International Biz-Tech Forum at the University of Washington

“It’s Not What You’ve Got, It’s What

You Use That Makes a Difference”--Zig Ziglar

Presented by Aaron Rose

“International Biz-Tech Forum

at the University of Washington”

Seattle, Washington

4 April 2015

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ROI3, Inc.

�ROI3's mission is to empower people in emerging economies with innovative, technology-based solutions.

�ROI3 creates applications, content and services for smartphone and tablet users in Asia, Africa, and Latin America.

�The focus of ROI3's products and services reside in English Language Learning, health, agriculture, small business management, and financial literacy.

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ROI3’s Global Plans

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Sub-Saharan

Africa

Southeast

Asia

Latin

America

Eastern

Europe

China

India

MENA

So, you want to become an

entrepreneur?

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ARE YOU CRAZY?!!

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Reasons to Become an Entrepreneur

1.Be your own boss

2.Be in creative control

3.Make a lot of money $$$$$$

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“American Entrepreneurship is Actually

Vanishing. Here's Why”

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Source: Inc. Magazine, April 2015 http://ow.ly/Lbe7F

Barriers of People Considering

Entrepreneurship

� I DON’T THINK I COULD RAISE ENOUGH MONEY – 48%

� I DON’T HAVE AN IDEA – 40%

� I’M DISCOURAGED BY THE HIGH FAILURE RATE OF BUSINESSES

– 22%

� I DON’T HAVE THE RIGHT SKILLS – 21%

� I WORRY ABOUT BALANCING BUSINESS AND FAMILY LIFE –

18%

� I’M WORRIED ABOUT TAXES AND REGULATIONS – 17%

� THE COMPETITIVE BARRIERS ARE TOO HIGH – 13%

� I DON’T THINK I COULD HIRE PEOPLE WITH THE SKILLS I NEED

– 7%

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Source: Inc. Magazine, April 2015 http://ow.ly/Lbe7F

High Rate of Startup Failure

� Out of 10 start-ups, 3 or 4 fail completely (investors loose all their money; company liquidates all assets);

� Another 3 or 4 return money to the original investment;

� 1 or 2 produce substantial returns.

� The National Venture Capital Association estimates that 25% to 30% of venture-backed businesses fail.

� “If failure is defined as failing to see the projected return on investment—say, a specific revenue growth rate or date to break even on cash flow—then more than 95% of start-ups fail… .”

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Source: The Wall Street Journal, Sept. 20, 2012 http://ow.ly/Lbgua

Work-Life Balance of an Entrepreneur:

Your work is your life

Your life is your work

Passion & Sacrifice, Passion & Sacrifice, Passion & Sacrifice, Passion & Sacrifice, Passion & Sacrifice, Passion & Sacrifice, Passion & Sacrifice, Passion & Sacrifice, Passion & Sacrifice Passion & Sacrifice,

Passion & Sacrifice…

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Is your idea a hobby or a business?

� Why you (your idea) and why now?

� Who are your customers?

� How will people know about you?

� How will you make money?

� How you retain customers, while at the same time, grow your business?

� How will you achieve and sustain profitability?

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Getting Naked with Your

Business Partners Early� Must have a shared vision for your (1)

product and (2) company

� Define roles for you and your business partners early -- including equity ownership

� Business structure: C-Corp, S-Corp, LLC?

� What happens to the business when a partner (or key employee) leaves?

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Entrepreneurship: Have a Plan1. Executive Summary

A. Company and Technology: Background, Goals and Strategic Direction

B. General Market Opportunity

C. Business and Revenue Model

D. Management Team

E. Investment Summary

2. Company Description

A. Mission

B. Objectives

C. Goals

i. Goal #1 is to provide exceptional customer service

ii. Goal #2 is to build a product or service of the highest quality

iii. Goal #3 is to build shareholder value

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Entrepreneurship: Have a Plan

3. Products and Services

A. Include the company’s intellectual property strategy:

(1) patents, (2) trademarks, and (3) copyrights

4. Market Analysis (including Competitive Analysis)

5. Marketing, Sales, and Distribution

6. Management and Organization

A. Management

B. Executive Team

C. Advisory Board

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Entrepreneurship: Have a Plan

7. Risk Factors

A. What are the risks to your company?

B. What are the risks to your business sector?

C. What are the risks to doing business in a

particular geographic area (e.g., China)?

8. Financial Plan

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Entrepreneurship

HAVE A PLAN

HAVE A PLAN

HAVE A PLAN

HAVE A PLAN

DID I SAY: “HAVE A PLAN?”16

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You Cannot Do It Alone

1. It takes a team

2. Surround yourself with people smarter than you

Intelligence of ROI3’s

Team

Aaron Rose

Rest of ROI3 Team

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ROI3 Team

18

Expectations for ROI3’s Team Members

�Understand and support ROI3's mission,

objective, goals, and business model;

�Be willing to learn new ideas and concepts;

�Be willing to teach new ideas and concepts;

�Be willing to express your opinion and support

it; and

�Be willing to make mistakes and learn from

each mistake.

