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University of Maryland Technology Start-Up Boot Camp

PROGRAM

October 21, 2005 University of Maryland, College Park

VENTURES

MTECH

Conducted by

The Maryland Technology Enterprise Institute

University of Maryland Technology Start-Up Boot Camp

Welcome from MTECH: Boot Camp Founding Organization

October 21, 2005 Welcome to the 2005 Technology Startup Boot Camp! You've come to the right place to learn how to start and build a technology company; commercialize your ideas; and network with investors, entrepreneurs, and experts who can help advance your idea or venture. We hope you find today's event informative and energizing. Today's Startup Boot Camp is hosted by the University of Maryland. The University's Maryland Technology Enterprise Institute (MTECH) helps technical entrepreneurs, on campus and throughout the region, start and build companies, and MTECH provides entrepreneurship education to technologists. MTECH leads the commercialization of innovations and prepares technologists to be 21st century entrepreneurial innovators. To learn more about how our venture-creation and education programs can help you, visit www.mtech.umd.edu. Today, you will hear presentations and panel discussions from a number of leading venture capitalists, entrepreneurs, and professional service providers. We thank our presenters, all experts in their fields, for their contribution to this important event. In addition, we thank our sponsors ­ Mintz Levin, Fish & Richardson, the Maryland Technology Development Corporation (TEDCO), and the National Collegiate Inventors and Innovators Alliance (NCIIA) ­ for their financial and knowledge contributions. Mintz Levin and Fish & Richardson are leading technology law firms experienced in counseling early-stage companies. TEDCO, an important member of the region's venture community, provides seed-stage funding to Maryland technology startups. The NCIIA provides grant funding and educational programs to support collegiate entrepreneurship nationwide. I encourage you to use the networking breaks this morning, at lunch, and following today's event to speak with the presenters and representatives of the sponsors, as these people are here to help you! In closing, we hope you enjoy today's event, learn a great deal, and make some valuable contacts that help you move a step closer to becoming a successful entrepreneur!! Thank you for your interest and active participation. Sincerely,

Scott Magids, Director MTECH Ventures

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University of Maryland Technology Start-Up Boot Camp

AGENDA

8:00 a.m. 8:30 a.m. Networking breakfast Welcome Remarks Scott Magids, Director, MTECH Ventures Phil Weilerstein, Executive Director, National Collegiate Inventors and Innovators Alliance Dr. Nariman Farvardin, Dean, A. James Clark School of Engineering Dr. Jacques Gansler, Vice President for Research, University of Maryland Morning Moderator: Scott Laughlin, Director, VentureAccelerator Program 9:00 a.m. 9:30 a.m. Should You Take the Leap? Brownell Chalstrom, Venture Partner, Avansis Ventures What is Technology Entrepreneurship? Dr. Gilmer Blankenship, Professor and Associate Chair, Department of Electrical and Computer Engineering, University of Maryland, and Chairman, Techno-Sciences, Inc. How to Bring Order to the Chaos of a Start-Up Scott Magids, Director, MTECH Ventures Networking break Incredible Idea or Real Business? Andrew Scherer, CEO, Scherer Cybrarian Services Teams, the Most Important Asset in a New Business Martin Knott, The Shepherd Group Entrepreneurship is Alive and Well in Our Region Dr. Stephen Fritz, Director of Technology Transfer, TEDCO Networking lunch Afternoon Moderator: Philip J. Gross, Managing Director, Expense Reduction Analysts, Inc. 1:15 p.m. Financing Your Venture Gina Dubbé, Managing Partner, Walker Ventures Christopher Foster, Deputy Secretary, Md. Dept. of Business and Economic Development Keys to Success Mark Anstey, Founder and CEO, DataStream Content Solutions, LLC and Potomac Publishing Company David Eisner, Founder, President, and CEO, Dataprise, Inc. Rich Harris, Managing Director, SpaceVest Closing Remarks, Raffle and Networking

10:00 a.m. 10:25 a.m. 10:45 a.m. 11:15 a.m. 11:45 a.m. 12:15 p.m.

2:15 p.m.

3:15 p.m.

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MTECH

University of Maryland Technology Start-Up Boot Camp

MTECH's Programs to Help You Start Your Venture

VentureAccelerator--Helping UM Inventors Become Founders

VA helps you--the University's technology innovators--bring your discoveries to the world and drive the American economy by guiding you through launching your own venture, with an individualized sensitivity to both your academic and business needs. www.va.umd.edu

Technology Advancement Program--Empowering Tomorrow's Technology Leaders

The Technology Advancement Program (TAP) is a leading venture program that assists early-stage companies in achieving their goals. TAP expedites the maturation of young firms by providing a unique bundle of services and resources, ranging from intense mentoring and funding introductions, to extensive technical resources and lowcost infrastructure. www.tap.umd.edu

MTECH Venture Forum

The MTECH Venture Forum is a dynamic opportunity for technically-oriented graduate students and faculty to explore commercializing emerging technologies and starting their own ventures. The Forum is dedicated to facilitating new venture formation through: workshops; interactive presentations; direct access to MTECH's venture formation resources; and exciting networking events and social mixers. www.ventureforum.umd.edu

University of Maryland Business Plan Competition

The University's premier business plan competition offers faculty, students, and alumni who submit the best plans and presentations for high-potential new companies: thousands in cash and prizes to invest in your new company; coaching from regional experts in business planning and investor presentations; valuable feedback from a judging panel of potential investors, economic experts, entrepreneurs, and service providers; and the prestige, credibility, and validation that comes from winning a major competition. www.bpc.umd.edu

Hinman CEOs--Fostering Tomorrow's Entrepreneurial Leaders

The Hinman Campus Entrepreneurship Opportunities (CEOs) Program is an award-winning living-learning program at the University of Maryland, College Park, offered to undergraduate students interested in entrepreneurial ventures. The program offers a high-tech, business-incubator-style dormitory environment, oneon-one venturing guidance, an entrepreneurship course series, and a weekly seminar series. www.hinmanceos.umd.edu

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University of Maryland Technology Start-Up Boot Camp

Maryland Industrial Partnerships Program--Funding for Technology-Based Product Development

The Maryland Industrial Partnerships Program (MIPS) Program accelerates the commercialization of technology in Maryland by providing matching funds for faculty-led research projects to help Maryland companies develop technology-based products. www.mips.umd.edu

MTECH Biotechnology Program

MTECH's Biotechnology Program offers bioprocessing facilities and services, training, and consulting for Marylandbased biotechnology companies www.biotech.umd.edu

Maryland Technology Extension Service

Knowledge-based engineering, technical and management solutions, and best-practice consulting for Maryland manufacturers. www.mtes.org

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University of Maryland Technology Start-Up Boot Camp

The University of Maryland Network for Entrepreneurs: UM-NET

The University of Maryland Network for Entrepreneurs UM-NET facilitates collaboration by integrating into the Network activities of the units of the University, extending from research to successful commercialization, which are involved in the entrepreneurship process. The primary source of commercial ventures at the University comes from the extensive research base that is conducted by faculty and students, augmented by ideas and concepts that come from their imaginative minds. The University provides faculty and students a wide variety of support mechanisms for transforming their ideas, concepts and technologies to commercial products and services through education, mentoring, incubation, and networking with entrepreneurs, investors and service providers. Support mechanisms include: residential program for undergraduate entrepreneurs, entrepreneurship courses, mentoring, business plan competitions, technology startup boot camp, small business assistance, patenting and licensing, mentoring for student and faculty startups, on-campus incubator for technology startups, jointly funded university/company R&D for new and improved products, networking events, and investment sources.

