Going Your Own Way. Paths to creating your own business. Funding Innovation The making of an investor

SUMMER 2012 Going Your Own Way Paths to creating your own business Funding Innovation The making of an investor Heavenly Rewards Getting angel investors on your side

summer 2012 in this issue 10 Outstanding Grads Meet four of our newest alumni from the class of 2012 14 HEAVENLY REWARDS How start-ups can appeal to angel investors 16 photo by Elizabeth Tichenor 16 FUNDING INNOVatiON Investor and GGU alumnus Kevin McQuillan helps start-ups get started 22 ENTREPRENEUR- SHIP FORUM The entrepreneurial spirit is alive and well in the Bay Area cover and inside illustrations by Jason Marzloff back cover photo by Elizabeth Tichenor

departments 4 calendar 5 letter from the President 6 letter from the editor 7 INSIDER 24 alumni 35 id the photo 24 photo by Charlotte Fiorito ggu magazine 3

2012 calendar August 24 GGU Alumni Association volunteer event 330 Ellis Street, San Francisco 3-5:30 pm The GGU Alumni Association, in conjunction with the Glide Foundation, will be serving those in need as part of Glide s free meal program. Please join alumni, GGU staff and students in this volunteer effort to help our community. Info: alumni@ggu.edu October 12 Alumni Reception at the California State Bar Annual Meeting Portola Hotel & Spa, Jacks Restaurant & Lounge, Monterey, 5-7pm. Info: 415-442-7824, dbruton@ggu.edu October 17 Annual Alumni Awards Luncheon The Four Seasons Hotel, 757 Market Street, San Francisco, 11:30am-2pm. Meet and celebrate fellow prominent alumni. Info: 415-442-7812, ssorensen@ggu.edu October 29 School of Law s Fourth Annual Chief Justice Ronald M. George Distinguished Lecture, featuring the Honorable Vaughn Walker PG&E Auditorium, 77 Beale Street, San Francisco. 5-6:30 pm. Reception to follow. Info: 415-442-6636, llomba@ggu.edu October 30 The Project Management Effect: Local Utilization Global Impact GGU-sponsored workshop by Lee Lambert. 536 Mission Street, Room 6210, San Francisco, 8:30 am-4 pm. Info: www.pdus4pennies.com November 15 Bruce F. Braden School of Taxation 45th Anniversary Party 536 Mission Street, 6th floor, San Francisco, 5:30 pm. Info: 415-442-7824, dbruton@ggu.edu December 7 School of Law Swearing-in Ceremony PG&E Auditorium, 77 Beale Street, San Francisco, 12-1pm. A private swearing-in ceremony for GGU alumni who have passed the California Bar. Info: 415-442-7812, ssorensen@ggu.edu For the latest information on these events and more, visit www.ggu.edu/events. For e-mail updates, update your e-mail address at www.ggu.edu/alumni. Board of Trustees Chair: Dana Waldman (MBA 95) Chief Executive Officer, Waldman & Associates Treasurer: Linda G. Montgomery (MBA 84) Certified Public Accountant Secretary: Charles Conradi (JD 78, MBA 81) Treasurer and Vice President of Tax, The Clorox Company Mark S. Anderson (JD 89) Dan Angel, PhD President, Golden Gate University Hon. Lee Baxter (JD 74, LLD 08) Judge (Retired), Superior Court, City and County of San Francisco Bruce Braden (MBA 73) Chief Executive Officer, Braden Exploration, LLC Mark E. Burton, Jr. (JD 95) Partner, Hersh & Hersh Ann Moller Caen (MBA 88) President (Retired), Moller & Associates Cameron Carlson (JD 90) President, Carlson Hammond Tracey Edwards (JD 81, LLM 83) Managing Principal Global Shared Services & Chief Knowledge Officer, Deloitte LLP Roi L. Ewell (MS 85) Vice President, Industry and Government Affairs, SeaWorld Parks & Entertainment Michael Goldsmith (BS 65) Chief Executive Officer, KLS Logistics Services Inc. Ronald O. Hamburger (MBA 86) Division Head: Structural Engineering, Simpson Gumpertz & Heger Bruce W. Hart Principal, Jacobs Engineering Corporation Mary Huss (LHD 09) Publisher, San Francisco Business Times Dave Iuppa (MBA 86) Master Coach and Consultant President, GGU Alumni Association Board of Directors Madelyn Mallory (MBA 93) President and Chief Executive Officer, Catalyst Financial Planning & Investment Management Rosemary Martin (MBA 83) Barbara Mendelson (BS 84) Randy Merk (MBA 85) Executive Vice President, Investment Management Services (Retired), Charles Schwab & Co. Inc. Ted Mitchell (BA 71, MS 81) Partner, Delagnes, Mitchell & Linder LLP Jim O Neil (MBA 86) Realtor, Better Homes and Gardens Mason-McDuffie Real Estate Paul Regan (MS 79) President and Chairman of the Board, Hemming Morse Inc. Dan Riley (MBA 81) President Global Treasury Services (Retired), Bank of America Barbara Roberts (MS 88) President and Chief Executive Officer, Wright Engineered Plastics Inc. Les Schmidt (MS 81) Suthee Tritasavit (BS 67) Partner, Celeski & Tritasavit An Accountancy Corporation Janice Wilkins (MBA 87) Vice President of Finance and Director of Internal Audit (Retired), Intel Corporation 4 summer 2012