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You are here

Leadership

1. COMMUNICATION;

2. Coachable;

3. Lead by example;

4. Knowing your strengths and weaknesses;

5. Always improve your skills;

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Leadership

6. Take responsibility for your actions;

7. Do not micromanage: Trust your

colleagues;

8. Give credit where credit is due;

9. Avoid criticizing, condemning, or

complaining; and

10. EXPECT RESULTS!!

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Financial Strategy

“If you do not know your numbers,

you do not know your business”

1. Projected Profit and Loss (P&L) Statement

2. Projected Cash Flow

3. Projected Balance Sheet

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Financial Strategy� What is the company’s timeline for operational and

financial milestones including break-even point and plans for sustained profitability;

� What are the company's operating expenses segmented by (1) sales and marketing, (2) general and administrative, and (3) research and development?

� What is the percentage of each segment as a percentage of revenue? In other words, what percentage of revenue will be spent on sales and marketing, G&A, and R&D?

� What is your cost of revenue (sales)? What is the percentage of cost of revenue as it relates to the company's gross revenue?

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Due Diligence Checklist

for Investing in a Business (1 of 6)1. General Corporate Compliance/Organizational Information

A. Review the articles of incorporation and bylaws of the company, and any/all amendments;

B. Review the minute book of the company;

C. Verify that the company is duly incorporated and in good standing in the state of its incorporation;

D. Verify that the company is qualified to do business in all states in which it transacts business;

E. Review all stock certificates and determine the number and type of the authorized and issued shares of stock of the company and the registered owners of the issued and outstanding shares;

F. Determine whether there are options, warrants, or other rights to acquire shares outstanding;

G. Review stock transfer records of the company;

H. Review all agreements between the company and its shareholders; and

I. Review securities law filings under state and federal securities laws.

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for Investing in a Business (2 of 6)2. Financial and Tax Information

A. Review the financial statements, balance sheets and income statements of the company, including all profit and loss statements for the current year and the past five years;

B. Review all budgets, business plans, projections and management reports prepared by the company within the past five years;

C. Review the company’s accounts payable, including their quality, aging and composition, and determine if there are any disputed accounts;

D. Secure credit reports;

E. Review any forecasted income statements and balance sheets, if available, for both the current and following fiscal years, or for such periods as forecasts have been prepared, and the assumptions upon which the forecasts are based;

F. Review company’s pricing policies and compliance;

G. Review company’s inventory valuation, turnover and obsolescence review;

H. Determine whether the company has any secured financing, including accounts receivable or inventory financing, and review all documents associated with that financing;

I. Review and create a list of names and locations of all banks utilized by the company including full information on the types of accounts and the names of persons authorized to draw thereon;

J. Review all bank loan agreements;

K. Review all federal, state, and local income tax returns of the company for the past five years;

L. Obtain copies of property tax assessments for the past five years;

M. Communications between the company and the IRS, including, without limitation, audit and revenue agent’s reports (federal, state and local); settlement and consent documents and correspondence; and agreements waiving statute of limitations or extending time; and

N. Copies of documents relating to IRS or state tax proceedings, deficiencies assessed, or audits commenced.

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for Investing in a Business (3 of 6)3. Employment and Labor Matters

A. Obtain a list of the company’s employees, their job classifications, compensation, and length of employment;

B. Review all employment agreements;

C. Review all indemnification contracts or similar arrangements for officers and directors of the Company;

D. Review all of the company’s employee benefit plans, including retirement plans, pension plans, profit-sharing plans, deferred compensation plans, health insurance, and other employee health and welfare plans;

E. Review all documents relating to employee stock option plans, incentive stock option plans, employee stock purchase plans, stock bonus plans, salary bonus plans and any other benefit plans or arrangements;

F. Review the company’s personnel manual and all documents furnished to employees in connection with their employment;

G. Review the current and proposed organizational structure of the company;

H. Determine whether there are any claims by employees or government agencies, or investigations, pending against the company arising out to employment matters, including discrimination claims, grievances, arbitration cases, workers’ compensation cases, OSHA cases, labor disputes and similar matters;

I. Review the company’s relationship with independent sales agents and other independent contractors with whom the company deals on a regular basis;

J. Review all collective bargaining and union agreements to which the company is a party; and

K. Review any copies or schedules of contracts, plans, or arrangements regarding election or termination of directors and officers.

