder of tech start-ups in the U.S. and Asia
•Designed to fill the role of an experienced mentor for tech entrepreneurs
For first-time founders of tech start-ups requiring venture capital, Start-Up Guide for the Technopreneur is the perfect resource.

DAVID SHELTERS provides investment banking, business brokerage, and financial advisement services through his company, Karon Business Consulting. He is also an active participant in the local tech entrepreneurial scene, presenting at numerous BarCamps and other tech conferences. Shelters currently mentors several local software start-ups and is the in-house financial mentor at Hubba, a co-working space in the heart of Bangkok. He has over fifteen years of entrepreneurial experience as a founder, cofounder, or financial advisor to numerous tech start-ups in both the United States and Asia. Shelters has a BA in history and political science from the State University of New York at Albany, an MS in international affairs from Florida State University, and has completed the coursework for a master's in international business studies at Georgia State University. David regularly blogs at www.financeforgeeks.com.

Preface
Acknowledgments

Chapter 1
Finance for Start-Ups 101
Fundraising Stages
Pre-Funding Period
Seed Funding Stage
Series A Funding Stage
Series B Funding Stage
Risk/Return
Types of Funding
Private Equity
Debt Funding
Alternative Types of Funding
Public Funding
Incubator/Accelerator Programs
Capital Structure
Intellectual Property (IP)
Valuation
Asset-Based Valuation Models
Pro-Forma Based Valuation Models
Comparable-Based Valuation Models
Strategic-Based Valuation
Exit Strategy
Summary

Chapter 2
Know Your Investors (“KYI”)
KYI #1: Their primary objective is to make money.
KYI #2: There are many types of investors, each with different expectations and capabilities.
Types of Investors
Investment Criteria
KYI #3: Prospective Investors are looking for Success Traits.
“Skin-in-the-Game”
Innovation
Defined Target Market
Value Proposition
Commercial Viability
Risk Mitigation Factors (RMF’s)
Burn Rates
Strength of Management
Use of Funds
Traction
KYI #4: Money is not enough. A prospective investor needs to be evaluated based on their suitability as a strong business partner.
“Know the Space”
Non-Financial Advantages
Alignment of Interests
Issues of Control
Summary

Chapter 3
Business Planning From a Strategic Financial Perspective
Value of a Business Plan
Composition of a Business Plan
Executive Summary
Defined Problem & Solution
Product/Service
Value Proposition
Marketing Plan
Management Team
Strategic Partners
Operational & Expansion Plan
Company Objectives
Current Positioning & Traction
Risk Factors
Financials
Exit Strategy
Business Plan Customization
Marketing Plan
Operational & Expansion Plan
Company Objectives
Financials
Exit Strategy
Rudiments of Composing a Business Plan
Summary

Chapter 4
Financial Planning for Maximizing Returns
Importance of Having a Financial Plan
Assistance in Overall Business Planning
Ensuring the Health and Integrity of Capital Structure
Determining Sufficient Funding Amounts
Securing Funding in a Timely Manner
Securing Funds on the Most Favorable Terms
Determining Appropriate Responses to New Challenges & Opportunities
Instills Discipline and Maintain Focus
Maximizing ROI upon Execution of Exit Strategy
Formulating a Financial Strategy
Financial Objectives
FREE (Fund-Raising Effectiveness & Efficiencies)
FREE Measurement Tools
Composition of Financial Plan
Rules of Thumb
Summary

Chapter 5
Successful Fund Raising
Planning Funding Presentations
Prospectus Materials
Executive Summary
Business Plan
Funding Proposal
Private Placement Memorandum (PPM)
Shareholder Letter
Technology Brief
Demonstrations (a “Demo”)
Market Trends & Research Report
Other Miscellaneous Prospectus Materials
Different Types of Presentations
Elevator Pitch
Lobby (Power Point) Pitch
Conference Room Pitch (Formal Presentation)
Summary

Chapter 6
Becoming a Formidable Negotiator
Pre-Negotiations
Letter of Intent (“LOI”)
Non-Disclosure Agreement (NDA)
KYI Research & Inquiries
Leverage
Negotiating Capital
Due Diligence
Due Diligence Checklist
Due Diligence Response
Actual Negotiations
Term Sheet
Negotiation Approaches
Best Practices & Tactics
Points of Negotiation (Terms)
Have a Negotiating Plan
Concluding Negotiations
Successful Conclusion of Negotiations
Unsuccessful Conclusion to Negotiations
Post-Mortem of Negotiations
Summary

Chapter 7
Establishing an Investment-Grade Organization
Corporate Governance
Attributes
Benefits of Good Corporate Governance
Corporate Governance Best Practices
Corporate Governance Structures
Ethical Behaviors
Stakeholder Relations
Summary

Chapter 8
Financial Decision-Making for Optimal Performance
Financial Decision-Making Process
Practicing sound corporate governance
Understanding of Existing and Potential Decision-Making Dynamics
Managing Financial Expectations
Financial Decision-Making Structures
Establishing appropriate decision-making bodies and procedures
Allocating Decision-Making Authority & Responsibilities
Placing Individual Decision-Makers to the Appropriate Decision-Making Bodies
Financial Decision-Making In Practice
Strategic Financial Planning/Fund-Raising
Budgeting
Operational (Day-To-Day) Financial Decision-Making
Financial Dealings with External Parties
Exiting
Summary

Afterword

Appendix A
Sample Financial Plan

Appendix B
Sample Funding Proposal

Appendix C
Dictums of Entrepreneurial Finance

Glossary

About the Author

About the Website

Index