The Opportunity Seekers When I was a child of 10, my father took me with him to have our car s oil changed. At that time, the only choice was to take your car to a gas station and leave it there for the morning or for the entire day. The cars would sit in a parking lot and be serviced one by one, all day long. I remember asking my dad, Isn t there a way to do this faster? There was, but not for a long time into the future: Jiffy Lube. What makes a successful entrepreneur? The ability to spot a need and fill it. As a matter of fact, that s probably a good definition of all business success in its broadest form. In the new competitive landscape of today s business world, organizations have to constantly be seeking opportunity. As those opportunities become crowded, they must move on to other blue oceans, forever adding value for stakeholders. The interesting thing about opportunities, though, is that organizations don t spot them people do. That means that for an organization to be able to compete, it needs to have enough individuals who operate with the entrepreneurial spirit as a rewarded way of conducting their daily business. Decision makers should feel that a proposed course of action is within their competence and control, desired by the organization and in line with a social expectancy. That s an elaborate way of saying that the culture of an organization will drive both the actions and outcomes. This isn t new information: Books and cognitive models have been espousing this message for many years under the banner of innovation and they are right. What is new is the recognition that with the right foundation, people in organizations from large corporations to start-ups can use the intention of their actions to create solutions and provide opportunity. With this societal acknowledgement, we give license to our workforce to dream and then do it no matter who you are or where you work. There is a new economy movement afoot that proposes we transition corporations from entities that legally exist to maximize shareholder value to corporations that will exist to maximize all stakeholder value from the shareholder to the worker to the community and the environment. As one of GGU s advertising headlines advocates, Do well, but do some good. Social and environmental issues have changed and so must new realities for today s world of global businesses. At Golden Gate University we will continue to provide the most current, relevant and practical business and legal education available. We are so inspired by the achievements of our alumni, underscored by our Profiles in Prominence series each year. It makes us proud to know that as members of the GGU community, we continue to put forth the opportunity seekers finding needs, and filling them around the globe. Photo by Sean Cawley letter from the president ggu magazine 5

everyday entrepreneurs letter from the editor The thought of starting a business makes my stomach hurt. The allnight work sessions, the constant grubbing for money, and then rejection after rejection after rejection it sounds unbearable. But it also sounds like my career, and like the careers of many friends and colleagues, which haven t been unbearable at all. In work, as in life, we ve all had anxious all-nighters and spells of selfdoubt. But we ve also experienced the positives: doing what we believe in and knowing we ve done it well. We re the architects of our lives. So in a way, all of us are entrepreneurs. When we begin to think like entrepreneurs, we help society as well as ourselves. GGU President Dan Angel writes, With the right foundation, people in organizations from large corporations to start-ups can use the intention of their actions to create solutions and provide opportunity (page 5). GGU alumnus Kevin McQuillan (MBA 85), for example, wanted to work for a small, high-growth company. He created his own solution by co-founding Focus Ventures, a venture-capital firm. Now, as an investor, McQuillan provides opportunities for others to follow Editor in Chief Jennifer Williams their dreams (page 16). Many other GGU alumni are also supporting the entrepreneurial spirit. James Clark Jr. (MBA 76), Doug Kindred (MBA 72), Ed Mayeda (MBA 71), Gerald Moore (BS 92) and John Moran (MBA 85) volunteer with SCORE, an advisory program offered by the Small Business Administration (page 21). GGU itself champions innovative thinking both in its workplaces and in its classrooms. This fall, the Edward S. Ageno School of Business will launch a new concentration in entrepreneurship (p. 23). Seeing a need and finding a way to fill it it s something all of us can do. President Dan Angel, PhD Vice President, University Advancement Elizabeth Brady Editor in Chief Jennifer Williams Art Director Morgan Dodge Contributing Photographers Sean Cawley, Gene Dailey, Charlotte Fiorito, Matt Kim, Elizabeth Tichenor Contributing Writers Deanna Bruton, Susan Fornoff, Melissa Stein Class Notes Coordinator Stacey Sorensen Production Staff Kara Nelson, Enver Sedolli Send comments and letters to the editor to: Editor in Chief ggu Office of Marketing and Communications Golden Gate University 536 Mission St. San Francisco, CA 94105 or jwilliams@ggu.edu For information about Golden Gate University, call 800-GGU4YOU or visit www.ggu.edu. 2012 Golden Gate University Third-class postage paid at San Francisco, Calif., and additional mailing offices TUITION GRANTS FOR ALUMNI Alumni and their families are eligible for tuition grants through our Community Tuition Assistance Grants program. For more information, please visit: www.ggu.edu/enrollment/financial-aid/scholarships-and-grants Postmaster: Send address changes to Office of University Advancement Golden Gate University, 536 Mission St., San Francisco, CA 94105 PDF versions of ggu magazine may be seen at www.ggu.edu/alumni 6 summer 2012

