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TIMMONS MODEL

  • Core opportunity: who are the people who know more than anyone else on the planet about the revenue and cost model and underlying drivers and assumptions; how to price, get sales marketing customer service and distribution, the competition, the economics of the business, the free cash flow?
  • Who can help us get the necessary knowledge and access to people, networks, money and talent?
  • Who has the experience building these companies?
  • Who understands the context, changes and timing of the venture in terms of the capital markets, any key regulations, and the internal drivers of the industry, technology and market?
  • Who can make the biggest difference to our venture?
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SPREADSHEETS!

  • What if you assume X infusion of capital?
  • We use spreadsheets to analyze capital requirements so we can answer what if questions.
  • A period of study sales if Applied uses SiOG+.
  • What if you run out of cash before the prototype? What if it takes longer to find a device manufacturer to use this than expected?
  • Let's determine the amount of money needed to launch the business and the amount and timing of potential rewards.
  • Assumptions about revenues and expenditures go in first.
  • See what the venture will look like financially over the first 18 months.
  • See the impact of several what if scenarios.
  • The amount of money required is insignificant compared to the potential.
  • What needs do corporate sponsors have from us?
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GAP AND FIT MODEL

  • Who has access to key knowhow and resources that we do not?
  • What is missing that we have to have to obtain a very good odds of success?
  • Who can add the most value, insights, and solid experience to our venture now? How?
  • Who are the smartest, most insightful people in our industry given what we are trying to do?
  • Who has the most valuable perspective and networks to help our venture?
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social assets

  • Accuracy in social perception.
  • Skill at impression management.
  • Skill at persuasion.
  • Sill at influence.
  • A high level of social adaptability.
  • We can chart our present network.
  • We view our network as a crucial aspect for ensuring the success of SiOG++
  • We want to stabilize and maintain our connection with tool makers.
  • We seek to undertake actions toward increasing our network density and diversity.
  • Our efforts will attain solidarity and cohesiveness with Applied.
  • We apply the stimuli for better and faster adaptation to ACTION.
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Expect success

Just for fun, imagine a check from Applied for $5million in your hand. What do you do next?

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intuition

  • We take the check.
  • We promise them equity at a certain percentage rate unless it's a petty-cash check that demands no equity.
  • We deposit the check in a corporate bank account.
  • When we see the money we hire Srikanth right away. We hire Sarko and Ilias later. Kazi can help us form this company.
  • We pay ourselves a salary too, so we can keep this going.
  • We get started engineering as soon as possible in sync with Applied engineers.
  • In six months we have a prototype for showing off to Apple, Microsoft and whoever else.
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QUESTION

When Applied wants to give us money, what do we do to receive it?

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ARCTANGENT!

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morning typing thoughts

So we have sent this to Applied, and we are waiting for a reply. And we are waiting for a response. We are collecting our thoughts. They have reeived it. So what next?

THinking positively, and they will respond positively. Ho dowe prpare for that meeting? That's one thing.

The other thing is, we have now accepted Frank as our lawyer for IP. Ok? And we have an outstanding email from him about contacting someone at APplied on his own. Now, we can go to Applied on our own and come back and tell Frank you have no role in it. Or we can tell Frank now that we have reached out to someone at applied by someone we met after we met with him and then say that we feel that is the best contact and he would still be on our team under a different arra.

Sswee Applied. we present t, an old an and his son, you htink they take us seriously. You need a specific calnedar.

If he is not there. .

Set an agenda for the lighting thing. We will not set up this frank david company until the Stanford test is done. SO there is no reason to have another company until we get a validation of that. It's a go no go test. Then we move into action. Then we need to define their roles. What will Frank do? What will David do? David will go look for partners and DOE money.

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ARCTANGENT!

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TANGENT!

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New Venture Creation

Just take some notes from this book and be enlightened...

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What is entrepreneurship?

The process of creating or seizing an opportunity and pursuing it regardless of the resources currently controlled.

seize the way! lack of resources never stops a true entrepreneur...

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p339

Financing entrepreneurial ventures.

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Letter to Frank

Hi Frank!! Let's get moving on lighting even though you've got a contact at Applied because we are only one test away from a very appealing investment. After David sets up a Stanford experiment we will want to move fast to form a company around it... what would that look like and might we want to get investors on board right away to form the company and market our breakthrough?

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You Must Present A VENTURE To Applied.

Take a professional approach to selecting and presenting your venture to investors, lenders, and strategic business partners.

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OUR CASH BURN RATE

How much money we need depends on how fast we burn cash to get to our milestones, ok?

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RESOURCES

  • people: management team, board of directors, lawyers, accountants, consultants
  • financial resources
  • assets such as IP, plant and equipment
  • a business plan

    * a superior technology worth investing in

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Ok, sent that to dad

No gruffness, so he may be ok with it. Hope so, because that would get him focused on networking for the right movie here.

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The Cost Of Money

Let's say we get $5million right now. That is a fixed amount that will drip away over the next six months. Is that enough for us? Really? What expenses might we have other than salaries?

Anyway Money has a Cost and you must find a way to get Money at low Cost. Basically I see the Cost as a chunk of equity and we want it to be very small if possible because we want to conserve equity although we do want our investor to feel a real stake in our game so they pitch in and feel ownership.

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OWN THEM!

who owns and manages these resources for us?

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Ask yourself...

  • What resources are needed?
  • When is each resource needed?
  • How do we acquire the needed resources?

Entrepreneurs seek to use the minimum resources. Rather than own the necessary resources the entrepreneur seeks to CONTROL them.

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Ask for less?

  • financial exposure is reduced
  • dilution of the founder's equity
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Stages

Match critical milestones to capital infusions. These milestones are signals which say "it's prudent to keep going".

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MILESTONE CALENDAR

What are our milestones?

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reading

  • You want minimum commitment at each stage or decision point.
  • Lack of resources is a huge advantage forcing you to concentrate on selling to bring cash into the business.
  • How can we accomplish more with less to pursue this opportunity?
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Cost Of Opportunity Pursuit!

What will it cost for Applied to pursue this opportunity with us?

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reading

  • We have a serious venture opportunity we wish to launch.
  • We must illustrate how this works.
  • We have bult a brain trust for our venture.
  • Do a basic gap analysis and apply the Timmons model to the venture.
  • We can see Applied adding enormous value during the creation, launch, and building of this company.
  • We will spend many years helping Applied build this into a multibillion dollar sales bonanza.
  • Our entrepreneurial energy, promise and salesmanship will capture their interest, gain their confidence, and tap into their talent.
  • Happily, all of this comes together.
  • Applied will see considerable potential in our technology, in our team, and in our market potential.
  • We want them to join our board of directors.
    • We plan to surpass our projected milestones ahead of schedule.
  • We must assemble a brain trust that can add maximum value to your venture.
  • We know what we need to fill in the gaps that exist on our team.
  • We wish to know what we don't know.
  • We have the knowhow, experience and networks that have access to critical talent, experience and resources.
  • We must use Applied's resources in the startup and early growth stages of our venture.
  • Applied decisions center around how we can be acquired and financed as a resource.
  • We must seek out the best advisors and involve them thoroughly at an early stage.
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We don't really know what we need yet

Once resource needs have been determined and a team has been selected, we must get additional resources to enter the startup stage correctly.

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a BOARD of DIRECTORS

Venture capitalists always require boards of directors and that they be represented on the board. Who has missing relevant experience, knowhow and networks?

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we must focus on holes

What holes must we fill?

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