Artiman reviews - Issues of a startup by Amit Shah (2)

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Issues of a startup

• Amit Shah

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Experienced Investors and Entrepreneurs
U.S. Investment Team Amit Shah Yatin
Mundkur Saurabh Srivastava Tom Dennedy Dr.
Ajit Singh Dr. Akhil Saklecha

• Venture Investing Experience
• Collectively invested 450M in 100 companies -
  seed and early-stage
• 74 exits with aggregate realized return of 4.2x
• 9 IPOs and 33 acquisitions
• Entrepreneurial Experience
• Co-founded 4 startups in the U.S. and India
• 4 successful exits with aggregate value of 610
  million
• ZeitNet, PipeLinks, Equator, Daksh, Ross, Kaleida
• Backed by Sequoia, Greylock, General Atlantic,
  Actis, Sony, Canon, Hitachi
• Operating Experience - public and private
• Cisco, Rockwell, AMD, DEC, Silicon Graphics,
  Cabletron, Compaq, Qualcomm, HP, Tata Motors
• Technology Background
• Played pioneering roles in seminal industries
  Server Computing, Networking, Voice over IP,
  Video on Demand, IPTV, Digital Consumer
  Electronics
• 15 US patents

India Team M. J. Aravind Ramesh
Radhakrishnan Kumar Subramanyam
EIRs Piyush Patel Phil Ferolito
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Why? O Why a startup?

• The trigger for doing a startup
• My boss sucks I dont like my job
• He/she made it why cant I?
• Always wanted to do a startup
• Caution
• Not sexy most likely foolhardy
• Very, very hard work with incredible ups/downs
• Enjoyment is in hindsight

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Idea

• The actual Idea
• Hammer in search of a nail
• Intersection of experience, market understanding,
  ability to
• execute
• Is it a business?
• Feature
• Product
• Company

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What is a Business Plan?

• Not an excel spreadsheet or a word document or a
  PowerPoint presentation
• An innate and clear understanding of what you are
  going after
• Remember
• if it is in the press it is too late
• Truly understand the market dynamics

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The money

• Most businesses should not raise venture money
• Do you really know why and how much money you
  need?
• Who do you raise it from?
• Customers, partners, friends and family, angels,
  VCs
• Government (Darpa, SBIC,)

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The VCs

• They are evil dumb do not understand my
  business trying to screw me
• - All true
• - No different than a marriage
• How well do you know the person?
• - Look beyond the sexy early days and to the fat
  middle age and can you live with it?
• - Ecosystem

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Secrets of a firm

• What do they like?
• (These days) do they have the money?
• Which partner?
• Have they already done too many deals for the
  year?
• Is it their sweet spot?
• Can you finance future rounds with them?

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Finally

• Actually doing a startup
• Phases
• Primordial
• Middle Ages
• Industrial Revolution
• Deliverance

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Primordial

• Concept
• Early fools
• Extreme Energy
• Some lucidity

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Middle Ages

• Newer Skeptics converts
• Energy / focus correlation
• Outside thoughts
• Confusion

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Industrial Revolution

• Scale
• Technology ready for customers
• Sales and Marketing starts ramping
• Internal Challenges
• Job function confusion (mix of newer v/s older
  employees)
• Communications
• Hallway conversations dont work
• Processes (unfortunately) needed
• Fallout
• People dissatisfaction
• Inability to scale
• Some dont make it thru transition

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Deliverance

• Customer interaction starts
• Initially Skepticism
• Goes to piddly stuff
• Some more selling and it becomes maybe
• If persistence, the customer converts

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Personal goals (fill in)

• Value Creation in terms of dollars and time
• Global/National/Niche company
• Create a paradigm shift?
• Companys DNA will reflect this vision