Vanderbilt Engineering Presentation

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Vanderbilt Engineering Presentation

• For Dr. Paul King

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Background

• Early days Small time-Mississippi Public
  Schools

• Education Engineering-MSU/MBA-Florida

• NASA-launch operations, shuttle experiments
  (1979-1991)

• Medical device company founder-Endius, Inc.
  Boston, MA Spine/Ortho market (1991-1998)
• 13 Electro-chemical and surgical device patents

• Venture Capital-Harbert Management Corp.
  (1999-2004)
• Discovery Healthcare LLC, President (2004-
  present)

• Boards Alabama I/T Assoc. - Chairman
• Bham Venture Club - President
• Bham Entrepreneurial Center
• TechBirmingham
• Awarix Corp (wireless spin out)
• Publication Launch Fever March, 03

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Who am I?

• Try to figure out early on if you are an
  entrepreneur, large cap corporate, small cap
  corporate, small business owner, artist, civil
  servant or teacher.

Entrepreneur
All good things come to him who waits...
Civil Servant
Small Cap Corporate
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Starts with an idea
and a prototype
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The dogs finally ate the dog food.
Fastest growing private spine company.
The leader in endoscopic spinal fusion. WSJ
10/02
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Suggestions

• It is OK to be confused.
• Dont take yourself too serious.
• What do you really want to do and what are your
  strengths.
• Success is more an issue of trial and error.
• Dont let others put you in a box.
• Cultural fit is crucial. Location, Location..
• You are only as good as your network.

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Follow your Passion.(If you dont have one,
find one.)

• Try to get as close to your dream as possible.

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Be all you can be.

• Never let your past define or direct your future.

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Reality

• The companys value is
• 20 Seasoned management
• 20 Market and timing
• 20 Ability to work as a team
• 20 Pure stupid blind luck
• 15 Marketing expertise
• 5 The Technology (yet a vital part)

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The Basic Requirements(for a Wall Street/Venture
Capital type company)

• Total market size 900MM-2B
• Your share minimum 50MM-100MM
• Full time, committed principles.
• Seasoned (done one) management preferred.
• Solves big problems ideally in IT or Life
  Sciences.
• Can build long term relationships with VC.
• Able to evolve and change.
• Deal can exit in 4-7 years.
• If you answered No to most of these you can still
  grow a company and sell it for real money.

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Seven reasons VCs Turn Down Biotech Ventures

• Poor Management
• Undifferentiated Technology
• Small Markets
• Unrealistic Valuation Expectations
• Doesnt Fit Investment Criteria
• No one willing to quit her/his day job once they
  get funding.
• Founder doesnt listen

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Personal Satisfaction

• Try not to let financial reward be a key driver
  in your decision process. It is a little about
  having it and a lot about doing it.

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Opportunities

• Three or four big opportunities will come in your
  career. Look and be ready for them. Be open to
  change. (e.g. aerospace guy selling purses.)

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Approaches

• Act as a free agent.
• Employ multiple streams of income to diversify
  your revenue.
• Pick a career path and grow with the company and
  a rising tide.

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Factors to Financial/Job Satisfaction
Average 58 (time for change)
Average should be more than say 60 to remain in
job.
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Where is the Money?
SECTOR IRR UPSIDE (NET WORTH) Corporate job,
investing wisely 10 1-2 million Venture
capitalist large variance 1-100
million Corporate job, executive
large variance 3-50 million Residential
real-estate rental property 14 1-5
million Commercial Real-estate rental
property 15-20 1-8 million Resort real-estate
rental property 15-18 2-10 million Owner
of small business 20-30 single digit
millions Oil and Gas ownership 30-40 double
digit millions Founder of technology
company 75 25-200 millions Founder of public
company 1000 hundreds of millions