insider news and notes from ggu It s Official: GGU s Bruce F. Braden School of Taxation insider In recognition of a $2 million commitment to support programs for the School of Taxation, GGU s Board of Trustees has voted to name the school after Bruce F. Braden. A successful business owner/operator in the oil and gas industry, Braden is an alumnus, former instructor and trustee. Bruce is a staunch supporter and friend of GGU, said GGU President Dan Angel. We are delighted with this opportunity to show our deep affection and appreciation for his dedication, support and leadership. The naming of the School of Taxation translates all of those attributes into an indelible footprint on GGU. Braden received his MBA with a concentration in taxation from GGU in 1974. He was a tax instructor from 1978 to 1981 and is a member of the GGU board of trustees. He has been an owner/operator in the oil and gas industry for more than 25 years and was most recently the CEO of Braden Enterprises LLC, a small, independent oil and gas company based in Fort Worth, Texas. I m a big believer in education and am very excited about Golden Gate University, said Braden. GGU ensures our nation s businesses across industries have access to some of the most well-rounded and versatile tax professionals in the country. We couldn t run our businesses quite so successfully without them. Braden s financial support funds large merit scholarships for taxation and accounting students, increased Bruce F. Braden innovation and quality in classes, academic and administrative support, faculty mentoring and services to enhance student retention. Golden Gate University s newly named Bruce F. Braden School of Taxation has enrolled more students during the last 45 years than any other tax program in the nation, said Mary Canning, dean of the school. We re honored to name it after star alumni Bruce Braden, and we are so appreciative of his contributions to our school. As the nation s leading tax school, GGU offers more tax classes at more times than any other university, said Canning. We have an incredibly talented, widely skilled adjunct faculty base that gives our student body access to a greater variety of relevant classes within multiple areas of specialization. Fully accredited by Western Association of Schools and Colleges (WASC), GGU s School of Taxation is focused on teaching students practical skills and ensuring hands-on experience. The hands-on experience at GGU has earned the respect of the industry s leading firms, said Braden. Major accounting firms actively seek out and recruit GGU graduates, and they also rely on Golden Gate for continuing education and professional training for their employees. Before Braden Enterprises, Braden was the founder and major contributor to four successful companies in the oil and gas industry NEOK Energy LP, Stroud Oil Properties Inc., Pinnacle Technologies Inc. and Stroud Energy Inc. He completed his undergraduate degree at Stanford University and served in the US Army. His professional career began with Touche Ross, followed by partnerships with Frederickson & Co. and Alexander Grant & Co. The formal dedication of the new school name will take place at the 45th Anniversary of GGU s School of Taxation on Nov. 15. Braden will be presented with the Amicus Award at the university s Oct. 17 Alumni Awards luncheon for his significant contribution to the university s resources and, thereby, to its educational capabilities and services. Fouts named Business dean Paul Fouts has been selected as the new dean of the Edward S. Ageno School of Business. Fouts, who served as the associate dean and director of MBA programs, photo by Gene Dailey ggu magazine 7

insider has been a professor of corporate strategy, international strategy and technology management. He was awarded the Moskowitz Prize in 1998 for the best research in corporate environmental performance, as well as the Outstanding Paper Award from the International Journal of Commerce in Management in 2010. He has made presentations to international, private, governmental, and educational audiences, and has taught in corporate training programs for companies such as Cisco, Chevron, Gilead and Credit Suisse. Prior to beginning his career in education, Fouts had 20 years of senior management experience in the San Francisco Bay Area. Executive MBA Offers New Opportunities GGU is relaunching its exclusive Executive MBA degree with a new 16-month cohort program beginning in January 2013. Our redesigned curriculum emphasizes the interpersonal skills of teamwork, communications, ethics, social values and leadership. Open only to executives with at least eight years of work experience (five years of management responsibilities), the program promises a fantastic peer-to-peer learning environment, a speaker series and an international trip to China. Alumni eligible for Grants Graduates of GGU degree programs are eligible for a 30 percent tuition grant. Members of a graduate s family defined as a spouse, domestic partner, child or step-child are eligible for a 20 percent tuition grant. Applications must be received by the last of the semester in which the student wishes to receive the grant. For more information, e-mail finaid@ggu.edu. Rachel Van Cleave: GGU Law s Interim Dean This summer, Dean Drucilla Ramey stepped down from her role as dean of GGU s School of Law to join the faculty. During the course of her time as dean, the law school experienced remarkable growth in and beyond the traditional curriculum, including the highly successful first-year elective program; its novel Summer Trial and Evidence Program (1st STEP); a boot camp for aspiring litigators in their pre-2l summer; the expansion of externship opportunities, including the nationally unique Honors Lawyering Program; a new experiential learning requirement for all students; and a sterling ABA review of the law school s summer Paris program in European and comparative law. Dean Ramey started the law school s annual signature event, the Chief Justice Ronald M. George Distinguished Lecture, as well as the International Women Judges Graduate Fellowship Program, which brings international women judges to GGU Law to earn LLM degrees. As Ramey returns to the faculty, the law school is extremely fortunate to have Interim Dean Rachel Van Cleave assume leadership while a national search for a permanent dean is under way. Her longtime academic and administrative leadership of the school bodes exceptionally well for a highly successful year. Dean Van Cleave has taught at Golden Gate for the last eight years and served as the law school s associate dean of Academic Affairs for the last four. A graduate of Stanford and Hastings and a Fulbright Scholar, she is a nationally prominent scholar and professor, specializing in the Italian criminal justice system. She has published 15 law review articles and four book chapters, including a contribution to the book about California Supreme Court Justice Jesse Carter, a GGU Law graduate. In 2011, she received the Justice Jesse W. Carter Faculty Scholarship Award. This October, Dean Van Cleave will be at the helm of GGU s Fourth Annual Chief Justice Ronald M. George Distinguished Lecture, featuring the Honorable Vaughn Walker and a panel of leading federal and state jurists from across the country who will discuss LGBT issues in the judiciary. Under Dean Van Cleave s leadership, GGU Law will continue to set the standard for and strengthen the school s relentless focus on innovative, experiential education that helps students master both the theory and practice of law. Influential Women: Yarrow and Canning GGU s Kit Yarrow and Mary Canning were recently selected as two of the Most Influential Women in Business by the San Francisco Business Times. Canning is dean of the university s Accounting and Tax schools, and Yarrow is GGU s Psychology Department chair and Nigel Miner Professor of Business. Congratulations Kit and Mary we so appreciate your service at GGU, as do the students and alumni that continue to pass through your exemplary programs, said GGU President Dan Angel. You have shown all of us how true leadership, dedication and commitment to excellence can lift up so many others, including the thousands of GGU alumni who are leaders at some of the top companies in the Bay Area and beyond. 8 summer 2012