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University of Maryland Technology Start-Up Boot Camp

Entrepreneurship Resources at the University of Maryland

MARYLAND TECHNOLOGY ENTERPRISE INSTITUTE

The Maryland Technology Enterprise Institute (MTECH), a unit of the A. James Clark School of Engineering, guides and accelerates new ventures, spurs economic growth, and brings university expertise to Maryland companies through technology entrepreneurship and research programs. www.mtech.umd.edu

MTECH

The Office of Technology Commercialization (OTC) is the technology transfer office at the University of Maryland College Park. As an office within the Division of Research, OTC facilitates the transfer of cutting-edge technologies developed at the University of Maryland as well as at smaller universities in the University System of Maryland to business and industry. OTC develops and manages a high-quality portfolio of diverse technologies, ensures intellectual property rights through patents or copyrights and negotiates and executes licensing agreements in order to provide benefits to the university and the local economy. www.otc.umd.edu

The Dingman Center helps students and regional entrepreneurs develop and grow their businesses through services and programs: The Dingman Process; Mentoring Services; Capital Access Network; and Events. The Center uses its strategic position within the Smith School to leverage resources from the entire University to assist enterprises, thereby acting as a window to the substantial entrepreneurial resources at the University of Maryland. www.rhsmith.umd.edu/dingman

The Maryland Small Business Development Center (SBDC) Network provides counseling and training assistance to small businesses. Clients of the SBDC work with professional business counselors to start new businesses or to expand their existing businesses. http://www.capitalregionsbdc.umd.edu/ MTECH VENTURES

University of Maryland Technology Start-Up Boot Camp

BOOT CAMP SPONSORS

Fish & Richardson P.C. is a national law firm with 300 lawyers in eight offices: Boston, Dallas, Delaware, New York, San Diego, Silicon Valley, Twin Cities, and Washington, DC. The firm is one of the largest firms practicing intellectual property, litigation, and corporate law and the only firm with a truly national intellectual property practice. Founded in 1878, the firm represented Thomas Edison, Alexander Graham Bell, and the Wright Brothers. For 125 years we have served great innovators, helping to protect countless ideas, nurture discoveries, and bring new concepts to market. The firm prosecuted and litigated many of the fundamental patents of an industrialized America, serving corporations creating the cutting-edge technologies of the day: the telephone, the air-brake, the steam turbine, the automobile, and the radio. Frederick Fish, the firm's founder, was for many years the acknowledged leader of the patent bar of the entire country at a time when patents were more important than they had ever been. Today, the firm continues to represent great innovators working in cuttingedge technologies. http://www.fr.com

The mission of the Technology Development Corporation is to facilitate the creation of businesses and foster their growth throughout all regions of the State through the development and transfer of technology as well as to respond to the needs of the R&D community by establishing and managing programs that fill gaps in the innovation process, focusing on those critical areas where the organization can add unique value, operating in partnership with other organizations through a flexible, technically oriented professional staff. Today, the firm continues to represent great innovators working in cutting-edge technologies. TEDCO offers access to capital, access to facilities, access to technology, and access to networks. http://www.marylandTEDCO.org

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University of Maryland Technology Start-Up Boot Camp

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo is a versatile law firm of more than 450 highly qualified and dedicated attorneys representing diverse international clients in many industries, who turn to them for a wide range of legal services and resources. Mintz's clients include major public corporations, privately held and family businesses, entrepreneurs, start-ups and emerging growth companies, investors, underwriters, directors and officers, research scientists, medical and academic institutions, public agencies and industry associations. The firm's legal expertise is coupled with industry knowledge in a wide range of industries, including recognized leadership in a number of fields where the Mintz's long track record helping clients to succeed has firmly established it as a "go-to" firm: biotechnology and life sciences, communications and information technology, high technology, and health care. Attorneys at Mintz Levin are driven by an entrepreneurial zeal that is one of the firm's defining characteristics and which translates into the innovative, energetic representation of clients. http://www.mintz.com

The National Collegiate Inventors and Innovators Alliance fosters invention, innovation, and entrepreneurship in higher education as a way of creating innovative, commercially viable, and socially beneficial businesses and employment opportunities in the United States. The program was founded on the premise that invention, Silver Sponsors innovation, and entrepreneurship are essential components of the higher education curriculum and vital to the nation's economic future. The NCIIA works with colleges and universities to build collaborative experiential learning programs that help nurture a new generation of innovators and entrepreneurs with strong technical and business skills and the tools and intention to make the world a better place. http://www.nciia.org

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University of Maryland Technology Start-Up Boot Camp

SUPPORTING ORGANIZATIONS

CONSORTIUM OF UNIVERSITIES

OF THE WASHINGTON METROPOLITAN AREA

The Tech Council of Maryland's mission is to serve as the preeminent technology think-tank where executives discuss ideas, innovate, and solve technology issues that lead to bigger business. With more than 600 member companies representing more than 200,000 forward thinkers from biotechnology, advanced technology, government, academia and the service provider industry, the Tech Council creates an environment where technology companies meet, learn and collaborate. http://www.mdhitech.org/

The Consortium of Universities of the Washington Metropolitan Area is a powerful force for the advancement of higher education in and around the nation's capital. Comprised of twelve universities and two colleges, the Consortium provides 130,000 students with opportunities to benefit from the combined resources of its members. The Consortium's record of public service is augmented by its impressive history of working with the area's government, business, school and community leaders to improve educational opportunities for all. http://www.consortium.org/

MdBio, Inc. is a private, non-profit corporation offering programs to advance the commercial development of bioscience in Maryland, including: Manufacturing Incentive Programs; experienced consulting; CostSharing Programs; Education/Workforce Development Programs; and Communications Programs that provide information for and about bioscience in Maryland to a variety of audiences. http://www.mdbio.org/

As one of the first and leading entrepreneurial centers in the nation, the Dingman Center for Entrepreneurship located at the Robert H. Smith School of Business at the University of Maryland facilitates, supports and guides student enterprise growth. As a nationally recognized leader in entrepreneurship education, the Center uses its strategic position within the Smith School to leverage resources from the entire University to assist enterprises, thereby acting as a window to the substantial entrepreneurial resources at the University of Maryland. http://www.smith.umd.edu/dingman/

The Greater Baltimore Technology Council is devoted to one goal: growing the region's tech community. We ask tech companies what they need to grow and provide it through innovative programs. We create forums where organizations can meet, learn and do business. And we celebrate the community's successes, spreading the word that technology businesses thrive here. The GBTC is made possible through grants from the Abell Foundation and the Maryland Department of Business an Economic Development. http://www.gbtechcouncil.org

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University of Maryland Technology Start-Up Boot Camp

Speaker Bio: Mark Anstey

Experienced in information services and high technology, Mr. Anstey has supported domestic and foreign companies ranging from entrepreneurial start-ups to $34BB multinational corporations. Comfortable working in traditional corporate environments and rapidly-evolving entrepreneurial situations, Mr. Anstey has consulted on a wide range of business opportunities, including the transition from conventional to e-commerce. His wide ranging career experience encompasses operations & management, strategic planning, business valuation & acquisitions, corporate financing, intellectual property protection & licensing, government & commercial contracting, and domestic & foreign facility start-ups. With degrees in both engineering and management, Mr. Anstey has a demonstrated ability to quickly understand complex technical and business issues. He possesses the essential ability to effectively communicate with audiences covering the full spectrum of technical literacy, including investors, customers, corporate management and general staff. Mr. Anstey was honoured with the Maryland Technology Council's 2005 Entrepreneur of the Year Award.

