Value Drivers and the Entrepreneur’s Dilemma
14
Value Drivers and the Entrepreneur’s Dilemma Frank J. Graziano Managing Partner September 21, 2010 Monmouth Venture Partners presents to the
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From a talk I gave to the Venture Association of New Jersey about the challenges of growing a business.
Transcript of Value Drivers and the Entrepreneur’s Dilemma
Value Drivers and the Entrepreneur’s Dilemma
Frank J. Graziano Managing Partner
September 21, 2010
Monmouth Venture Partners presents
to the
Helping Exceptional Companies Realize Their Full Potential 2 Monmouth Venture Partners
Do you want to be rich?
Helping Exceptional Companies Realize Their Full Potential 3 Monmouth Venture Partners
Or king?
Helping Exceptional Companies Realize Their Full Potential 4 Monmouth Venture Partners
Achieving both is a rare exception…
Helping Exceptional Companies Realize Their Full Potential 5 Monmouth Venture Partners
Here’s the reality…
“Most entrepreneurs want to make a
lot of money and run the show.
Research shows that it’s tough to
do both.”
“If you don’t figure out which matters
more to you, you could end up
being neither rich nor king.”
_ Noam Wasserman, The Founder’s Dilemma, Harvard Business Review, February 2008
Helping Exceptional Companies Realize Their Full Potential 6 Monmouth Venture Partners
Some sobering facts…
• 50% of founders no longer
CEO 3 years after funding
• After 4 years, only 40% are
still in that role
• By time of IPO, less than 25%
X X X X X
X X X X X X
X X X X X X X X
• 4 out of 5 founding
CEOs have to be
forced out!
Helping Exceptional Companies Realize Their Full Potential 7 Monmouth Venture Partners
Growing pains…
• Limits of bootstrapping
• Outside money enables faster
growth
• Loss of total control of the
business
• Investors want oversight and
seats on the board
• First steps in putting your role
as founding CEO at risk
Helping Exceptional Companies Realize Their Full Potential 8 Monmouth Venture Partners
The paradox of success…
Product Launch
Marketing
Sales
Customer Service
Finance
HR
Operations
Structure
Process
Specialized Roles
Managerial Heirarchy
Helping Exceptional Companies Realize Their Full Potential 9 Monmouth Venture Partners
FFFs Angels VC PE
Entrepreneurs v. Investors
Implications for raising money…
Worse Terms
Better Terms A
lign
me
nt o
f In
tere
sts
Sources
Wealth
Control
Helping Exceptional Companies Realize Their Full Potential 10 Monmouth Venture Partners
Implications for creating value…
Economics
Product
Market
Sales &
Marketing Competition
Management
Helping Exceptional Companies Realize Their Full Potential 11 Monmouth Venture Partners
If your motive is…
…influenced by venture’s potential
Wealth Control
Use your own
capital (FFFs)
Not recruit
potential rivals
Raise less $$$
overall
Seek outside
investors
Hire professional
management
Raise a lot more
$$$
Helping Exceptional Companies Realize Their Full Potential 12 Monmouth Venture Partners
Other tales from the trenches…
Helping Exceptional Companies Realize Their Full Potential 13 Monmouth Venture Partners
Q & A
Helping Exceptional Companies Realize Their Full Potential 14 Monmouth Venture Partners
Thank You
Frank J. Graziano
Managing Partner
Monmouth Venture Partners, LLC
(732) 930-0161