insider Photo by Sean Cawley Paul Fouts Meeting the Educational Needs of Entrepreneurs By Paul Fouts It is a common perception that entrepreneurs don t need a degree. While there are many examples to support that idea Bill Gates, Steve Jobs and Mark Zuckerberg the point is open to debate, as there are many more successful entrepreneurs that have benefitted from getting degrees. However, one thing everyone will agree on is that entrepreneurs still need to learn. The key issue is how they get the skills and knowledge they need at the same time as they grow their startup businesses. Entrepreneurs are not unique in this, but the time issues are magnified for them. One of the initiatives that we are working on at the Edward S. Ageno School of Business is to explore how to provide learning opportunities for the entrepreneur. Our new MBA degree concentration in entrepreneurship is designed in our traditional format, with courses delivered in three-unit chunks of work over 15-week lengths of time. Each of theses courses is designed to give a broad overview of the material, covering all aspects of that subject. Taken as a group of courses, the knowledge and skill set embedded in our MBA degree is enormous and is perfect for someone who is preparing to become an entrepreneur. However, the MBA takes too much time to complete and covers too much material to meet the immediate needs of the entrepreneur who has a specific problem to solve or skill to develop, and who must do it in as short a time as possible. To meet this need for entrepreneurs, and to supplement our MBA offering, the business school is in the process of developing a set of narrowly targeted one-unit, five-week courses that each focus on a specific issue facing entrepreneurs today. We have gotten input from seasoned serial entrepreneurs, the investor community, advisory boards and new entrepreneurs to help us shape our course and certificate program offerings. The courses will cover both the planning and funding of a start-up business, and the particular issues of running the business once it is started. We are also developing a set of courses and a certificate program for investors to help them better manage their portfolios of companies. Our goal is to start offering these courses early next year. If successful, The business school is in the process of developing a set of narrowly targeted oneunit, five-week courses that each focus on a specific issue facing entrepreneurs today. this program will also help us extend the concept of providing focused short course offerings to other learner communities. Paul Fouts is the recently appointed dean of the Edward S. Ageno School of Business at GGU. ggu magazine 9

Outstanding Imagine these four outstanding graduates from the class of 2012 together in a single photograph. They encapsulate today s Golden Gate University ranging in age from young Nora McIntosh to grandfather of 21 (and counting) Matthew Haws. Their stories are diverse, from Black Law Students Association President Crystal Cole Matson to Murat Wahab, a 40-year-old Malaysian immigrant. One of them even managed to be an outstanding student without setting foot in a classroom. Haws completed his MS in Project and Systems Management remotely, from his home in Houston. Congratulations to our four new Outstanding Alumni. Grads Murat Wahab BA 12 What a year for Murat Wahab, outstanding undergraduate. In 2000, he landed at SFO with two suitcases, $500 and no one to call. In 2012, he plans to revisit his native Malaysia for the first time, bearing the title of vice president for a major bank and his degree in Administration/ Management. Most of my family is illiterate, and they don t know how much I have accomplished, said Murat, who turned 40 this year. I really want to show my nieces and nephews that if I can accomplish this, it shows that you can accomplish anything if you put your mind to it. Murat had a good job but longed for a college degree. He enrolled at GGU in 2010 and made the Dean s List while not only continuing to work full time, but ranking in the top 3 percent of performers in his company. photo courtesy Murat Wahab GGU s Executive MBA program is on his calendar for spring 2013, but first, he has more of his memorable 2012 to look forward to: the flight to his homeland. 10 summer 2012

Nora McIntosh MAc 12 photo by Elizabeth Tichenor Asked the secret to landing an accounting job at BDO-San Francisco with a start date months after graduation, Nora McIntosh ticks off a long list of rejections. Every time I got rejected, I asked why, said the Orinda native and Scripps College grad. It was hard. But I came to GGU to get more polished, and all of this helped me to be more confident. Nora got off to a late start in accounting. She once thought she wanted to be a commentator on the History Channel, among other dreams. She was already a junior when she took her first accounting class at Claremont McKenna, and, she said, I fell in love with it. She hustled through her bachelor s degree in economics/ accounting and then applied to GGU, where she scored high grades and the Accounting Association presidency. Retired PwC partner Richard Carson coached her, and by fall of 2011, she had her job. I think everyone could benefit by having someone like that on their side, Nora said. She is prepping for CPA exams this summer, but hopes to help develop a GGU mentorship program to aid future grads....i came to GGU to get more polished, and all of this helped me to be more confident. ggu magazine 11