Mark Anstey President, DataStream Conversion Services, LLC and Potomac Publishing Company 301-405-1896 [email protected]

Speaker Bio: Gilmer Blankenship

Dr. Gilmer L. Blankenship , Chairman of TSi, has conducted research in control system science for more than 25 years. His research interests include applications of signal processing, scheduling theory and applications, nonlinear and adaptive control theory, and the design and application of software systems. He has published more than 120 papers and reports in these areas. Dr. Blankenship is also Professor and Associate Chairman of the Department of Electrical and Computer Engineering at the University of Maryland , College Park. His MS and Ph.D. students work at universities, research laboratories, and high technology companies around the world.

Gilmer Blankenship Chairman, TechnoSciences, Inc. (301) 577-6000 [email protected]

He is a Fellow of the IEEE.

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University of Maryland Technology Start-Up Boot Camp

Speaker Bio: Brownell Chalstrom

Brownell Chalstrom has worked with Avansis since 2002. He is currently a member of the board of directors of StoredIQ (formerly Deepfile) in Austin. Brownell has been a pioneer at the intersection of software and communications. He was General Manager of Lotus Notes and an engineering Vice President at BBN. He helped found three start-ups (Amplitude, PrimeStreet, and Ceres Systems). He has consulted to a number of leading companies, including Microsoft, Verizon, Polycom, Unisys, and Xircom. He was the marketing VP at DataCore Software and JetForm (now Adobe). He earned engineering degrees from MIT and the University of California Berkeley.

Brownell Chalstrom Venture Partner, Avansis Ventures (410) 295-1622 [email protected]

Speaker Bio: Gina Dubbé

In her role as Managing Partner of Walker Ventures, Gina Dubbé is responsible for the qualification and selection of investment portfolio companies that are focused on selected technology areas. Gina has joined the Board of Directors of several of Walker Ventures' portfolio companies. As a trusted business advisor, the portfolio clients can expect Gina to provide management insight on strategic corporate and technology direction, as well as assistance in fund raising strategies. Competitively positioning companies, products and technologies is what Gina does best. With 15 years of cross-functional expertise, her background has encompassed all sales, marketing and business development arenas in tandem with solid engineering, general management, organizational development and project management qualifications. Prior to the founding of Walker Ventures, Gina held several key sales and engineering management positions with RJO Enterprises, Inc., ORACLE Corporation, PRC Corporation, Interleaf Corporation, and Trusted Information Systems. In each assignment, she identified and capitalized on emerging market opportunities, building flagship programs to capture national accounts within the public and private business sectors. Her responsibilities have encompassed strategic sales and marketing planning and implementation, business development, product positioning, and recruitment/development. She has traveled worldwide, negotiating licensing contracts, multi-channel partnerships and direct sales relationships. Gina is a Licensed Professional Engineer (Virginia) with a Bachelor's degree in Industrial Engineering from West Virginia University and a Master's degree in Engineering from George Washington University.

Gina Dubbé Managing Partner, Walker Ventures (301) 854-6711 [email protected]

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University of Maryland Technology Start-Up Boot Camp

Speaker Bio: David Eisner

David E. Eisner founded Dataprise, Inc. in 1995 and has served as its President and CEO since that time. Under Mr. Eisner, Dataprise has grown into a recognized industry leader providing premier network and information technology services to the small and medium size business market. Mr. Eisner is responsible for the company's overall vision and overseeing all aspects of the company's development and operations. Mr. Eisner has more than 15 years industry experience with such companies as I-NET, Inc., SRA International and IBM. Mr. Eisner earned a BS in Computer Science from the University of Maryland in 1990 and an MS in Computer Science from Johns Hopkins University in 2001. Mr. Eisner is a member of the Young Entrepreneurs' Organization and sits on several organizational boards including the Board of Visitors for the College of Computer, Mathematical, and Physical Sciences at the University of Maryland. In 2004, Mr. Eisner co-authored Inside the Minds: Managing for Profit Centers, a leading book on key business strategies. Mr. Eisner was recently named winner of the Ernst & Young Entrepreneur Of The Year 2005 award.

David Eisner Founder, President and CEO, Dataprise, Inc. (301) 231-6075 [email protected]

Speaker Bio: Nariman Farvardin

Nariman Farvardin became dean of the A. James Clark School of Engineering in 2001, after serving five years as chair of the department of electrical and computer engineering. He joined the university in January 1984, as a professor of electrical and computer engineering with a joint appointment with the Institute of System Research. Dean Farvardin was also a visiting professor at Ecole Nationale Superieure des Telecommunications, Paris, France, during 199091. Dean Farvardin's research interests include information theory and coding, signal compression with applications to speech, image and video coding and transmission, high-speed communication networks, wireless systems and networks, and speech and speaker recognition. In 1987, he received the Presidential Young Investigator Award from the National Science Foundation. In 1992, Dr. Farvardin received the Maryland Industrial Partnerships Award of Excellence and in 1993, he received the Outstanding Systems Engineering Faculty Award from the Institute for System Research, University of Maryland. He served as the faculty advisor of a team of students from the University of Maryland that received the American Division Award of the 1995 Texas Instruments DSP Solutions Challenge, and in 1999, he received the Invention of the Year Award from the University of Maryland. Dr. Farvardin is a Fellow of the IEEE, and was the Associate Editor for Quantization, Speech/ Image Coding of the IEEE Transactions on Communications during 1986-90 and the Associate Editor for Source Coding of the IEEE Transactions on Information Theory during 1992-95. He chaired the technical program committee of the IEEE Speech Coding Workshop, Annapolis, Maryland, 1995. Nariman Farvardin received the B.S., M.S., and Ph.D. degrees in electrical engineering from Rensselaer Polytechnic Institute, Troy, NY, in 1979, 1980, and 1983, respectively.

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Nariman Farvardin Dean, A. James Clark School of Engineering 301-405-3869 [email protected]

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University of Maryland Technology Start-Up Boot Camp

Speaker Bio: Christopher Foster

As Maryland's Deputy Secretary of Business and Economic Development, Christopher C. Foster is responsible for the day-to-day operations of the state's commerce department with a budget in excess of $100 million. Mr. Foster also serves as the state's Chief Technology Officer, where he manages the Early Seed Stage Venture Fund. He has an extensive background in software design and applications, engineering and physics, and will serve as the central point person to spur Maryland's growth as a major center for intellectual capital. Mr. Foster most recently served as president and chief executive officer of Professional Development Solutions, a health care benefits software development company that developed web-based health care benefits administration software targeted toward insurance brokerage companies. His current position is the culmination of a career in which he has been president of a health-care software firm, a chief technology officer, an aviation logistics manager for a U.S. Marines Corps multi-billion dollar aircraft procurement program and Associate Chairman of the Electrical Engineering Department at the U.S. Naval Academy. Mr. Foster also served as an Aviation Logistics Manager for the U.S. Marine Corps and had responsibilities for programs including the V-22 Program Task Force, a multi-billion dollar aircraft procurement program. In that position, he also worked as a Science and Technology and Logistics subject matter expert for congressional testimony to the House and Senate Armed Forces Committees and the Joint Chiefs Requirement Council. Prior to taking that position, he was the Associate Chairman of Electrical Engineering at the U.S. Naval Academy, supervising 35 Ph.D. faculty and 12 lab technicians. Mr. Foster attended the U.S. Naval Postgraduate School where he received an Applied Scientist Degree in Electrical Engineering, with an emphasis on optical switch design; and also earned a Master's Degree in Applied Physics, with an emphasis on electro-optics and lasers; and a Master's Degree in Electrical Engineering, with an emphasis on digital communications, spread spectrum, and coding.

