The document provides an overview of how to build a successful company from coming up with an idea, building a team, setting up the business, financing, growing the business, common mistakes, and participating in the University of Colorado's New Venture Challenge program. Key points include passionately pursuing an idea that scratches your own itch, seriously vetting the competition and market potential, setting up proper legal and intellectual property structures early, bootstrapping and being frugal with financing, constantly validating assumptions and focusing on customers, and leveraging resources like mentors and workshops through the New Venture Challenge.

1. 0 How to Build a Company January 13, 2010 University of Colorado’s New Venture Challenge Jason Mendelson, Co-Founder and Managing Director Foundry Group; Chair, Silicon Flatirons Entrepreneurship Initiative ©2009, Foundry Group LLC, Proprietary and Confidential

2. Agenda The idea of this presentation is to give you an all-purpose summary on company building. The workshop presentations later this semester will dive into all of these subjects and more in depth How to come up with the right idea for you to pursue Building a team Setting up the business Getting financed Growing a business Operating a business Common mistakes people make PLEASE INTERRUPT ME. Chances are that you are less boring than I am 1 ©2009, Foundry Group LLC, Proprietary and Confidential

3. How To Do It ©2009, Foundry Group LLC, Proprietary and Confidential 2

4. The Idea Pick something that you are passionate about. I mean REALLY passionate Building a company is tough. If you aren’t in love with your idea going in, you are hosed If you aren’t scratching your own itch, you probably don’t have a great idea Make sure that you are “market,” though Consider the competition. Most people skip this step “We are different” Are you really? Assume adjacent companies move toward each other. Well funded “non-competitors” usually are 3 ©2009, Foundry Group LLC, Proprietary and Confidential

5. The Idea Is a “non-competitor” really a competitor? Facebook – generic social network. You decide to create one targeted to musicians / soccer moms, etc. Competition might not be Facebook, but the time allocated to social networks by your customers. They only have so much. Plus, FB can quickly move to compete, if need be Can you make money from it? (and the answer isn’t “advertising”) When you talk to your friends, do they get excited about it? (If you don’t have any friends, then you have other issues that I can’t help you with) Make sure you don’t have “technology in search of a problem” Seriously vet your idea. Remember, people’s incentives are to say “go for it” – it’s not their time and money being wasted 4 ©2009, Foundry Group LLC, Proprietary and Confidential

6. Building a Team Find a partner (if you can’t, there might be a larger problem) Find mentors/advisors (Boulder is great) Don’t get taken advantage of Be self aware. It’s much more attractive than confidence Learn to keep people engaged 5 ©2009, Foundry Group LLC, Proprietary and Confidential

7. Setting up the Business Incorporate? LLC versus C-corp Get your Intellectual Property in order Get your employment situation in order Watch out for oral promises (yes, you can have an oral contract) You get what you pay for with lawyers, but there are tons of resources in Boulder Use resources like BDNT, BOCC, ELC, Crash Courses, the Bunker to learn more. Knowledge is power 6 ©2009, Foundry Group LLC, Proprietary and Confidential

8. Financing Don’t assume that you are going to raise funds Do you need financing? The earlier you finance the more of the company you will give up Be greedy! Angel versus VC Executive Summaries versus Business Plans. What makes good ones? Your exec summary is critical Business plans are for you 7 ©2009, Foundry Group LLC, Proprietary and Confidential

9. Growing and Operating a Business Constantly check your assumptions. Is your idea still compelling? Make sure what you are building will scale Be customer focused. Be insane about customer experience Don’t be afraid to get help. You don’t know everything Find smart tech guys / work in the cloud Always think about how you will make money. Even Twitter had a plan…. Try to leverage others’ platforms / networks if you can Be really stingy in hiring non-tech people 8 ©2009, Foundry Group LLC, Proprietary and Confidential

10. Some Common Mistakes Not taking the set up process seriously enough Employment IP Contractors versus employees Not picking the right team. Your first 4-6 hires will determine your fate Getting ahead on expenses – hiring ahead of revenue Keep the team lean and expect some pain. This is good pain Cash is massively valuable. Treat it as such Being a crappy fundraiser 9 ©2009, Foundry Group LLC, Proprietary and Confidential

11. Some Common Mistakes Not knowing when to quit. Failure isn’t always failure Screwing up your one chance at good press Overpromising and under delivering Getting “Tech Crunched” Not having proper alignment with the management team Get away / offsites Vesting Thinking marketing and advertising will save you 10 ©2009, Foundry Group LLC, Proprietary and Confidential

12. Summary Seriously, it’s really that simple So have fun. ☺ 11 ©2009, Foundry Group LLC, Proprietary and Confidential

13. Questions and Answers Q&A 12 ©2009, Foundry Group LLC, Proprietary and Confidential

14. CU NVC: why participate? Entrepreneurial Launch Pad: nothing like doing it; support through workshops and Crash Courses Mentors: connect to area’s entrepreneurs Interdisciplinary experience “Intent to Compete” forms are due January 20 (necessary for mentor assignment) 13

15. Upcoming Events Workshop-Your Business Concept: Product and Service Offering, Page Moreau Wednesday, January 20, 2010 – ATLAS 100, 6pm Workshop-Your Market: Connecting with your Customers, Tom Keller Wednesday, January 27, 2010 - ATLAS Building, Room 100, 6:00PM Crash Course: Intellectual Property for Entrepreneurs Wednesday, February 3, 2010 - Wolf Law Building, 6:00PM Workshop-Selling your Product: Reaching Your Customers, Erick Mueller Wednesday, February 10, 2010 - ATLAS Building, Room 100, 6:00PM Workshop-Making Money: Finding Economic Sustainability, Frank Moyes Wednesday, February 17, 2010 - ATLAS Building, Room 100, 6:00PM Workshop-Pitching and Selling Your Business Plan, George Deriso Wednesday, February 24, 2010 - ATLAS Building, Room 100, 6:00PM Business Plans DUE Monday, March 11, 2010 Finalists and Wild Card Selected Friday, March 5, 2010 14

17. Goldstone Partners

18. Gravity Cycles (not on flier)

19. LogRhythm

20. myUsearch.com

21. Rebit

22. RecordNexus

23. TravelFli

24. Zayo Group

25. Form a team to compete in the CU NVC!