Raising Money Duncan McCallum OneLiberty Ventures www'oneliberty'com dmccallumoneliberty'com 6174927

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Raising MoneyDuncan McCallumOneLiberty
Ventureswww.oneliberty.comdmccallum_at_oneliberty.c
om617-492-7280
March 1, 2000
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Decision What I Look For, Company

• 1) Is there a problem worth solving? Can we
  build a public company?
• will customers value the solution? at what
  price? how many customers?
• 2) Why now?
• what is the market/technology discontinuity that
  creates a big opportunity?
• 3) Why you?
• world class understanding of the
  problem/technology, or
• compelling technology
• 4) Can you (with partners) deliver a whole
  product solution?
• 5) Can you create, or do you have, an unfair
  advantage?
• 6) Is there a pricing/channel mix that makes
  sense?
• 7) Can your weaknesses be fixed (with OneLiberty
  assistance)?

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Decision What I Look For, Entrepreneur

• Integrity
• Leadership
• Experience (ideally managing a PL)
• A world-class understanding of the problem to be
  solved
• Intellectual rigor / objectivity
• The self confidence to accept coaching, without
  losing your sense of direction
• Bias towards action (with appropriate levels of
  analysis)
• Orientation towards customers, rather than
  technology
• Ability to recognize, and hire to, weaknesses
• Ability to attract world class talent
• REACH!

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Decision The Process

• Usually takes 30-90 days
• Youre buying too!
• Nondisclosure agreements? - almost never
• How many firms? (typically 3 to 6)
• Create a sense of urgency
• Get a fair market price
• Dont want to appear overshopped
• Each firm will consume lots of your time
• VCs will often talk to each other
• this can help or hurt

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Decision The First Meeting

• 1 hour presentation. Have an agenda!
• Dont assume weve read your business plan
• Ways to Make Me Interested
• Market-driven, not technology-driven
• Customer visits, interviews
• Knowledge of competition, market
• Interesting advisors, partners, and/or employees
• Tell me youre looking for the best partner, not
  the best valuation
• Ways to Turn Me Off
• Dorm room business plans
• Inflexibility, arrogance
• Unrealistic valuation expectations
• Technology-centric
• You are not expected to have all the answers!

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Deal What Determines Valuation

• An art, not a science
• The markets are surprising efficient
• The factors
• Size of the opportunity
• Magnitude of the risks (company progress)
• market, competition, technology/product,
  management
• Amount raised vs. future capital needs
• what will the next round look like?
• Interest of other venture firms
• Ownership , Return on time