Chris Foster Deputy Secretary, Maryland Department of Business and Economic Development (410) 767-6302 [email protected] choosemaryland.org

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Speaker Bio: Steven Fritz

Dr. Steven Fritz was named Director, Technology Transfer for the Maryland Technology Development Corporation (TEDCO) in August 2000. His areas of responsibility include management of the university technology development fund and the TEDCO technology investment fund programs, outreach to university and federal laboratory technology transfer offices, and coordination of business development. Prior to joining TEDCO, Dr. Steven Fritz was Associate Vice President, Research and Development at the University of Maryland, Baltimore, a post he assumed in October 1997. Dr. Fritz had also served as Director of the Office of Technology Development from March 1995 until October 1997. Dr. Fritz was awarded the Ph.D. in Radiation Biophysics from the University of Kansas in 1979. He was on the faculty of the Diagnostic Radiology Department at the University of Kansas School of Medicine from 1977 until 1986, earning tenure and rising to the rank of Associate Professor. In 1986, he became Chief of the Imaging Physics section of the Department of Diagnostic Radiology in the School of Medicine at the University of Maryland, Baltimore. He was awarded tenure at the University of Maryland in 1988, and presided over the growth of Imaging Physics to a total of four faculty members and two research associates. Dr. Fritz is a diplomate of the American Board of Radiology in Diagnostic Radiology Physics. He is also a member of the Association of University Technology Managers (AUTM) and the Licensing Executives Society (LES). He is married, with three grown children, and resides in Columbia, Maryland.

Steven L. Fritz Director, Technology Transfer, Maryland Technology Development Corporation 410-715-4166 [email protected]

Speaker Bio: Jacques Gansler

The Honorable Jacques S. Gansler is Vice President for Research at the University of Maryland; he is also Professor and Roger C. Lipitz Chair in Public Policy and Private Enterprise, and Director, Center for Public Policy and Private Enterprise. Gansler, former Under Secretary of Defense for Acquisition, Technology and Logistics, is the first holder of the Roger C. Lipitz Chair in Public Policy and Private Enterprise. As the third ranking civilian at the Pentagon from 1997 to 2001, Professor Gansler was responsible for all research and development, acquisition reform, logistics, advanced technology, environmental security, defense industry, and numerous other security programs. Before joining the Clinton Administration, Dr. Gansler held a variety of positions in government and the private sector, including Deputy Assistant Secretary of Defense (Material Acquisition), Assistant Director of Defense Research and Engineering (Electronics), Vice President of ITT, engineering and management positions with Singer and Raytheon Corporations, and Exec. V.P. TASC. Throughout his career, Dr. Gansler has written, published and taught on subjects related to his work. He is the author of Defense Conversion: Transforming the Arsenal of Democracy, MIT Press, 1995; Affording Defense, MIT Press, 1989, and The Defense Industry, MIT Press, 1980. He has published numerous articles in Foreign Affairs, Harvard Business Review, International Security, Public Affairs, and other journals as well as newspapers and frequent Congressional testimonies. He is a member of the National Academy of Engineering and a Fellow of the National Academy of Public Administration.

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Jacques Gansler Vice President for Research, University of Maryland (301) 405-4794 [email protected]

MTECH

University of Maryland Technology Start-Up Boot Camp

Speaker Bio: Phil Gross

Philip J. Gross is the Managing Director of Expense Reduction Analysts, Inc. (www.era-usa. com). ERA is an international consultantcy focused on helping middle market companies increase their profitability through improved procurement practices. ERA operates on a no-risk, contingency fee basis -- no savings - no fee. Mr. Gross has spent the past twenty five years in the world of entrepreneurship. He is a serial entrepreneur, an active early stage investor, a mentor to entrepreneurs and a member of several boards. Early in his career he held several corporate positions at MCI and served as the CFO of America Online. He has also served as the entrepreneur in residence at the Dingman Center and as an adjunct professor of entrepreneurship at the Smith School of Business at the University of Maryland. He holds B.A. and M.P.A. degrees from Syracuse University and is a CPA.

Phil Gross Managing Director, Expense Reduction Analysts, Inc. (301) 467-4832 [email protected]

Speaker Bio: Richard Harris

Richard Harris has led investments in a variety of successful technology companies, including Cronos Integrated Microsystems and Woodwind Communications. Harris currently serves on the board of directors of several portfolio companies including Digital 5, MDLinx, Lamina Ceramics and Nexteme Thermal Solutions. Prior to joining SpaceVest, Harris was a program manager for the Dingman Center of Entrepreneurship, where he was responsible for linking emerging businesses with capital sources. Harris is also a former practicing attorney, specializing in civil litigation and intellectual property law. An active member of the mid-Atlantic entrepreneurial community, Harris is a former board member of the Mid-Atlantic Venture Capital Association (MAVA) and was a founder and past chairman of the Young Atlantic Venture Association. He currently serves on the steering committee of Capital Connections, the annual conference of MAVA. Harris is also a frequent lecturer at the University of Maryland, where he is a former Clinical Professor for the University of Maryland R.H. Smith School of Business. Harris received his B.A. in Economics from Denison University, and both his M.B.A. in Finance and J.D. from the University of Maryland, where he was awarded the James E. Dingman Scholarship in Entrepreneurship and served as associate editor of The Business Lawyer.

Richard Harris Managing Director, SpaceVest Capital (703) 904-9800 [email protected]

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Speaker Bio: Martin Knott

Martin founded The Shepherd Group after serving as a Managing Director of two global executive search firms and 30 years of senior level executive experience within a multitude of industries. Prior to entering the search industry, he was the owner/CEO of an East Coast based engineering and construction company serving the Mid-Atlantic region, and Chairman and CEO of a major real estate holding company. Martin, an active angel investor and venture capitalist, has served as interim COO for one of his portfolio companies, an entertainment and media corporation. He also has served as a director of several public and private firms. Martin's search experiences and areas of concentration are in the financial services and emerging growth sectors (primarily technology and biotechnology), as well as, the construction and professional services industries.

Martin Knott Managing Director, The Shepherd Group (410) 327-9133 [email protected] shepherdsearch.com

Over the years, Martin has been very active in his community such as serving as Chairman of the American Red Cross of the Chesapeake region and as a Director of the Kennedy Krieger Institute. Currently, he serves on the Advisory Council for the School of Architecture at the University of Notre Dame, South Bend, Indiana; on the Board of The Baltimore Symphony, and on the Board of the Emerging Technology Center in Baltimore. Martin served in the United States Marine Corps and is a graduate of Loyola College in Maryland.

Speaker Bio: Scott Laughlin

A graduate of Princeton University, Mr. Laughlin started his career in technology at International Data Group, publisher of 130 different magazines and newspapers around the world including Computer World, PC World, and Network World. At IDG, he served in various research, marketing, sales, and management positions, capping his early career with the launch of The Web, a magazine about the then emerging Internet. Following IDG, Laughlin was the earliest senior manager of LinkExchange, a ground-breaking technology company in the online marketing arena. Microsoft acquired LinkExchange in 1998, following which Laughlin worked as a Group Program Manager overseeing the design and coding of several of Microsoft's web-delivered applications for the small business market. Following Microsoft, Laughlin returned to IDG as a partner in their Silicon Valley venture capital group, IDG Ventures. IDG Ventures manages over $600M in early stage capital invested in North America, Europe and China. During this time, Laughlin evaluated hundreds of new company business plans and investment opportunities. His investments include Xythos Software. In his career, Laughlin has advised several early-stage technology companies in markets ranging from e-commerce to gaming to enterprise software to computing hardware. Companies include Zappos.com, TellMe, AirTegrity, Eurekster, and TruGamerz. Laughlin is also a Director of LM&O Advertising and College Parents Services, Inc. Currently, Laughlin is a Senior Lecturer in Entrepreneurship at the University of Maryland's Hinman CEOs Program and is a member of the Advisory Board for the A. James Clark School of Engineering's Technology Advancement Program (TAP).