Matthew Haws MS 12 Matthew Haws graduated from his hometown San Jose State University with a BS in business management/accounting in 1980. By 1985, he was well into MBA work at GGU s Los Altos campus then twins arrived. We already had three kids, and it was more important for me to be home, he said. With a 3.85 GPA, the outstanding graduate did it all via GGU s online program. photo by Elizabeth Tichenor Fast forward, well, not so fast: Twenty-seven years later, Matthew received his Master of Science in Project and Systems Management degree from the Edward S. Ageno School of Business. With a 3.85 GPA, the outstanding graduate did it all via GGU s online program. In between GGU stints, Matthew got divorced and married Debora, mother of six. He s now father of 11 and grandfather of 21, at press time. ( We count on another one or two every year, he said.) Matthew completed work on the degree online, at night, after working fulltime-plus as a financial systems manager for a Houston insurance company. My kids have been really supportive and proud of me, and hopefully this will stir some of them, he said. Only two have graduated. Now they know it s never too late to go back to school. 12 summer 2012

Crystal Cole Matson JD 12 Wells Fargo Bank hired Crystal Cole right out of Atlanta s Spelman College and brought her to the Bay Area in 2006. Six years later, she has her law degree and a hefty stack of awards including the Rose Elizabeth Bird and Paul S. Jordan awards, and the Law Review s Outstanding Associate Editor Award. She also has a husband, George Matson, a fellow Texan whom she met with the same gift of gab that led her from the working world into law school: She simply started talking to him at the BART station they had frequented for months. One thing led to another, pretty much the way her ease at conversation led to a law degree. When I was growing up, people told me I talked a lot, Crystal said. They said I talked so much, I should become a lawyer. That s how it all started. Crystal quickly became well known around GGU halls for her energetic campaigning for SBA 1L representative; her buttons and flyers were everywhere. She won, but is most proud of her leadership role in the Lifting as We Climb Black History Symposium, in February. Now, pending July s bar exams, she s hoping to talk her way into her next job. photo by Charlotte Fiorioto When I was growing up, people told me I talked a lot. They said I talked so much, I should become a lawyer. ggu magazine 13

For Top-Notch Start-Ups, The Money is Out There Peter C. Freeman is an adjunct professor of finance at Golden Gate University and a member of the Keiretsu Forum of angel investors. By Peter C. Freeman There has never been a better time to launch a start-up. Entrepreneurship and high-profile IPOs are all the rage currently, for good reasons. I believe we should view this not as something trendy and transitory, but as evidence of a more fundamental cultural or economic change affecting us all. First, there are some significant differences between prior economic environments, such as the dot.com era, and the current business climate. Fewer resources are required to start a business, the ecosystem for innovation is more robust, and financing is more readily available. The improved availability of capital is probably somewhat contrary to the conventional wisdom. I am an active angel investor and adviser to earlystage companies seeking funding, so while this reflects a bit of personal bias, it is also based on my own observations as someone in the trenches. The IPO market has become more active, with prominent recent examples such as Facebook and Groupon (although those have received a lot of attention due as much if not more to their difficulties, rather than their successes). However, one new source that I find quite interesting is the secondary or alternate trading markets (ATMs), where Facebook shares were traded actively for months preceding the IPO. IPOs are one form of the American Dream, a route to great material riches. However, they have significant disadvantages and are not well suited for all situations. The costs of compliance and preparing for going public, both initial and ongoing, are quite high, and being a public company typically changes the internal dynamic or culture. The ATMs, such as Second Market and XPert Financial, represent a viable alternative, providing growth capital and liquidity with what I consider great potential for the future. The JOBS act passed earlier this year by Congress included a provision increasing the number of shareholders a company can have before it is required to comply with public reporting requirements from 500 to 2,000. That is a pretty significant shareholder float or source of liquidity. Angels gaining influence Another source taking on increasing importance are angel investors. The term angel harkens back decades ago to backers or financial supporters of Broadway plays, who would take the leap of faith to invest in new shows. The term has taken on a more modern meaning, describing an individual who provides financing to high-potential, early-stage companies start-ups, typically with a high-tech flavor. Angels have much in common with venture capitalists (VCs). A principle difference is that a VC is an organization or firm, while an angel is an individual human being. VCs tend to get more attention; they are the rock stars of modern finance. But statistics 14 summer 2012

