Innovate or Perish: Managing the Enduring Technology Company in the Global Market

Step by Step, Deal by Deal

Another way to look at this issue is managing for success one deal at a time. In our fund, we manage deals by constantly evaluating and balancing the various risks inherent in early stage investing.^[14] These risks are inherent in the key elements above and for start-up companies, regardless of their location, include:

^[14] Willey, Teri F., and Churchwell, Thomas L. “Finding Untapped Potential,” in Life Sciences Venture Capital: Leading Venture Capitalists on How to Find, Manage, and Exit Successful Investments in Life Sciences Companies (Inside the Minds) (Boston: Aspatore Books, 2005).

1. Management risk. Is there management in place or can you find it? What are the management risks, and how will they be addressed? Furthermore, what is the stage of board development? What are the governance risks, and how will they be addressed?

2. Market risk. What’s the addressable market, and how do you get to it? What are the risks in getting there, and how will they be addressed?

3. Financing risk. How much time and how many dollars will it take to get to each financable milestone? Where will the money come from, and how will risks (not having the dollars to get to the next step up) be managed? More immediately, is there a cap table suffering from infinite weirdness that will deter financing in the first round, and, if so, how does it get fixed?

4. Technical risk. How far along is proof of principle? Is it a scientific, technical, or commercial proof of principle? How much time ...