Scott Laughlin Director, VentureAccelerator Program (301) 314-7804 [email protected]

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Scott Magids Director, MTECH Ventures 301-314-7803 [email protected]

MTECH

Speaker Bio: Scott Magids

Scott Magids is the Director of MTECH Ventures, the vehicle for technology entrepreneurship within the Clark School of Engineering at the University of Maryland. At MTECH Ventures, Scott leads a team which helps technical entrepreneurs start and build growth companies, and which provides valuable entrepreneurship education to technologists. Scott directs marketing, deal-sourcing and selection activities, and he actively consults MTECH Ventures' portfolio companies with executive recruiting, business planning, and capital formation. Scott is a principal architect and executor of the Clark School's regional technology entrepreneurship strategy. Prior to arriving at the University, Scott spent ten years working as a successful entrepreneur and private equity investor. Scott has founded and led companies in the IT outsourcing and brand research markets. In addition, he has led or participated in private equity projects in the communications equipment, contract manufacturing, and marketing services industries. Scott has significant experience developing and executing processes for venture and private equity investments. Scott serves on the boards of directors of Robert Charles Group, Inc., Aspirient LLC, and Brand Informatics, Inc. In addition, Scott teaches courses on technology entrepreneurship at the University of Maryland. Scott graduated magna cum laude from the University of Maryland with a degree in finance.

Speaker Bio: Andrew Scherer

Andrew Scherer is CEO of Scherer Cybrarian Services, a research-based consulting firm. Scherer Cybrarian offers a full range of market research services including primary and secondary research, news tracking and reputation monitoring, and GIS and consumer segmentation analysis. Founded in 1996, the firm's clients range from Fortune 500 firms to technology start-ups. Mr. Scherer also works with the Maryland Technology Development Corporation reviewing funding proposals, and serves as CFO of Tentrus LLC, a technology start-up based in Northern Virginia, offering satellite-based broadband Internet access.

Andrew Scherer CEO, Scherer Cybrarian Services (443) 535-0642 [email protected]

Prior to joining Scherer Cybrarian Services in 1999, Mr. Scherer directed mergers and acquisitions and project development for Omaha-based Peter Kiewit Sons' and its electric utility subsidiary, MidAmerican Energy. During his tenure, he was responsible for several major corporate acquisitions and two energy based startups. Mr. Scherer joined Peter Kiewit Sons' in 1993 from Signet Bank, where he was a senior member of the corporate finance team. He began his career as a field engineer with Schlumberger, a leading oilfield service firm. Mr. Scherer earned his BS in electrical engineering from Duke University in 1980 and his MBA in finance from the University of Chicago in 1988.

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Speaker Bio: Phil Weilerstein

Phil Weilerstein is currently the Executive Director of the National Collegiate Inventors and Innovators Alliance (NCIIA), a national program designed to encourage and support the incorporation of innovation and entrepreneurship in higher education curriculum. The Alliance is an initiative of The Lemelson Foundation, and a program of Five Colleges, Inc. in Amherst, Massachusetts, that provides grants for curriculum development and student venture creation, resources for faculty and students, and sponsors conferences and workshops for faculty and students. Weilerstein attended the University of Massachusetts Amherst where, as a graduate student, he co-founded EcoScience Corporation, a publicly held biotechnology company. In addition to his role with the NCIIA, Weilerstein consults for a variety of startup firms in the areas of strategic planning and quality management.

Phil Weilerstein Executive Director, National Collegiate Inventors and Innovators Alliance 413-587-2172 [email protected]

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READING LIST

· · · · · · · · · · · · · · · · · · · · "101 Marketing Tips for your Business: Increase your profits and stay within your budget," by Jeff Davidson; Entrepreneur Media Inc.; (February 2002) "Biomimicry: Innovation Inspired by Nature," by Janine M. Benyus; Perennial; (September 2002) "Bringing New Technology to Market," by Kathleen R. Allen; Prentice Hall; (2003) "Business Plans Made Easy: It's not as hard as you think!" 2nd ed., by Mark Henricks; Entrepreneur Media Inc.; (April 1999) "Creative Selling," by Dave Donelson; Entrepreneur Media Inc.; 1 edition (September 1, 2000) "Crossing the Chasm," by Geoffry Moore; HarperBusiness; Revised edition (August 20, 2002) "Defining, Designing, and Launching Market Aimed Products," by Dave Biggs; Dogwood Publishing Co. Inc.; (July 1997) "Disclosing the New Worlds: Entrepreneurship, Democratic Action, and the Cultivation of Solidarity," by Charles Spinosa; MIT Press; Reprint edition (February 26, 1999) "Entreprenuership.com.," by Tim Burns; Dearborn Trade Publishing "Financing Your New or Growing Business: Finding and raising capital for your venture," by Ralph Alterowitz; Entrepreneur Media Inc.; 1st edition (June 15, 2002) "Good to Great: Why Some Companies Make the Leap...and Others Don't," by Jim Collins; HarperAudio; Abridged edition (October 16, 2001) "High-Tech Ventures: The Guide for Entrepreneurial Success," by Gordon C. Bell; Perseus Publishing; 1st edition (April 1991) "Innovation and Entrepreneurship," by Peter F. Drucker; HarperBusiness; 1st edition (May 1993) "Inventing Modern America: From the Microwave to the Mouse," by David E. Brown; MIT Press; Reprint edition (April 2003) "Legal Basics of Tech Transfer Licensing," by Barry Rein "Leveraging the Horizon: Secrets of a Serial Entrepreneur," by Edwin R. Addison "Managing Corporate Culture, Innovation, and Intrapreneurship," by Howard W. Oden; Greenwood Publishing Group; (June 30, 1997) "Natural Capitalism: Creating the Next Industrial Revolution," by Paul Hawken; Back Bay Books; 1st edition (October 2000) "Our Own Devices: The Past and Future Body of Technology," by Edward Tener "Patent It Yourself," 4th edition, by David Pressman; Nolo Press; 9th edition (July 2002)

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· · · · · · · · · · · · "Startup Financing: An Entrepreneur's Guide to Financing a New or Growing Business," by William J. Stolze; Career Press; (August 1997) "Startup: An Entrepreneur's Guide to Launching and Managing a New Business," 2nd edition, by William J. Stolze; Rock Beach Press "Survival is not enough: Why smart Companies abandon worry and embrace change," by Seth Godin; Touchstone Books; (December 3, 2002) "Technology Transfer: Making the Most of Your Intellectual Property," by Neil F. Sullivan; Cambridge University Press; (December 1995) "Technology Ventures: From Idea to Enterprise," by Richard C. Dorf and Thomas H. Byers; McGraw Hill; (2005) "The Art of Innovation: Lessons in Creativity from Ideo, America's Leading Design Firm," by Tom Kelley; Doubleday; (January 16, 2001) "The Portable MBA in Entrepreneurship," 2nd Edition, by William D. Bygrave; John Wiley & Sons; 2nd edition (February 13, 1997) "The Ultimate Competitive Advantage: Secrets of continually developing a More Profitable Business Model," by Donald Mitchell; Berrett-Koehler Pub; (March 2003) "They All Laughed...From Light Bulbs to Lasers: The Fascinating Stories Behind the Great inventions that have changed our lives," by Ira Flatow; Perennial; Reprint edition (June 1993) "Unleashing the Ideavirus," by Seth Godin; S&S Sound Ideas; (March 2001) "Why Things Bite Back: Technology and the Revenge of the Unintended," by Edward Tenner; Vintage Books; Reprint edition (September 1997) "You Need to Be a Little Crazy," by Barry Moltz; Dearborn Trade Publishing; (October 2003)

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LEGAL FORMS OF BUSINESS

The following chart is a general review based upon the laws of the State of Delaware applicable to business entities and US Federal income tax laws and regulations. This chart does not constitute an opinion or legal advice. Please consult an attorney or tax adviser for further information. Many state laws are similar to those in Delaware, but important differences do exist. There are other variations on types of business entities that are not described below, especially for specialized service business such as medicine, law, accounting, etc.

