Forming a Company

This presentation was given to an Integrated Circuit Engineering class (ECE 347 at the University of Illinois at Chicago) during the Spring of 2016 semester.

Transcript

1. Forming a Company Ramsin Adamz, Akash Mehta, Roy Moran, Daniel Poarch, Pranav Rao
2. Value for Engineers • Control your own destiny • Take your own risks and reap the rewards • Challenge yourself / Follow your passion • Feel pride in building something of your own
3. Start with the Idea • What is a current problem in our society you can solve? • Ask yourself, what’s next? • Do something about what bugs you • Make a cheaper version of an existing product/service • Talk to people • Play the mix and match game
4. Find a Market • How big is it? How fast is it growing? Where will it be in the next 10 years? • Getting the word out! • No product market fit = No business worth investing in
5. The Business Plan • Executive summary sufficient until exploring funding • Business Plan include: ◦ Vesting ◦ Business Objectives ◦ Mission Statement ◦ Keys to Success ◦ Industry Analysis ◦ Market Analysis ◦ Competitor Analysis
6. Business Plan Continued • Business Plan includes: ◦ Strategies ◦ Marketing Plan ◦ Management ◦ Organizational Structure ◦ Operations ◦ Break-even Analysis ◦ Financial Requirement
7. Build a Team • Build the RIGHT team for business success - working alone not recommended • 3 main steps ◦ 1. Have an honest conversation about skills you lack ◦ 2. Find people who believe in your idea ◦ 3. Set clear expectations and goals
8. Talk Equity • Equal split with exceptions • Vesting with 1 year cliff
9. Pitching • One of the most critical moments for any entrepreneur • Keep it short and easy to understand • Talk facts talk money • Business model • Competition • Revenue • Connect the dots • Have a demo if possible • Have an elevator pitch ready
10. Build a Product • Research • Build prototype solution • Testing and Feedback • Market Testing • Launch!
11. Find Funding • Your bank account • Family and friends • Grants=free money • Contests • Crowdfunding • Angel-investor • Trade equity(Shark Tank) • Prepare yourself not just the idea • Loan
12. Grow • Focus on product/market fit • Retention First then growth • Delegate • Get attention • Use press, Social media and professional network • Change your pitch • Create timeline for achievements • Partnership • Marketing
13. Find a Lawyer The easy answer: http://www.findlaw.com
14. Find a Lawyer 1. Lawyers are specialized. a. Just because your friend is a lawyer, does not mean he knows anything about the type of law that you need assistance on. b. Find a specialist whenever possible that has experience in the issue at hand.
15. Find a Lawyer 2. Referrals are a good way to start the process of finding a lawyer, but you can do your own research as well. a. Google the issue, google for regional firms. b. Find lawyers or firms that have written on the subject. c. Talk to people in your situation, ask mentors, etc.
16. Find a Lawyer 3. There are a number of different fee structures now, from fixed fees to hourly to “other”. a. Work to find what is best for you. b. Note, however, that you get what you pay for. If cost is your biggest issue and you are paying bargain basement prices, be prepared for less than tailored service.
17. Hire and Fire Hire: People who complement your own skills, the Go-Getter, the Problem Solver, the Strategist Essentially, you want to hire people that have the potential to start their own company. Fire: Negative people, they don’t fit in with what your company is setting out to achieve. Also fire people that don’t adjust well to the company culture.
18. Business Ethics 1. Ethical start-ups recognize the ethical dilemmas that surround them in the first few months. 2. Ethical start-ups make ethics a core value of the enterprise. 3. The ethical entrepreneur finds early opportunities to make his or her ethical commitment real. 4. The ethical entrepreneur anticipates the ethical tensions in day-to-day decisions. Kirk O. Hanson https://www.scu.edu/ethics/focus-areas/business-ethics/resources/a-good-start/
19. Business Ethics (continued) Kirk O. Hanson https://www.scu.edu/ethics/focus-areas/business-ethics/resources/a-good-start/ 5. The ethical entrepreneur welcomes ethical questions and debates. 6. The ethical entrepreneur is watchful for conflicts of interest. 7. The ethical entrepreneur talks about the ethical values all the time. 8. The ethical entrepreneur weeds out employees who do not embrace the ethical values of the company. 9. 9. The ethical entrepreneur looks for opportunities to engage the company in the community.
20. Business Ethics (continued) Kirk O. Hanson https://www.scu.edu/ethics/focus-areas/business-ethics/resources/a-good-start/ 9. The ethical entrepreneur looks for opportunities to engage the company in the community. 10. The ethical entrepreneur takes stock occasionally. 11. The ethical entrepreneur renews the commitment to ethical behavior
21. Business Future 1. Read. A lot. a. New York Times b. Wall Street Journal c. Financial Times d. The Economist e. Foreign Press (Guardian, Der Spiegel, Le Monde, etc.) 2. Watch “Silicon Valley” 3. Network with competitors, vendors, and clients constantly to stay on top of the market. Never take anything for granted. a. (See: Nokia, Blackberry, Microsoft, Steve Jobs in 1985 and 1996)
22. Business Future 4. Plan for failure a. Practical: i. Make sure all IP is in safe hands ii. Have a financial strategy iii. Isolate your personal life from the business iv. Environment: Preempt financial markets and conditions b. Reinvent: i. If our big product fails, does it have other utility, or is it a one-trick pony? ii. Assets: Real Estate, IP, divisions. Are they a cost or a benefit? iii. Market analysis, what have you missed, what have misjudged, are there better opportunities
23. Business Future 5. Plan for success a. Practical: i. Make sure all IP is in safe hands ii. Have a financial strategy iii. Isolate your personal life from the business iv. Environment: Preempt financial markets and conditions b. Reinvent: i. If your big product succeeds, does it have other utility or is it a one-trick pony? ii. Assets: Real Estate, IP, divisions. Are they a cost or a benefit? iii. Market analysis, what have you missed, what have misjudged, are there better opportunities
24. Resources • Startup Playbook ◦ http://playbook.samaltman.com • Why Startups Should Focus on Sales Not Marketing ◦ http://blogs.wsj.com/accelerators/2014/06/03/jessica-livingston- why-startups-need-to-focus-on-sales-not-marketing/ • Incorporation Services ◦ https://www.clerky.com/ • How to Get Startup Ideas by Paul Graham ◦ http://paulgraham.com/startupideas.html • Startup = Growth by Paul Graham ◦ http://www.paulgraham.com/growth.html
25. Resources (continued) • Product Market Fit by Sean Ellis ◦ http://www.startup-marketing.com/the-startup-pyramid/ • Equity Basics ◦ http://thestartuptoolkit.com/blog/2013/02/equity-basics-vesting- cliffs-acceleration-and-exits/ • Co-Working Spaces in Chicago ◦ http://www.1871.com/ ◦ https://cie.uchicago.edu/ • Pitching Events in Chicago ◦ http://technori.com/pitch/ • Startup Challenge at UIC ◦ http://ies.uic.edu/faq/
26. Resources (continued) • If, Why , and How Founders Should Hire a “Professional” CEO ◦ https://www.linkedin.com/pulse/20130123161202-1213-if-why- and-how-founders-should-hire-a-professional-ceo • Y Combinator Most Prestigious Accelerator for Startups ◦ http://www.ycombinator.com/ •