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for Investing in a Business (4 of 6)4. Business Contracts and Commitments

A. Obtain a list of the company’s major suppliers, the goods or services supplied, and annual dollar volume of business with the company;

B. Review copies of all agreements between the company and its major suppliers;

C. Obtain a list of the company’s major customers, the goods or services supplied, and annual dollar volume of business with the company;

D. Determine whether there are currently, or have in the past been material disputes between the company and its suppliers or customers;

E. Review all agreements pertaining to the marketing and distribution of the company’s products or services, including all agreements with independent sales representatives, distributors, marketing companies and franchisees;

F. Review all material agreements with customers, including warranties provided to customers;

G. Review all installment sales agreements;

H. Review all forms of sales invoice, purchase order, receipt, agreements, and other sales documents used by the company;

I. Review documents describing the company’s products or services such as promotional literature, brochures, and newsletters;

J. Review copies of any license or royalty agreements;

K. Review any sale-leaseback arrangements; and

L. Note any membership agreements or other relations with trade associations.

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for Investing in a Business (5 of 6)5. Intellectual Property

A. Review all material license agreements relating to intellectual or intangible property running to and from the company;

B. Create a list of all patents, trademarks and copyrights held by or licensed to the company;

C. Review all documents relating to patents and trademarks including filings with U.S. Patent and Trademark Office;

D. Note any policies and procedures relating to identification and protection of trade secrets and other confidential information developed by the company and/or disclosed to the company under a covenant of nondisclosure;

E. Review the technological infrastructure of the company, including: proprietary hardware, software systems, and networks; all leased, purchased, or shared hardware, software systems, and networks; all interconnecting hardware, software systems, and networks’; environmental systems, including vaults, alarm systems, elevators, and telephones; and

F. Review sales contracts for hardware and software systems, including warranty provisions, licensing agreements, operating agreements, maintenance and service contracts, consulting agreements and other strategic business relationships pertaining to data processing and information technology.

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for Investing in a Business (6 of 6)6. Equipment and Personal Property

A. Obtain a list of all machinery, equipment, furniture, and fixtures owned or leased by the company and depreciation schedules and leases;

B. Review any installment purchase agreements;

C. Review service contracts on tangible personal property of the company;

D. Obtain an inventory list, including category and aging information;

E. Review the company’s accounts receivable records, including age, composition and write-off history;

F. Review information about the company’s trade secrets and evaluate the company’s trade secret protection program; and

G. Obtain a search of appropriate state and local records for U.C.C. financing statements and other evidence of liens or encumbrances.

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Entrepreneurs Need to Stop These

10 Things, Right Now

1. Lying to yourself or others about your

traction;

2. Focusing on too many things at once;

3. Working yourself to death;

4. Following shiny objects (opportunistic);

5. Building terrible “lean” products;

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Source: http://www.entrepreneur.com/article/243324

Entrepreneurs Need to Stop These

10 Things, Right Now

6. Using the word “I”;

7. Building companies with no revenue;

8. Asking investors to sign non-disclosure

agreements;

9. Thinking that you are the only company in

your space; and

10. Building photo sharing and mobile dating

apps.

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The Do’s and Don’ts

of the Modern Résumé� 1 in 4 HR managers receive 50 résumés per

job listing

� 1 in 10 HR managers receive 100 résumés per job listing

� What are HR managers looking for?• 77% - relevant experience

• 48% - specific accomplishments

• 41% - résumé was customized to the open position or not

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The Do’s and Don’ts

of the Modern Résumé

� HR managers also look for KEYWORDS in résumés:

• 56% - problem solving

• 44% - leadership

• 40% - oral and written communication

• 33% - team building

• 31% - performance & productivity improvement

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Résumé� Most hiring managers will spend less than

30 seconds looking at your résumé

� Your résumé is poorly-constructed if I have to “read” it

� Okay to have 2-page résumé

� Résumé should be consistent with your LinkedIn profile

� Yes, I look at your LinkedIn, Facebook, Twitter, Weibo pages

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Résumé1. Qualifications (including technical and

language skills)

2. EducationA. Do not include GPA

B. Do not include high school attendance

3. ExperienceA. Do not exceed 3 to 5 bullets per section

B. If possible, provide quantifiable results of

your job responsibilities.

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News Sources

�China Law Blog (www.chinalawblog.com);

�The Economist (www.economist.com);

�GeekWire (www.geekwire.com);

�Mobile World Live

(www.mobileworldlive.com);

�Nightly Business Report (www.nbr.com);

�PBS NewsHour (www.pbs.org/newshour); and

�Tech in Asia (www.techinasia)

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International Biz-Tech Forum at the University of Washington

Business

Transcript of International Biz-Tech Forum at the University of Washington