Ownership Classes of Owners

Sole Proprietorship

Partnership

"S" Corporation No more than 75 individuals One class of economic interests

By a single individual By two or more individuals N/A Unlimited as to economics and voting power Entirely in hands of proprietor Life of proprietor

Management Term

Different voting classes allowed By general partners 1 or more directors Governed by contract - Generally ends after stated period, or death or bankruptcy of a general partner Unlimited for general partners. General partners are jointly and severally liable for obligations of partnership. Limited partner's liability limited to amount invested Partners taxed on share of partnership income whether or not distributed LPs file certificate of limited partnership with state Partnership Agreement not public Perpetual, unless by state law or charter

Limited Liability Company No limits on type and number of members Unlimited as to economics and voting power

"C" Corporation No limits on type and number of stockholders Unlimited as to economics and voting power

Optional ­ owners 1 or more directors (members) or directors (managers) Governed by contract Perpetual, unless by state law or - May be for a stated charter period or perpetual

Liability of Owners

Unlimited

Generally limited to investment in corporation's stock

Limited to amount of investment, or as specified in organizational documents

Generally limited to investment in corporation's stock

Taxation

Organization

Owner taxed on business profits whether or not distributed No requirements

Stockholders taxed on taxable income of corporation, whether or not distributed Certificate of incorporation filed with state Bylaws not public

Optional ­ LLC may choose to be taxed like a "C" corporation or like a partnership Certificate of formation filed with state Operating Agreement not public

Corporation taxed on taxable income, whether or not distributed to stockholders Certificate of incorporation filed with state Bylaws not public

Accounting

Cash

May be limited to accrual

Form 2553 filed with IRS Cash or accrual May be limited to accrual

Must use accrual

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LEGAL FORMS OF BUSINESS

Sole Proprietorship Partnership Extremely rare ­ some limited partnership's, usually in oil and gas industry "S" Corporation Must convert to "C" corporation Limited Liability Company Generally would convert to "C" corporation, with adverse tax consequences of conversion Limited liability May avoid double taxation Perpetual existence Continuity of management Readily transferable interests "C" Corporation Yes

IPO Possible? No

Advantages

Easy to form Flexible Proprietor has complete control Low overhead Avoids double taxation

GPs easy to form and Limited liability generally limited public disclosure Avoids double taxation Flexible Avoids double taxation Perpetual existence Continuity of management Readily transferable interests (to proper buyers)

Limited liability Easiest to raise capital ­ VCs will generally require Perpetual existence Continuity of management Readily transferable interests Can use equity incentives (Stock Options) Easier to hire professional managers

Can use equity incentives (Stock Options) Easier to raise capital Easier to hire professional Can use equity managers incentives (Stock Options) Easier to hire professional managers Disadvantages Unlimited personal Unlimited personal liability liability for general partners No perpetual Only one class of Difficult, costly economic interest allowed formation

Subject to close Difficult, costly formation Subject to close government regulation existence government regulation Joint and several liability Subject to close Inflexibility of operations Difficulty in raising No perpetual existence government regulation Still fairly novel form Double taxation capital Inflexibility of operations Division of control/ Must follow corporate May be difficult to authority Must follow corporate formalities to preserve hire professional formalities to preserve limited liability managers Difficult to find limited liability compatible partners Proprietor's wages not tax deductible Difficult to raise additional capital Partner's wages not tax deductible

Difficult, costly formation

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GLOSSARY OF TERMS

Angel Investor Individuals who back emerging entrepreneurial ventures, sometimes as a bridge to CFO venture capital. Funding levels typically range from $50,000 to $2 million. Angel investors are often thought of as successful, sophisticated business people but the term can apply to all individual investors in a company (see "Three F's"). Angel Group A group of angel investors, an angel group may be an informal meeting of investors where investors see company presentations collectively but make decisions individually, or it may be a more formal group. In the most formal form, angel groups function as "democratic" venture funds in which a paid manager facilitates the process but instead of making investment decisions, defers to individual investors. Audited financial statements A company's financial statements which have been prepared and certified by a Certified Public Accountant. Lesser levels of preparation by outside auditors, without certification, include review and compilation. Balance Sheet A quantitative summary of a company's financial condition at a specific point in time, including assets, liabilities and net worth. Beta Site A test site of a company's product, usually at a customer's location. The Beta site is important to provide "real world" validation for the product/service and hopefully to provide a reference account. Careful thought should be put into the selection of a Beta site. Blue Sky State regulations governing the sale of securities and mutual funds, designed to safeguard investors from being lured into fraudulent or unscrupulous deals. Board of Advisors A less formal alternative to a Board of Directors most commonly used by small companies. A company's advisory board might consists of 3 to 7 members, and meet periodically but doesn't have fiduciary responsibility for company operations. Many small technology companies have both Board of Directors and Board of Advisors, particularly biotech companies which often try to obtain prominent scientists to sit on their Scientific Board of Advisors. Board of Directors Individuals elected by a corporation's shareholders oversee the management of the corporation. The members of a Board of Directors may be uncompensated or may be paid in cash and/or stock. Typically with an early stage company, a Board will meet monthly. A Board of Directors has legal, fiduciary responsibility for corporate activities. Burn rate Burn rate is the negative cashflow of a company before operations. It may also be used to refer to the net negative cashflow of a company with consistent revenue. A typically question from an interested investor is, "What's your monthly burn?"

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"C" corporation Corporations afford their owners and operators with limited liability in most situations and provide clear mechanisms for business management and defined mechanisms for management, equity ownership and other corporate practices. Corporations are owned by shareholders who elect a board of directors to direct management, corporations are operated day-to-day by officers who are appointed by the board. The most common form of corporation is the "C" corporation in which the corporation is which is taxed as a separate entity separate from its owners. Owners may receive compensation through employment and/or through dividends. Typically, institutional investors like venture capitalists will only invest a "C" corporation. Competitive analysis An analysis of the competition in the market in which a company is operating. Capitalization Table A statement that describes the stock of a company, including common stock, preferred stock, options, warrants and other equity instruments. Cash Flow CASH IS KING and positive cash flow means most simply that a company is bringing in more money in revenue than it's putting out in expenditures. More technically, it equals net profit plus changes in inventory, accounts receivable and payable, and amounts charged off for depreciation and amortization, less capital expenditures, plus receipts from financing. (See operating cashflow below). Cash Flow, Operating Operating cash flow (or "free cash flow") is the same calculation as overall cash flow, but only takes into account cash flows from operations (in other words it does not include items like receipts from financing). This is typically what people are referring to when asking about cash flow. Cash Flow Breakeven The point at which cash from revenues and receivables into a business equal expenses and cash for payables out of a business. Cash Flow Statement A summary of a company's cash flow over a given period of time. CEO The executive who is responsible for a company's operations, sometimes the same person as the President and in other cases the same person as the Chair of the Board. If a position separate from the President, the CEO has a broader strategic perspective on the business and the President assumes more of an operating role. In an early stage company, the CEO slot is often reserved for a more senior person, brought on board coincidentally with a major round of financing. CFO The executive who is responsible for financial planning and record keeping for a company. Often they will have responsibility for investor relations, financing and deal structuring, although in close association with the President and CEO.