show that angels are a steadily increasing source in recent years, and are providing more funding currently than VCs (sources include the Halo report and NVCA Money Tree survey). Angels will typically provide funding for deals in mid-six-seven-figure amounts, usually in collaboration with other investors. They are rarely passive investors, and bring more to the party than just the ability to write a check. Most angels are former entrepreneurs themselves, and are thus able to anticipate problems and provide resources; they tend to be more supportive and understanding of problems or setbacks. Resources can include managerial assistance or connections to strategic partners and customers. Getting angels on your side Angels have a well-above-average tolerance for risk. But they are also quite thorough, focusing on fundamentally sound business methods and best practices. The story must include a good rationale for the following principles: 1Define your value proposition. What problem you are trying to solve? 2Know how you plan to achieve and sustain competitive advantage. (As an aside, you will often hear aspiring entrepreneurs observe that We have no competition. I see that as a sign of naïveté and an unrealistic view of their markets. So don t say it!) 3Identify and implement a viable business model. Know how are you going to make money. A sustainable business is Leaps of faith should be based on experience and evidence, not blind faith. not one that recycles its paper. It is one that takes in more revenue than it pays out in expenses. 4Be able to demonstrate market acceptance and traction. The best way is with significant sales, but that is often a challenge for early-stage companies needing capital. The funding is often needed to go to market. Finding the early adaptors who are willing to embrace your products and services, taking a leap of faith, can be one alternative that warrants considerable effort in the early stages. 5Have a sense of the exit strategy. How will investors be able to cash in their chips or receive a return on their investments? Often the preferred route is to be acquired by a large established company like Google. 6Finally, put a strong and experienced management team in place. Angel investors will often bet on the jockey, not the horse. The ability to execute and capture the opportunity not just having a great idea is critical. I mentioned at the beginning of this article that I consider the current environment to be full of entrepreneurial spirits and innovation, in a fundamental way. I often find myself observing that life is full of change, whether we like it or not. Large companies are far from immune from the winds of change: Consider Polaroid, Circuit City and Xerox (just to name a few). New technologies, the next new and cool apps, are emerging with dizzying rapidity. But some things remain the same. In particular, the principles used by angels in evaluating good businesses are ones all companies must keep firmly in focus. I believe this also applies to individuals as well. Companies large and small increasingly require people with both solid backgrounds in key business and management methods, who also have critical thinking skills and the ability to adapt and reinvent themselves constantly. Think like a start-up. I can recommend a recent book, The Start-Up of You, by R. Hoffman, one of the co-founders of LinkedIn, making this case. Rather than the old paradigm of slogging your way up the corporate ladder, you need a new strategy to be successful. Be able to identify where the opportunities lie, which industries are dynamic, and cultivate the skills to be able to add value constantly. These skills include taking calculated risks. Leaps of faith should be based on experience and evidence, not blind faith. One of the reasons I believe that the current ecosystem for innovation is more robust is that past efforts provided lessons of what not to do, experiences that are being applied effectively today. I began this article by observing that there has never been a better time to launch a start-up. Start-ups are the leaders of the entrepreneurial sector of the economy, and have been one of the primary drivers of the current economic recovery. And San Francisco is becoming increasingly important as a center for innovation. We are in the right place at the right time. GGU adjunct professor Peter C. Freeman has more than 30 years experience in financial management, creating financial infrastructure and raising capital for established, start-up and turnaround companies. ggu magazine 15

GOING HIS OWN WAY How one investor chose his path by Melissa Stein illustrations by Jason Marzloff photo by Elizabeth Tichenor 16 summer 2012

Venture capitalist Kevin J. McQuillan (MBA 85) knew early on that he didn t want to be another cog in a corporate machine, but it truly hit home during a postcollege interview with Ford Motor Company, where his father had worked for 25 years. I remember walking out of the interview saying, Not in a million years am I going to work for a company like this, says McQuillan. It was all about how long you were there not how good you were. I knew I didn t want to work for a big company, he explains. I wanted to work for a small company that was high growth. That seemed like a lot more fun to me. A stint in law school and a stroke of luck at a real estate syndication firm led him to where he is now: co-founder of Focus Ventures in Palo Alto, whose portfolio features about 30 privately held companies with more than $800 million under management. McQuillan s dynamic investments through Focus Ventures in the software, internet and communication markets have earned him a spot on Forbes Magazine s Midas List of top technology investors for six of the past seven years. He has also been featured in AlwaysOn s VC 100 list, Power Players West List, and the book Venture Capitalists at Work. I think we (Focus Ventures) have been very successful in creating some great technology and great products for the betterment of society, he says. Seeing market opportunities emerging in late-stage venture capital in the mid-1990s, McQuillan and his partners founded Focus Ventures to invest in companies that had already finished product development and had developed a customer base. We usually invest in the third or fourth round of a private company, adding capital to grow their sales marketing and build infrastructure, he says. How does McQuillan decide which entrepreneurs deserve his firm s money? We look at size of market opportunity, markets that we think are I think too much credit is given to the investors, and more credit should be given to the entrepreneurs. going to grow quickly. In the venture business, especially in technology, most of the money is made in the number one or number two company in a market segment. They take the largest market share. Sometimes the products and technology aren t that much different they re number one because they have the best management teams and they execute. Kevin J. McQuillan: Resume at a glance 1978 BBA, Western Michigan University 1985-86 Director of Investments, Equitec (Oakland, Calif.) 1994-97 Managing Director, Comdisco Ventures 2004 First of six appearances on Forbes Midas List 1983 JD, Thomas M. Cooley Law School (Michigan) 1986-94 General Partner, Dominion Ventures (Walnut Creek, Calif.) 1997-present Co-founder and General Partner, Focus Ventures (Palo Alto, Calif.) 1985 MBA, Golden Gate University ggu magazine 17

