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9:00 - 9:45
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The Venture Capital Process
Mark Cameron White, White & Lee LLP
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9:45 - 10:15
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A Roadmap to the Venture Community
John Gabbert, VentureOne Corporation
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— 15 Minute Break —
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10:30 - 11:15
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Mainstream Venture Firms
Scott Sandell, New Enterprise Associates
Erik Straser, Mohr, Davidow Ventures
Daniel. H. Ahn, Woodside Fund
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— 15 Minute Break —
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11:30 - 12:15
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Professional Angel Funds
David Adams, Angels Breakfast Club
Jefferson Lilly, Springboard Angels
Mike Pogue, BayAngels
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— 30 Minute Lunch Break —
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12:45 - 1:30
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Corporate Investors - Giving Credibility to the Technology Startup...
John Bonazzoli, Compaq
John Cooper, Microsoft Corporation
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1:30 - 2:00
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Successful Incubator Companies - From Initial Funding to IPO
Jim Robbins, Software Business Center & Panasonic Internet Incubator
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— Mark White of White & Lee LLP.
I intend to (a) provide my perspective on the current financing environment in the Silicon Valley: the types of companies I see getting funding and from what sources, (b) present the capital structure of an early stage company immediately prior to the intial seed financing, and identify other "founder issues" that should be addressed prior to presenting the Company to investors, (c) review valuation parameters for early stage companies, staging financings to maximize value, and the tradeoffs of maximizing valuation, control, and investor resources, (d) provide a general comparison of VC, angel and strategic investors, and how (or if) they can co-exist in the same company, (e) give a general overview of the venture capital financing process and timing, (f) review the legal documentation used in venture-backed financings, the critical issues seen from the perspective of the Company and investors, and (g) present a comparison of documentation used with angel and non-VC investors.
— John Gabbert of Venture One.
I’d like John to provide a roadmap through the venture capital community, addressing (a) general trends in 1999 into 2000 on how the venture community is changing with the rapid formation of new firms and influx of new money, (b) how venture firms might be ranked, examples of which firms are in the 1st, 2nd and 3rd tiers – and why, (c) what is the profile of companies that are being funded, and how has that changed in the past year, (d) what is the range of funds being raised in the 1st, 2nd and 3rd round – and what are the valuation parameters, (e) what are the technology sectors that seem to now attract the most money, and can John provide his thoughts on where venture money will be going in 2000, and finally (f) where are the good sources of information on what funds invest in what type of companies, at what stage of maturity and at what valuations. On this last point, John should describe how Venture One works, what reports entrepreuners can purchase, how these reports are structured, and what do they cost. What other organizations provide customized reports.
This will be a panel of established, first-tier venture capital firms that actively fund early stage technology startups in the Silicon Valley. The three panelists will have 15 minutes each to briefly talk about their firm, to identify recent investments their firm has made that exemplify what they look for in technology startups, current financing trends or developments they see in the Valley, and how their firm is reacting, or positioned, relative to these trends. Also, each panelist should distinguish his own firm, briefly addressing the number of seed financings they expect to complete in 2000, the average size 1st-round investment, and how a young company can get an introduction to the firm and be noticed. In addition to these general topics, I would like Scott, Erik and Daniel to separately address the following:
Speaker One: Scott Sandell of New Enterprise Associates.
I'd like Scott to address (a) how VC's, in general, determine the valuation of early-stage companies, (b) how valuation parameters have changed over the past year with the increased size of funds under management, time to market issues, and the back-end success of many internet and network switching companies at the time of their IPOs, (c) the most critical milestones in determining valuation, and (d) how firms weigh and tradeoff valuation against the other resources they believe they bring to young companies.
Speaker Two: Erik Straser of Mohr, Davidow Ventures.
Erik should focus his remarks on (a) what size market potential VC's like to see in portfolio companies, (b) how entrepreneurs should support the existence and size of the market, (c) whether reference customers and strategic partners are needed for most 1st stage venture backed financings, (d) what kind of revenue growth and over what period of time do venture firms like to see in early stage companies, (e) what business and revenue models are most credible for internet companies, and (f) is the venture investor preference for business-to-business product and service companies over content/consumer/retail companies now changing with the need for many internet e-commerce, portal and destination sites to develop new content to attract and grow their user communities?
Speaker Three: Daniel H. Ahn of the Woodside Fund.
