"ten lessons from pinnacle" by ajay chopra
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From idea to success: The Pinnacle Systems Story: From start to $350 million and a successful exit. By Ajay Chopra, Venture Consultant - Trinity Ventures and Founder - Pinnacle SystemsTRANSCRIPT
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Ajay ChopraTrinity Ventures
3000 Sand Hill RoadMenlo Park CA 94025
www.trinityventures.com
Ten Lessons from the Pinnacle Experience
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A brief history of Pinnacle Systems Founded 1986; Series A
Media authoring and delivery tools FCS 1987; Series B 1989 Series C Failed IPO 1992 IPO 1994; Secondary offerings 1995/96 Acquired 20+ entities 1996-2003 Sold to Avid Technology in 2005
$462M cash and stock
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Lesson #1:Building a Company is a marathon
Average run to IPO: 7 years Plan to enjoy the “journey” not the
“destination” Success in determined by execution focus,
team and value system
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Lesson #2:“What’s the heading, Captain?”
Always know the heading Execution starts with leadership! Focus on leading; hire to manage
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Lesson #3:Everybody’s money is not equally green
Find the right investor match Make sure goals are aligned
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Lesson #4:Cut your losses!
Do not throw good money after bad Nothing wrong with being frugal! Define unbiased metrics for success and
failure Good enough is usually not!
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Lesson #5:Do not let the competition control your profitability
Continue to define your “blue ocean” But do not underestimate your competition
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Lesson #6:Technologies can take discontinuous steps but markets evolve slowly
Develop to technology evolution Plan to market evolution
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Lesson #7:When the market reaches the inflection point, BE READY!
More start-ups get upstaged by new competition at the market inflection point than anywhere else
Keeping tabs on the “convergence” factors
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Lesson #8:The soul of the company is its value system
Intellectual honesty Leading by example Fairness Culture of excellence
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Lesson #9:You are known by the company you keep
Investors/Bankers Board members Auditors/Lawyers Customers
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Lesson #10:Do not take yourself too seriously!
Remember to make the experience fun Find fulfillment in the journey Keep things simple Choose your battles
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Bonus slides!
Matching with the right Venture Fund
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Is your space an area of interest for the VC? Does the VC have expertise in the
space your company is focused VCs are well connected – will find an
expert – including another VC
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Fund investment preferences
Geographical Deal stage Min-max investment profile Percentage ownership requirements
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Fund investment cycle
When was the last fund raised? How many investments have been
made? How much “dry powder” is left?
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Portfolio conflict?
Is this portfolio company an active investment?
Was it (or is it) a good investment? Too much concentration – portfolio
diversity? Direct competitor?
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Are you in fact ready for VC money?
Only one shot with most VCs Crisp story in 40 minutes – 15 slides Team, Technology and TAM Unfair advantage
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And a final quote…..
Entrepreneurship is “converting creativity and mental energy into wealth”- Narayana Murthy