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Chair of the Board The leader of a corporation's Board of Directors. Presides over corporate meetings. Sometimes has executive authority over a firm (when combined with the CEO title), sometimes does not. CIO The most senior information technology person in a company. Typically a title reserved for companies that make significant use of information technology (such as a bank or insurance company) rather than a title used by a technology company (see "CTO"). Common stock Securities representing equity ownership in a corporation, providing voting rights, and entitling the holder to a share of the company's success through dividends and/or capital appreciation. Prior to an IPO, typically Common Stock is held by founders and reserved for employees through Stock Options; investors will usually use a preferred investment instrument (see Preferred Stock). Competitive analysis An analysis of the competition in the market in which a company is operating. Controller Differentiated from a CFO by a focus on company operations, whereas the CFO assumes responsibility for broader strategic concerns and typically takes charge of relationships with the board of directors and with investors. Copyright A form of protection provided by the laws of the United States to the authors of "original works of authorship," including literary, dramatic, musical, artistic, and certain other intellectual works such as computer software. Cost of Equity Capital/Debt Capital The cost to the company of an investment or loan, usually in terms of interest requirements but may also include the cost of other features of the investment or debt instrument. Cross- License A cross-licensing deal is one in which two companies agree to a mutual or "cross" license of each others products or technology. CTO The Chief Technology Officer is often a founder in a technology company and is the most senior person in the company directly responsible for development of the company's technology (see also "CIO"). Deal Flow The never-ending flow of deals received by a venture capital company or angel group is referred to as their "dealflow." Debt Financing Financing by selling bonds, bills or notes to individuals or institutions or by borrowing from a bank. Debt Service The series of payments of interest and principal required on debt over a given period of time.

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Deferred Payment A debt which has been incurred and will be paid back at some point in the future. Can refer to compensation as well as financing. Dilution The reduction in earnings per share or share price that would result from issuing additional stock to raise capital or for an acquisition after a given investment (see also, "Fully Diluted"). Discount rate There are 2 common uses of the term. (1) The interest rate charged by the Federal Reserve for short-term loans to member banks, also called bank rate. The Fed can directly affect business growth by raising or lowering this discount rate. Also, the interest rate used in discounting future cash flows capital when making a Net Present Value (NPV) Discounted Cash flow (DCF) calculations. The discount rate used in NPV DCF calculations is not usually the same as that of (1) above. It may be the same as, or higher than the company's cost of capital. It is almost never less. See also Hurdle Rate below. Discounted cash flow A method of evaluating an investment by estimating future cash flows and taking into consideration the time value of money. Distribution channel(s) The way in which a company gets its products to market, examples of distribution channels being: value added distributors (VADS) ­ often used for hardware; value added resellers (VARS) -often used for software; systems integrators; manufacturer's representatives; agents (particularly in Europe or Asia); the internet; direct sales force; distributors/wholesalers, small retailers, retail chains, direct mailers, company owned stores, the Internet. Distributor/Wholesaler A company that buys merchandise from manufacturers and sells and delivers it to customers. Due diligence Usually undertaken by investors, but also customers, due diligence refers to the process of making sure that you are what you say you are and can do what you claim (e.g., does your product really work, do you really have customers etc.). Employee stock ownership plan A plan based on Federal law which establishes legal guidelines for employee ownership in a corporation. End-user The final customer for a product. For example, an OEM (e.g., Dell) incorporates a part (e.g. a chip from Intel) inside their product (e.g. a computer) and sells it to a company (their customer) who provides the product to their employee (the end user). Entrepreneur An individual who starts his/her own business. There are much more complex definitions of an entrepreneur, but for these purposes, this will be sufficient!

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Equity Companies sell stock or more generally "equity" to investors to in exchange for investment dollars. Equity is also what entrepreneurs retain as their ownership of the business. An increase in the valuation of a company's equity is an increase in the worth of the company. Exit strategy Refers to the method by which a company plans to allow its investors to "exit" its investors or get their money back plus a return on their investment. Examples are IPO; sale or merger of company. Exit strategy The exit formula, or how the entrepreneur envisions the investor will eventually liquidate his investment, is a critical section of the business plan. Entrepreneurs must demonstrate that they understand and anticipate the investor's exit. First-round financing The first formal investment in a company made by external investors. Not to be confused with seed financing, which is before first-round investment. Fully Diluted A capitalization table shown on a "fully diluted" basis is such a table shown if all warrants, stock options and convertible securities are taken into account and assumed to be exercised. Golden Handcuffs Rewards and disincentives designed to discourage key employees from leaving a company such as deferred compensation; option vesting. Hurdle Rate The required rate of return in a discounted cash flow Return on Investment (ROI) or Internal Rate of Return (IRR) analysis, above which an investment makes sense and below which it does not. Also called required rate of. Incubator Typically refers to a technology incubator, a technology development center that "incubates" or helps early stage companies develop. Often but not always housed in a single facility. Initial licensing fee Typically under a licensing agreement, there is an initial licensing fee and then a series of licensing payments, based on time, performance or both. Income Statement An accounting of sales, expenses, and net profit for a given period. Intellectual Property (IP) Any intangible asset that consists of human knowledge and ideas. IP is often codified/protected via patents, copyrights, trademarks, trade secrets. Internal rate of return (IRR) The rate of return that an investor makes on their investment--in other words, if an investor puts into a company X dollars on day 1, and takes out X+ dollars out at some future point(s), what is their percentage rate of return?

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University of Maryland Technology Start-Up Boot Camp

Intrapreneur A person who innovates with new business practices or products within a company, rather than going off to start their own company like an entrepreneur. IPO An Initial Public Offering is the first offering of securities to the general public by a company that had formerly been a private concern. The ambition of many entrepreneurs and investors because it offers the possibility of the greatest return. Key person insurance Life insurance purchased by a company or investor on the life of a key executive. Usually the company is the policy's beneficiary but the beneficiary may be investors or note holders. More typically called "key man" insurance. Lead Investor The investor that is taking a lead position in an investment in a company, usually because they are investment the largest portion of a "syndicated" investment but sometimes because they are most knowledgeable about a company or have make the first commitment to an investment and are leading the due diligence process. Typically a Lead Investor will have a board seat. Leverage The use of debt to increase returns. As an example, if you buy something worth $100,000 with $10,000 of your own money and a $90,000 loan you have "leveraged" your initial capital. Leveraged buyout Takeover of a company or controlling interest in a company, using a significant amount of borrowed money, usually 70% or more of the total purchase price. Licensing An arrangement whereby an inventor grants another person or company the right to make, use or sell his invention. In many cases, licensing is a viable alternative to starting a company and raising capital. In some cases it may be the most or only viable option because for a particular product it may be necessary to draw upon the capabilities of a larger company, the licensee. Licensing of an invention can be very profitable to the inventor if the invention succeeds in the marketplace and the license agreement is properly structured. Line of credit An arrangement in which a bank or vendor extends a specified amount of credit (secured or unsecured) to a specified borrower for a specified time period. LLC A Limited Liability Corporation is a legal entity that has the option of being taxed like a partnership (i.e., profits are not taxed at the corporate level but are passed through to the individual where they are taxed only once) and also shields personal assets from litigation and creditors like a corporation. Although these provisions also apply to an "S" corporation, an LLC gives the company much more flexibility in setting up its structures and classes of stock and can accept institutional as well as individual shareholders. Market Driven Company A company who's products or services are developed in response to market demand.

