Going from Project to Business: touches on risk assessment, valuation and other topics everyone should consider before pulling the trigger on an opportunity.

1. RAMPING UP:
Going from Project
to Business
Jim Rogers
October 20, 2009

2. Mission
Home grown economic development by
fostering the birth and nurturing the growth
of Oklahoma advanced technology companies

3. Business & Capital Lifecycle

4. Business & Capital Lifecycle

5. Project vs. Business
• A project centers around activity,
technology, function, and results
•A business centers around the same
things, except it takes its cues from a
market, rather than one contracting
entity
•So…
Business = Project + Market

6. Project Homework
•What am I doing?
•Who do I need to do this?
•Who else is doing anything close?
•Why isn’t anyone else doing this?
•How will I do this?

7. Market Homework
•Who’ll pay for this?
•How much will they pay?
•What else could they use?
•How will they get/buy it?
•What’re the cool kids doing?

8. Business Homework
•How much could I sell?
•How much could I make?
•What else could I be doing?
•Where will I get help?
•What will it take to get going?

9. The Question
VALUATION!!!

10. The Rough & Dirty Guide
•Take the amount of money you think
you’ll need
•Multiply that by 5x, 10x, or 20x
•These are exit multiples
•Divide that amount by how much you’re
willing to sell of your company (e.g. 20%,
30%, 40%)
•Divide that amount by 5
•That’s how much you need in profits by
Year 5

11. Example
•I need $250K, and I have a demo
•$250K x 20 = $5MM
•If I give 25%, then $5MM / .25 = $20MM
•$20MM / 5 = $4MM in earnings
•$4MM / .8 = $5MM in sales
•WHY????????????????

12. Now I Feel Sick…
•Don’t.
•Analyze your data…
•Analyze your assumptions…
•Analyze your plan…
•Analyze your wallet…
•Analyze your heart…

13. In Summary…
•Be creative
•Know your craft
•Know your market
•Ask for help (of all kinds) early and
often
•Go.

14. $DO || ! $DO ; try
try: command not found

15. Jim Rogers
405-813-2420
jrogers@i2E.org
www.i2E.org
http://jrr2ok.blogspot.com