1. Keys to Financing the New Venture Alec Johnson, Ph.D. University of St. Thomas

4. The Problem - Objectives Minimize Cost Maximize Return Maintain Control Maximize Ownership Minimize Involvement Minimize Risk Entrepreneur Investor

23. Venture Capital Investments, Q2 2001 2.2% of Venture Capital invested in Midwest!

24. Timing – Sources of New Venture Financing* *Adapted from: Smith and Smith, Entrepreneurial Finance, 2000 IPO Venture Capital Banks/Lessors Angels/Partner Entrepreneur/ Friends/Family Exit Rapid Growth Early Growth Start-Up Development

31. The Big Picture – Business Plan Competitor Analysis Environmental Trends Customer Analysis Business Plan Functional Plans Pro formas Financing Evaluation-CMOPs

35. “ Everything should be made as simple as possible, but not more so.” Albert Einstein

42. Example 1: Brew on Premise $423 ($527) $32,703 367,085 (54%) Dane County, Wisconsin $449 ($585) $35,322 225,339 (52%) Boulder County, Colorado Median Rent (upper quartile) Median Income Total Population (% age 24-55)

48. Management Franchise Software, Medical Device, etc. Low High Moderate Granite Gear Level of Sophistication

49. Product Development Level of Complexity Franchise Software, Medical Device, etc. none high moderate Granite Gear

50. Time To Market Franchise Software, Medical Device, etc. short high moderate Granite Gear

51. Time to Profitability Franchise Software, Medical Device, etc. Short < 6 months High >24 months Moderate 9 to 18 months Granite Gear

52. Market Risk Franchise Software, Medical Device, etc. High Low Moderate Granite Gear Product Acceptance

53. Capitalization Franchise Software, Medical Device, etc. Low < $50,000 High > $2M Moderate $500K to $2M Granite Gear

59. The Big Picture Competitor Analysis Environmental Trends Customer Analysis Business Plan Functional Plans Proformas Financing Evaluation-CMOPs