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Market share The percentage of the total sales of a given type of product or service in a region, a country or an industry that are attributable to a given company. Mentor An experienced individual ­usually some one who has been a successful entrepreneur or senior executive who is willing to spend time with a young company (usually at no or little cost) to help them grow their company (i.e. - a coach, a trusted advisor). Mezzanine Financing In an ideal financing sequence, the Series C round or third round of institutional financial, often but not always prior to some form of exit, either IPO or acquisition. Milestones Performance goals against which a company's success is measured. They are sometimes used to determine whether a company will receive additional financing or whether management will receive additional stock. Milestones are sometimes referred to as benchmarks, minimums or performance requirements. Milestone Payments Typically refers to payments by a customer, licensee, or by an investor against the successful completion, by the company, of pre-defined development milestones. OEM Original equipment manufacturer. See End User for an example. Outsourcing Purchasing a functional service for the company from another business. Types of services commonly outsourced are payroll, taxes, manufacturing, running a computer center and advertising. Partnership A business in which two or more individuals that carry on a continuing business for profit as co-owners. Legally, a partnership is regarded as a group of individuals rather than as a single entity. Partners may have equal or unequal ownership percentages. Patent A patent is legal protection for an invention giving the patent holder the sole right to use, manufacture, sell etc the patented "thing" for a period of 20 years from the date of issue. Inventions include any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement on any of the above. The patent holder may license to others the IP protected by the patent. Portfolio A collection of investments all owned by the same individual or organization. For example, when considering whether to approach a venture capitalist, it is useful to look at their "portfolio" to determine whether they have synergistic or competitive investments in other companies. Preemptive rights The right of current shareholders to maintain their fractional ownership of a company by buying a proportional number of shares of any future issue of common stock. Most states consider preemptive rights valid only if made explicit in a corporation's charter.

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Preferred stock Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over Common Stock in the event of a liquidation. Usually does not carry voting rights. However, preferred shareholders may have seats on the board of directors and depending upon the way the corporation is chartered, the board of directors may have substantive authority for company operations and strategy. Preferred stockholders may have conversion rights into Common Stock and may have stock that provides them with accumulated dividends. Product-Driven Company A company whose products are driven by technological breakthroughs or opportunities. A product-driven company develops its products in the context of market opportunities, but the driving force is more the possibility of successful product invention rather than the articulated needs of a customer. See "Technology-driven Company." Reference Account A customer account that serves as a point of reference for investors and others in the due diligence process. A reference account is ideally representative of forecasted sales. Return Also sometimes the discount rate used in a Net Present Value (NPV) DCF calculation. Royalty A payment made for the use of property, especially a patent, copyrighted work, franchise, or natural resource. The amount is usually a percentage of revenues obtained through its use. SBIR SBIR refers to -Small Business Innovation Research Grant, a U.S. government program that provides funding for research. In the right circumstances, the program can provide valuable seed capital for an entrepreneur's new product development activity. The SBIR grants are provided in 2 phases. Phase I ­ up to $100K for proof of concept work; Phase II ­ up to $1 million (except NIH which can sometimes be more) for prototype work and market studies. The SBIR program was created by the Small Business Innovation Development Act of 1982. It requires major government agencies to allocate a portion of their research and development funds to small private businesses through the SBIR program. Scientific Board of Advisors A Board of Advisors made up of scientists in a particular field, often used by biotech companies. Second-round financing Refers to the second round of institutional investment. See "First-round Financing") and "Series B". Seed Financing The first round of financing, often (but not always) by individuals and prior to "first-round," which is typically the first institutional round. Sensitivity analysis Investigation into how projected performance varies along with changes in the key assumptions on which the projections are based.

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Series A Refers to Series A preferred stock, which is typically the investment vehicle for first round investors. Series B Refers to Series B preferred stock, which is typically the investment vehicle for second round investors. Stock Option Plan A trust established by a corporation for the allocation of some of its stock to its employees over time, intended to motivate employees, and often providing tax benefits to the company. Strategic partnership A partnership in which you combine efforts in a business activity involving anything from getting a better price for goods by buying in bulk together to seeking business together with each of you providing part of the product. Sweat equity Equity acquired by a company's executives on favorable terms, to reflect the value the executives have added and will continue to add to the company. Syndicate Typically thought of as a group of investment banks which jointly underwrite and distribute a new security offering, for entrepreneurs it usually refers to a group of investors, individuals, institutions or a combination, who agree to invest together in a company. System integrator System Integrator (SI) ­ A company that combines products, components and software from different vendors into a workable system or subsystem for the customer (similar to a general contractor in the home building business). Technology Commercialization The processes by which technology is moved from the laboratory to the market place profitably. Technology-driven Company A company driven by technological breakthroughs or opportunities. Technology Development Center Such facilities are designed to help entrepreneurs create viable businesses from their innovations. Many state governments and universities sponsor programs to promote the development of new high tech companies in their areas. Many others are privately sponsored or associated with venture funds or angel investors. These programs locate several services in one facility, sometimes called technology development centers, accelerators, or incubators. If one exists nearby, management may be well advised to explore the services the center can provide. Technology Transfer The process by which technology is moved one or more steps along the path to commercialization (e.g., from University to development company; or from development company to manufacturing and marketing company).

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Term Sheet An outline of the terms of a proposed investment deal, typically set up to be a non-binding precursor to the actual financing agreements that will fully document a funding transaction. Term sheets serve the same purpose as letters of intent and are used frequently by venture capitalists to fix the terms of a deal before they complete their due diligence. While generally unenforceable, term sheets, like letters of intent, often contain binding agreements to prevent management from shopping the deal spelled out in the term sheet., term sheets vary in their level of formality and in the obligations they spell out for the company and the investors. A term sheet is proposed by investors, signed and accepted by the company, and is the precursor to a due diligence effort before the actual investment is made. Three F's The joke is that friends, family and fools are often the first money into a company but this is often true. A fourth "f" is sometimes added: faculty. Trade Secret A formula, process, system, tool, etc., which provides a company with a competitive advantage (Must be actively protected and a company must be able to show that it has taken measures to protect it). Trademark Legal protection for a word, name, symbol or device which is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others. A servicemark is the same as a trademark except that it identifies and legalizes a service. Traunch Refers to a defined injection of capital into a business. A given financing round (e.g. first round financing) may have multiple "traunches." For example, investors may commit a certain total amount to a company, but may invest that commitment over time in multiple trauches based on the meeting of set milestones. VAD-value added distributor A distributor that adds additional value in the form of consulting services or other support to their customers (resellers or retailers) in addition to the products they sell. VAR-value added reseller Similarly, a reseller retailer that adds additional value in the form of consulting services or other support to their customers (end-users) in addition to the products they sell. Venture capital A form of financing for a company in which the business gives up some level of ownership and control of the business in exchange for capital over a limited time frame, usually 3-5 years. The exit of the venture capitalist is typically through an IPO or an acquisition of the company. Warrants An agreement between the company and investors, that gives the holder of the warrant the right to purchase a certain number of shares of stock at a certain price within a certain time frame. Typically, warrants are associated with debt issuance.

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NOTES

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NOTES

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