Energized Growth Teams - A Case Study

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1 Entrepreneurship Building the right team June

2 Topics 1. Delta Team and Role 2. Growth Team and Board 3. Founding Management Team 4. Cultivating the Team 2

3 Delta Partners VC Firm around since 1994 Investing our 4 th Fund Early stage tech focus ICT and medical devices Cork investments: Qumas, SensL, Farran, 96FM, Neurocure 3

4 75 Years of VC Experience Frank Kenny 25 years in VC Boston and Dublin 2 Nasdaq boards MBA Chicago, UCD Founded 1994 Medtech and ICT Shay Garvey 14 years in VC Startups in food industry MNC s (Exxon, Corning, McKinsey) MBA Harvard, UCD Joined 1994 Medtech and ICT Maurice Roche 15 years in VC Previously with Enterprise Equity Chartered Accountant, U.L. Joined 1995 ICT and Business Services Dermot Berkery 10 years in VC Previously McKinsey (Atlanta, Dublin) Chartered Accountant MBA Harvard, UCD Joined 1999 ICT and Business Services 4

5 Experienced Team Joey Mason Medical Doctor /Investment banker Entrepreneur: web service VC company director of corporate development TCD Joined 2003 Medtech Rob Johnson Angel investor 16 years Professor London Business School and IESE Co-founded successful VC based data base company MBA Virginia, Davidson College Joined 2004 ICT and Business Services John O Sullivan Delta CFO 25 years in finance in healthcare and high-tech TCD Joined

6 Delta History InishTech Beta Beta Delta I BIEF Delta Delta II II Delta Delta III III Vintage Year Fund Size $3m $11m 29m 13m 90m 105m Focus Life sciences Early stage tech (ICT and Life Sciences) Development capital Early stage tech (ICT and Life Sciences) Development capital Early stage tech (ICT and Life Sciences) Development capital Early stage tech (ICT and Life Sciences) Early stage tech (ICT and Life Sciences) Early stage tech (ICT and Medtech) # investments to date 59 investments since 1994 ~ 80% seed or start-up 6

7 Delta Role - Building Growth Companies START-UP WITH CORE ELEMENTS Exciting technology University Spin-out addressing a large market; or, Commercially successful people Company with platform for growth 3-4 first-class senior execs Deep understanding of market Early engagement with customers Insightful product marketing/management Articulated business model Clear execution path to success A scaled, valuable exit candidate University Spin-out SensL, WBT, Pxit, Genable, Neurocure, Neoss, Miracor 7

8 Topics 1. Delta Team and Role 2. Growth Team and Board 3. Founding Management Team 4. Cultivating the Team 8

9 Growth Team and Board In Ireland, boards run companies & operate through managers. Board needs a balance of many factors: Industry & Commerce, Finance, Investment Legal, HR. Typically, 6-10 people, mostly NEDs Board of Directors (Non-executive and Executive) Managing Director/ CEO Management team requires spread of skills to operate business: Large & small company Multinational/ Cross-border Rapid growth HR Structured growth results R&D/ CTO Manufacturing Sales & Marketing Finance & Admin/ CFO 9

10 Topics 1. Delta Team and Role 2. Growth Team and Board 3. Founding Management Team 4. Cultivating the Team 10

11 Standard Spin out Founding Team Board of Directors (Non-executive and Executive) Managing Director R&D Manufacturing Sales & Marketing Finance & Admin Researcher 1 TTO / EI Researcher 2 Researcher 3 BIG Gaps! 11

12 Important Team Attributes Board of Directors (Non-executive and Executive) Deep domain knowledge, Tenacity, Passion Managing Director Commercialism, Highly adaptive, Persevering Evangelical! R&D Manufacturing Sales & Marketing Finance & Admin Support & vision Start-ups require considerable energy, optimism, vision and adaptability - principally supplied by the Founding Team 12

13 Topics 1. Delta Team and Role 2. Founding Management Team 3. Growth Team and Board 4. Cultivating the Team 13

14 What happens to Team? Initial CTO: Brings product to beta/ precommercial stage, continues inventive/ IP role as consultant & shareholder Growth CTO: External recruit, solid NPD launch & commercialisation experience (across all fxns) Board of Directors (Non-executive and Executive) Managing Director/ CEO Initial CEO: Gets company going, raises finance, hires initial team, moves on, retains shareholding Growth CEO: External recruit, strong industry & execution background. Leads to exit. R&D/ CTO Manufacturing Sales & Marketing Finance & Admin/ CFO Researchers: grow with company & stay in R&D or move to manufacturing or sales & marketing 14

15 How Team is grown Initial team: - Serendipity / network / search / love at first sight - Motivated by novelty, enthusiasm, money (cash limited & shares long-term) Board - Founders, Investors, Non-Execs through network (founders, investors, advisers) or professional search - Motivated by enthusiasm and eventual financial reward (cash limited & share options) Growth Team - Network (founders, investors, advisers), but often professional search - Motivated by growth potential (for CV) and financial reward (cash & share options) 15

16 Growing pains & solutions Inventors cannot let go their baby: - The perfect is the enemy of the good. - The market is wrong Founding Team falls out - Agree roles, responsibilities & rewards up front. - Nurture very active communication. - Perform ongoing review with or without assistance. - Agree preferred outcomes for each player (e.g. when to step away). Growth team does not perform - Hire slowly, fire quickly. 16

17 Thanks and questions! 17

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