I'd like Daniel to (a) briefly compare the relative interest venture investors have in internet market maker companies, application service providers, infrastructural support companies and content/portal websites, (b) how internet startups should position their service to be credible, (c) examples of technologies and net-based services that Daniel would like to see more of, and (d) examples of technologies that Woodside Fund has recently seen that are “ahead of the curve” and won’t get funded until markets further develop.
This panel will focus on angel investing as an alternative to financing from established venture capital firms. Dave, Jefferson and Mike will each have 15 minutes to give their own perspective on the following (a) how sophisticated angels in the Silicon Valley differ from VC's, and where angels might be more appropriate for a company than a venture capital firm, (b) trends in angel investing in the Valley, and why angels are becoming more visible and more aggressive in getting deals, (c) what resources angels bring to young companies that VC firms do not or cannot, and (d) how angels counter the "deep pockets" issue for providing companies with ongoing access to capital for growth. In addition to these general points, I'd like Dave, Jefferson and Mike to each specifically address the following:
Speaker One: David Adams of the Angels Breakfast Club.
Dave should (a) generally introduce the ABC, how the Club finds its deals, and what type of companies it is funding, (b) how the Club distinguishes itself from other angel groups in the Valley, (c) the size of the funds managed by the Club, and plans for future growth, (d) who are the investors in the Club, and in what ways do they support the companies in which they invest. Of particular interest is (e) how the Club works with the venture capital community (ie. does the Club compete or cooperate with VCs in 1st round investments) and (f) how does the Club value companies as compared to venture capital investors.
Speaker Two: Jefferson Lilly of Springboard Angels.
Springboard Angels is a bit different from other funds in several respects, each of which I'd like Jefferson to address, including (a) who the members of Springboard Angels are, and as many members are not accredited, whether and how Springboard participates in accredited rounds, (b) the management structure of Springboard, and how that structure was designed to filter deals and better support portfolio companies, (c) how the Springboard information exchange bulletin boards work — how useful this has been in providing resources to startups — and whether these information exchange bulletin boards are open to persons who are not members of, or to companies that are not funded by Springboard Angels, and (d) what new plans does Springboard have in the works for 2000.
Speaker Three: Mike Pogue of BayAngels.
Like the other panelists, I'd like Mike to distinguish BayAngels from other professional angel funds, to talk a bit about what type of companies BayAngels has funded this past year, how large these investments were generally – and in what valuation range. More particularly, as an angel group based in Marin County, I'd like Mike to address whether BayAngels, in his view, is seeing and supporting technology startups that are in any way different from startups based in the Silicon Valley – and whether companies must be based in the North Bay, or focus on certain technologies, to be considered for investment.
— Les Vadez of Intel Corporation and John Cooper of Microsoft Corporation.
This panel, consisting of corporate development officers from Intel and Microsoft, should generally compare the investment needs of corporate partners to those of strictly financial investors. Les and John will each have 15 minutes for their remarks, followed by 15 minutes of questions. Both Les from Intel's perspective, and John from Microsoft's perspective, should be prepared to discuss the following: (a) what are their strategic needs, what kind of companies are they investing in, and what percentage equity interest do they require in its early-stage investments, (b) how large is their fund, how is it managed, and what is the process and timeline they follow in making investments, (c) what are the customary commercial/strategic relationships that they put in place with companies in which they invest, (d) how do they feel about financial investors, are they comfortable setting valuation or do they want financial investors to do this, (e) are there any special voting rights, Board representation, or other control requirements that they have in their portfolio companies, and (f) what technologies do they find particularly interesting. Both Les and John should address how companies that are interested in both a strategic and equity relationship can introduce the idea without losing credibility – and what are the proper channels for doing this. Finally, Les and John might comment on and provide a short list of which competitive companies they do not want to see as investors or partners in early-stage companies in which Intel or Microsoft are considering for a strategic investment.
— Jim Robbins, Executive Director and founder, Software Business Cluster, & Panasonic Internet Incubator
Jim, the final speaker, will have 30 minutes to discuss the torrid growth in the formation of new incubators, and how they work with young companies in the Silicon Valley. Specifically, Jim can comment on (a) the trends in the formation of incubators, how these incubators are structured and what kind of support and services they provide, (b) what are the prominent incubators in the Valley, and how are each of them distinguished, (c) is there a difference between incubators associated with venture capital funds, and stand-alone incubators, and what kinds of companies do they each work with, (d) what is the fee or equity arrangements incubators require of companies, and (e) how do incubators select the companies they work with.
