Contents

1. UCI BPC Workshop ”Successful Teams in Start-up Enterprises ”John Creelman (UCI BA ‘79, MBA ‘89)January 15, 2013

2. Contents • My background. • Attributes of successful teams in start-up enterprises. • Practical application to BPC. • Q&A

3. My background “Mature” Companies • Western Digital Corporation (5 years): • Corporate, treasury and operations finance – Public Company • MTIC (2 years): • Corporate, treasury and operations finance - Private Company. • IPO in 1994 Emerging Growth Companies • CFO for 7 Venture backed start-ups (19 years): • Who: Elemental SW, Copper Mountain Networks, VSK Photonics, Active Network, ID Analytics, PowerGenix Systems, RainTree Oncology. • What: Web development SW, professional services, telecommunications equipment, semiconductors/photonics, SAAS, energy storage, health care services. • The environment: constant change, under-resourced, dynamic and hyper competitive markets, new business models, constantly fund raising.

4. Attributes of Successful Teams • The team has a designated leader. • The team has a credible blend of skills to succeed. • The leader has a process for constructive internal debate and for decisive decision making. • The team adapts and changes over time.

5. Key Attribute #1 • The team has a designated leader. • Being the CEO / leader is the hardest job. • Democracy works well in politics but not in start-ups. While you need internal debate, ultimately someone has to be tasked with making the hard decisions. • Success will be tough if team does not have one designated leader. • Part of leadership is clarifying roles (and ownership): • Agree upon roles and essential competencies. • In most cases, agreeing what you won’t do is also important. Focus, focus, focus……. • Structure the ownership / equity / compensation.

6. Key Attribute #2 • The team has a credible blend of skills to succeed. • Investors fund 2 things: “the idea” and “the right team”. • The composition of “right team” changes over time. • Titles matter. Extreme example: don’t have a CEO and a President and a COO. • Some skills can be provided by advisors and Board members. • Don’t apologize for what your organization lacks, acknowledge gaps and have a plan to address them.

7. Key Attribute #3 • The leader is skilled at fostering internal debate and driving to resolution: • Core values here are critical: • Intellectual honesty. • Respect. • Listening. • Humility. • When the debate is over, if there is not pure consensus the leader makes the tough decision and creates consensus.

8. Key Attribute #4 • The team adapts and changes over time. • Adaptation means changes in roles, organization structure, process, systems and tools. • Adaptation is a dynamic process it starts on “day one”. • The faster the pace, and the greater the challenges the more essential adaptation is. • Supplement internal team with advisors, technical advisors and Board of Directors. • The team also modifies and tailors its message to fit the environment and constituents.

9. Practical Application to BPC • Teams with a clear leader will be viewed as being more grounded and decisive. • Initially, focus on the essential skills of the core team: • Supplement with advisors and BOD members • Acknowledge which skills you lack and communicate the plan to remedy the gaps • Develop a culture which fosters healthy debate: • Ask yourselves questions that outside investors would ask. • Talk about the tough decisions with investors • The team should always have a sense of the adaptations and challenges that it faces (“what keeps you up at night?”)