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Venture Capital and Hispanic Entrepreneurship

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Large Company Experience, Sr. Executive HP, VP Avnet, Mgr SUN. Board membership of more ... Finjan- President, Malicious Code, Employee 18, 3rd Round Financing ... – PowerPoint PPT presentation

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Title: Venture Capital and Hispanic Entrepreneurship


1
Venture Capital and Hispanic Entrepreneurship
  • By Roberto Medrano
  • Co-Founder and Board Member
  • Hispanic-Net

2
Roberto Medrano
  • Professional Experience Skills
  • Large Company Experience, Sr. Executive HP, VP
    Avnet, Mgr SUN
  • Board membership of more than 10 companies
  • Started at beginning of EDA, Open systems and
    Security
  • Co-Founder/CEO, Hispanic-Net
  • (www.hispanic-net.org)
  • Education
  • MBA UCLA, MSEE MIT, BSEE USC
  • Start-up Experiences
  • Daisy Systems- EDA, Employee 31, last round and
    IPO
  • Milkyway Networks Firewall Software, Employee
    11, IPO
  • Finjan- President, Malicious Code, Employee 18,
    3rd Round Financing
  • SOA Software- Executive VP, Employee 50,
    3rd Round Financing
  • Raised more than 100 Million since Sept 2003

3
Introduction
  • What is Equity Financing?
  • InvestmentsThe VC Industry
  • What is Missing in Mexico?
  • Conclusion

4
What is Equity Financing?
  • Money at Risk
  • Purchase Ownership
  • High Growth Businesses
  • Strong Management
  • Realize a large ROI
  • 7 to 10x within 5 years


5
Equity Sources
  • Personal
  • Angels
  • Partnerships
  • Corporations
  • SBICs
  • Venture Capital Firms


6
Investment Preference
  • Stage of Financing
  • Amount of Capital
  • Geographic
  • Industry Specialization
  • Proven Management Team
  • Strong Referrals


7
Stages of Equity Financing
  • Seed
  • Start-up/First
  • Second/Third
  • Expansion
  • Later Stage
  • Mezzanine


8
Venture Capitalists Look For
  • Leadership
  • Vision
  • Experienced Team
  • Target Market
  • Customers
  • Customers
  • Customers


9
Venture Capitalists Look For
  • Corporate legal structure
  • US accounting terms
  • EXIT- IPO, Sell
  • EXIT
  • Customers
  • Customers
  • RETURN


10
Basic Rules in Seeking Venture Capital Financing
  • Concise Presentation
  • Be Proactive
  • Listen Carefully
  • Showcase Paying Customers
  • State the Positives and Negatives
  • There is always Competition


11
How to Approach a VC?
  • Referral
  • Referral
  • Referral


12
Get Some Help
  • But most important
  • Colleagues
  • Friends
  • Advisors
  • Investors
  • Strategic Partners
  • Law firms
  • Auditors
  • Bankers
  • Build your Network

13
MoneyTree Total Investments1995 YTD Q1 2005
( in Billions)
Source PriceWaterhouse Coopers
14
National Investments by Region(Q1 2005)
( in Millions)
of Deals
Change from Q4 04
(9.4) (24.7) (26) 27.1 6.7 (37.9) (18.5) (8
.0) 101.0 (63.5) 42.0 44.9 (47.8) NM 15.1 (
71.0) 22.1 (40.3)
204 87 56 41 37 50 36 37 17 32 30 19 14 5 4 1 3 1
(NM Not Meaningful)
Q1 2005 Totals 4,628
674 (14.9)
Source PriceWaterhouse Coopers
15
National Investments by Industry(Q1 2005)
Change In Amount from Q4 '04
of Deals
( in Millions)
198 68 61 51 58 40 37 36 24 20 12 13 21 16 9 9
(18.6) (47.2) 7.9 (27.9) 13.7 7.9 57.8 (15.
0) (43.2) (1.0) 35.4 (17.1) (20.6) 44.8 (51
.8) (51.8)
Q1 2005 Totals 4,628
674 (14.9)
Source PriceWaterhouse Coopers
16
Investments by Industry (Quarterly Percentage of
Total U.S. Investments)
( of Total Dollars)
Top 5 Industries Q1 04 to Q1 05
Source PriceWaterhouse Coopers
17
National Investments by Stage of Development(Q1
2005)
Change in Amount from Q4 '04
of Deals
( in Millions)
267 175 200 32
(10.0) (16.1) (21.5) (32.4)
Q1 2005 Totals 4,628
674 (14.9)
Source PriceWaterhouse Coopers
18
What is Missing in Mexico?
  • Risk Takers with New Ideas
  • Experienced Entrepreneurs
  • Experience Management Teams
  • Access to Capital for Businesses

19
Why The Lack of Capital?
  • Misperception of Mexican High Tech Businesses
  • Not enough traction.
  • Cultural Gap w/ Mainstream Financial Institutions
  • Shortage of Key Managers and Network
  • Lack Understanding of the Dynamics of Equity
    Investment
  • Highly Leveraged Balance Sheet--Over Dependence
    on Bank Debt

20
Hispanic Net Beliefs Values
  • Entrepreneurship Creates Wealth
  • People Networks are required for Success
  • Equal Access to Opportunity and Capital
  • Entrepreneurs and Executives Benefit by Assisting
    Others
  • Entrepreneurship Must be Nurtured

21
Hispanic-Net Objectives
  • Encourage Hispanic Entrepreneurship
  • Collaborate on Business-Business Deals
  • Advance Members within the Business World
  • Promote Early Stage High-Tech Ventures

22
Summary
  • Best time to start companies
  • Available people and resources
  • Lots uninvested capital.

23
www.hispanic-net.org
24
There are no Fundable Business Plans
  • Only Fundable Businesses

25
Start-Up Funding Changes
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