Fresh ideas make it happen At the heart of the business, he says, lie the innovators. It s not about the venture capitalists we re advisers, pure and simple. I think too much credit is given to the investors and more credit should be given to the entrepreneurs and management teams. We re kind of along for the ride. And what makes that ride possible, says McQuillan, is the business culture in the Northern California region he calls home. The reason this place works is that everyone shares, he explains. Just look at history; look at old Europe. It used to be run by a bunch of families. The deal with these families and the deal with the big companies in our country was that they guaranteed employment. If you helped make the family successful, you didn t really get to share in the upside, but you have a job for life. That was the tradeoff. What Silicon Valley did is say, We can t guarantee you a job for life, but if we re successful, you get to share in that success. Every single person receives stock options. That s a completely different attitude than other places in the world, McQuillan says. Not only do the employees get to share, the lawyers get to share, the real estate people get to share, consultants, headhunters. You re sharing optimism. If you cut through it, he continues, your chances aren t high that you ll succeed, but everyone s thinking that they re part of the one that will succeed. You can tell I m passionate about why this place works. The environment that fostered this vibrant new business model also drew scores of entrepreneurs with big dreams. That s one thing I love about California in Michigan (where McQuillan grew up), if you took a risk and went and did a startup and you failed, you were basically shunned by society. You re kind of a loser. Out here it s hey, if you lose, it s okay go do another one! It s a completely different attitude about winning and losing. With a few exceptions the Facebooks, the Microsofts most great CEOs have failed once or twice in their life. You learn a lot more from failures than you do from winning. Because at the end of the day, a lot of winning is luck, being at the right place at the right time. McQuillan feels incredibly fortunate to be participating in this exhilarating atmosphere. I have the greatest job in the world, he says. Part of the reason is that I get to meet the smartest people in society. How You learn a lot more from failures than you do from winning. many industries allow you to do that? They re so highly motivated. What s hard is to turn them down, because they want to change the world. McQuillan clearly relishes the fast-paced, turn-on-a-dime nature of the venture capital business. You re somewhat at the beck and call of your portfolio companies. Or if a hot deal comes, you ve got to make a quick decision. Our world is extremely competitive. You never know it could be the next Cisco that walks into your office. Not surprisingly, he feels that one of the keys to success is time management: You have to figure out your priorities, then figure out the time allocation. Going West McQuillan s realization of the California Dream began when he hopped into a college buddy s car heading west for a post-graduation vacation in the late 70s. I fell in love with California. It s gorgeous. And there was a lot more opportunity out there. While his friend was lucky enough to find a job and stay, McQuillan returned home to Michigan to contemplate his future. I worked for about a year and a half, he says. It was so depressing. It was as bad as it is now. The car industry was on its tail, it just wasn t growing, and all my friends were leaving the state. So he began to think about how he could engineer his way back West. McQuillan s highly successful career as a venture capitalist actually began with a detour into law school. With Michigan s economy so weak, and with several of his friends pursuing legal careers, he figured he d follow suit, enrolling at Thomas M. Cooley Law School. After getting his feet wet, though, he realized the field wasn t for him. I hadn t really known what judges and lawyers did for a living, and I didn t really like it. I said Ooof, what am I going to do now? he recalls. So my third year I started thinking about what I wanted to do with my life. I did know I wanted to get back to California. He began to investigate possible next steps. While in college, McQuillan had spent a lot of time reading magazines such as Forbes and Business Week. I don t have the attention span to go read large books or long stories. I want to get the facts quickly, he says. And it was obvious to me that more and more space in these magazines was being devoted to technology, and more companies were investing in it. At the same time, McQuillan s father gave him invaluable advice: 18 summer 2012

Kevin J. McQuillan, co-founder and general partner, Focus Ventures The Big 3 are all going to go down over the long haul, and the future of this country is going to be in technology and information people who want to share information and make money off information. And he was right, McQuillan adds. He said you want to be where the growth cycles are, and on the front end of a business: sales and marketing. Don t be in the back end, where you re measuring history, he remembers his father saying. You want to go create the history. I was much more a risk-oriented person than a conservative person. When a magazine cover featuring the legendary venture capitalist Arthur Rock caught McQuillan s attention, You never know it could be the next Cisco that walks into your office. he began looking into the field. I knew nothing about venture capital, says McQuillan. Venture capital didn t even exist in Michigan. So I did a bunch of research and came to the conclusion that there were three places for it: Boston, New York and San Francisco. This was a no-brainer: The Bay Area it was. While McQuillan managed to get interviews with several venture capital firms, he didn t fit their desired educational profile, so he took a position with Equitec, a real estate syndication firm in Oakland. Quite fortuitously, within a week he and a few coworkers were transferred into a newly launched venture leasing division the company was looking for a new product to sell to its many small, individual investors, and decided to get in on the PC and semiconductor boom that was happening in Silicon Valley. Of course, starting from scratch, We knew zippo. Zilch! laughs McQuillan. ggu magazine 19

The GGU advantage While at Equitec, McQuillan quickly noticed that most of his colleagues had business degrees, so he looked around for a school that would enable him to earn a degree while working full time. I wanted to get my working career going, he says. I didn t want to take another year or two off to go to school I wanted to start making money in a real job. Golden Gate allowed me to do that. He also sought a school that would transfer some of the credits from his law degree, which Golden Gate offered to do. GGU s practical orientation proved a perfect fit. One thing I liked about law school and business school is that they taught by example, McQuillan explains. They had case studies. They talked about real issues, what people were dealing with. And that s what business life is all about issues. How you are going to solve them, are there other ways to solve them, what the norm is, and what are the risks and returns associated with each decision you make. Most kids, they re impatient. They want to know what reality is instead of reading some book that some theory guy wrote about 75 years ago. It s just human nature. So I liked the practicality. He earned his MBA in 1985. Meanwhile, McQuillan and his cohorts at Equitec were becoming very quick learners: Within two years they left to launch their own firm, Dominion Ventures, using a similar business model but employing institutional money instead of money from individual investors. Formed in 1986, the firm got off the ground with How To Score As An Entrepreneur By Susan Fornoff Success in business can occur as a result of good luck, good timing or good advice and often it s a combination the three. While you can t buy good luck or good timing, you can get good advice for free. One source of such advice is the Small Business Administration s SCORE program. SCORE s website features scores of resources for budding business founders. One of them, a roadmap called 35 Best Practice Tips for Planning Your Business (by Dick Benner of SCORE s Kansas City chapter), includes many of the practices and strategies that Kevin McQuillan seems to have intuitively followed. Among the 35, here are 5 that clearly resonate with McQuillan: 1Examine your motives. Do you really have a passion for having your own business and this particular business? McQuillan identified his passion from the experience his father shared about working for one of the world s biggest car makers. Early on, he gravitated toward entrepreneurship and small business, which he now funds. 2Understand that your primary responsibility is the proper use of capital and that you are in business to make a profit. This seems to come naturally and intuitively to McQuillan, whose company currently has $830 million under management. 3Clearly define your business idea be able to succinctly articulate it. What is your vision? What is your mission? McQuillan s early work for others in venture capital helped him develop his own strategy. Today Focus Ventures spells out its investment criteria on its website: proprietary technology (communications or software categories preferred), rapidly growing market, strong management team, market leadership, demonstrated market acceptance and previous backing from top-tier venture capitalists. 4Study your business. Stay abreast of what s going on in your industry. Read newspapers, periodicals and trade journals. McQuillan has always been an information seeker and a reader of business publications. A pivotal career moment for him came when he read a magazine cover story featuring a famed venture capitalist, Arthur Rock. 5Get involved in your community: Chamber of Commerce, business organizations, service clubs, charities. Network yourself. Keep your antennae up. In addition to serving on the boards of various companies where he s invested, McQuillan is a member of Western Michigan University s investment committee and an adviser to the Silicon Valley Executive Network. 20 summer 2012

venture capital secured from New York investors and leaped into venture leasing as well as direct equity investments in technology. In 1994 McQuillan left for a managing director position at Comdisco Ventures, a large financial services company. They wanted to get into the venture business, taking our business model and expanding it. We were investing $25 to $30 million a year and they wanted to invest hundreds of millions of dollars a year. After a couple of successful years, McQuillan and one of his partners left to found I was much more a risk-oriented person than a conservative person. Focus Ventures. Though his current job is the farthest cry from his father s secure 9-to-5 position at Ford, McQuillan pooh-poohs the idea that what he does is particularly risky. Venture capitalists aren t as risk-oriented as people think. Yes, you have a lot of companies that fail, and most of your profits are made on a few winners, but at the end of the day, venture capitalists are betting on markets and betting on people that s what it comes down to. These are calculated bets based on understanding the risk and return. SCORE with GGU SCORE also provides free counseling by mostly former or retired executives, including many with degrees from GGU. There s a chapter on Market Street, just a few blocks from GGU s San Francisco campus, and 346 chapters scattered around the country. For those who prefer to take advice with a firm handshake rather than a mere mouseclick, there s a complete list of chapters along with a search engine to make an appointment with the right mentor, at www.score.org. No doubt, many a GGU alum has received assistance from SCORE. Here s a short list of GGU alumni on the giving end, who have volunteered with SCORE to share their experience and wisdom with luck-seekers of the 21st century: James Clark Jr. (MBA 76) started two businesses that manufactured packaging and containers and grew them into mid-sized companies of which he was COO. After he sold the businesses, he began consulting, and started volunteering with the East Bay SCORE chapter in Oakland in 2009. Doug Kindred (MBA 72) acquired and nurtured a moving and storage company and then sold it to shift his focus to self-storage and business record storage in the Los Angeles area, acquiring two companies and starting two. In 1994 he began volunteering with SCORE, and rose to district director in Spokane, Wash., before climbing to a two-year term as SCORE s national board chair in 2008. Ed Mayeda (MBA 71) moved to Thurston County, Wash., in 1971 and enjoyed a successful career with Sunset Life Insurance. He started volunteering with Thurston County s SCORE chapter in 2002. Gerald Moore (BS 92) received his MBA from Wayne State and then embarked on three tours with the US Air Force. In 2004 he launched a sports coaching company; its success prompted his involvement with the Michigan office of SCORE, where he is now district director. John Moran (MBA 85) recently added to his resume a PhD in educational psychology from the University of Nevada, Reno. After leading the sales and marketing efforts for three high-tech start-ups, he became founder and president of Global Gateways, which organizes and facilitates learning communities in the business world. Moran counsels entrepreneurs in SCORE s Northern Nevada chapter. William G. Sarm (MBA 71) started volunteering in SCORE s Chicago chapter in 2010, after 15 years as chairman and CEO of his manufacturers rep agency. ggu magazine 21