Venture Capital for Founders and Investors

By Henri Swan

This book aligns entrepreneurship, innovation, investment, and exit to a rigorous footing, through emerging and proven practices, perfected by Silicon Valley's pioneers. It is a must-have walkthrough "blueprint for founders seeking to launch, fund, grow or exit their startup"; along with investor, engineer, product developer; corporate "innovati

• Language: English
• Publisher: Impact Ventures Press
• Release date: Nov 8, 2023
• ISBN: 9798868982897

Henri Swan

www.TheInnovator.us

Book preview

Venture Capital for Founders and Investors

by Silicon Valley Insiders

Those who dare to fail miserably can achieve greatly.

John F. Kennedy

Henri Swan

Author, Innovator, Entrepreneur, Investor, Speaker, and Lecturer

Venture Capital for Founders and Investors. Copyright © 2023 by Henri Swan.

No part of this book may be used or reproduced in any manner without written permission, except when used for brief quotations embodied in critical articles and reviews.

The advice, insights, and execution strategies found within may not be suitable for everyone or any situation. This work is sold with the understanding that neither the author nor the publisher be held responsible for the results accrued from the advice in this book

This book may be purchased for educational, business, or sales promotional use. For more information or to contact us, visit: www.TheInnovator.us

Impact Ventures Press, Silicon Valley, California

All rights reserved. Printed in the United States of America.

Library of Congress Control Number: 2022900311

ISBN: 979-8-8689-8289-7

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INTRODUCTION

W

e face pressing challenges. Eco-degradation, diseases, and new risks brought by the misaligned resources spent on bad innovation that challenged human development.

The solution lies in leveraging breakthroughs in technologies and sciences and a paradigm shift in venture funding, propelled by the fourth industrial revolution, enabling equitable and sustainable innovation models. Moreover, the nature of the innovation-driven development model demands a worldwide assessment and reshaping of leading innovation hubs, urgently of great relevance to ensure a better tomorrow.

We are at the dawn of business management’s first century. It is our challenge to capture the opportunity we have been given to ensure that those of us who seek to build the next big thing will have the how-to they need to impact the world positively, across tech, health, and science-based innovation.

This book aligns entrepreneurship, innovation, investment, and exit to a rigorous footing, through emerging and proven practices, perfected by Silicon Valley’s pioneers. It is a must-have walkthrough "blueprint for founders seeking to launch, fund, grow or exit their startup; along with investor, engineer, product developer; corporate innovation, investment or acquisition leader", advisor, and academic lecturer; in need of expanding their horizons, on taking to market innovation with impact.

It is an ideal reference manual, based on first-hand insider scope of thought leadership, packed with research from top tier institutions with actionable insights on startup, corporate innovation, and venture capital ecosystem showcasing a 360-degree cycle of innovation execution "masterfully crafted in a single volume of 400 pages with over 100 illustrated graphs and charts".

This volume leverages the experience of prominent innovators by capturing past, current, and projected future innovation, with deep dive into how innovation happens through each stage, and what to do or not to do during its execution. This shall be a prime source for anyone eager to understand or excel in innovation or venture capital.

DEDICATION

To the pioneer of Modern Tech and Scientific Innovation

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The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite insane. Nikola Tesla

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One never notices what has been done; one can only see what remains to be done. Two Nobel Laureate Marie Curie

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If I had asked the public what they wanted, they would have said a faster horse. Henry Ford

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Imagination is more important than knowledge. Albert Einstein

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If I have a thousand ideas and only one turns out to be good, I am satisfied.  Alfred Nobel

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A pile of rocks ceases to be a rock pile when somebody contemplates it with the idea of a cathedral in mind. Antoine Saint-Exupéry

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Innovation distinguishes between a leader and a follower. Steve Jobs

-------o-o-o-o-o-------

Instead of thinking outside the box, get rid of the box.

Deepak Chopra

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Women In Science Can Also Have Impact:

Nobel Laureate Emmanuelle Charpentier

CHAPTER I

INNOVATION TIMELINE

Ancient to Middle Ages Era:

Modern Age Revolutions:

Twenty-Century Tech Innovation:

Silicon Valley Emergence:

Takeaways:

CHAPTER II

WHAT’S INNOVATION

Innovative Culture:

Innovation vs Invention vs Patent:

First Wave of Tech Innovation:

Second Wave of Tech Innovation:

Third Wave of Tech Innovation:

What’s not Innovation:

Takeaways:

CHAPTER III

WHAT’S DISRUPTION

Disruptive innovation:

The Theory of Disruption:

Takeaways:

CHAPTER IV

HOW TO FUND

Venture Capital Landscape:

Assessing your Fundability:

Fundraising Proven Method:

Target Investors and Relationship Building

How Investors Make Decisions:

Startup Fundraising Roadmap

Fundraising Myths and Mistakes:

Legal & Compliance Foundation:

Takeaways:

CHAPTER V

HOW TO EXIT

Startup Acquisition:

Exit and IPO Strategy:

Exit Do’s and Don’ts:

Pivot or Persevere till Closure:

Exit Terms, Diligence and Data Room:

Startup Investments Performance:

Takeaways:

bibliography – index

Disclosure

ABOUT THE AUTHOR

CLOSING REMARKS

preface

O

ur media perpetuate a myth that entrepreneurs are born not made, by glorifying prominent innovators like Gates, Jobs, and Bezos; because they possess a superior sense of predicting the future, visualize a product then build it like a master chef performing masterful skill in front of your eyes.

This book will replace the entrepreneur myth with practical key steps from converting ideas into product vision and then iterating through sustainable startups with revenues and growth till exit. Enabling anyone to be an entrepreneur, as long you are driven, flexible, and a fast learner located anywhere in this world.

We will exclude the business school elaborate theories that had no relevance outside academia or large organization designed for the industrial era and focus on execution based on collective intelligence learned in Silicon Valley through years of execution by dealing, investing, and advising 1000’s startup, along top venture capital investors, Fortune 500 acquirers and Unicorn Exit.

To innovate, you do not need an MBA, Ph.D., or 10 years in R&D labs; rather a curious mind, a thirst to impact the world positively not changing it and the drive to make it happen no matter what.

Start by assessing your passion and desire to improve one product or service by 3X or more, that you happen to use or consume, then connect your vision to your skills, ability, and how you can disrupt a whole industry that becomes your purpose.

Innovation is not about a Startup that is worth billions through financial engineering but fails to sustain itself without new investments, monopolistic acquisition by market dominant players, or the false narrative of changing the world spread by certain business schools since the world cannot improve without their elite’s technocrat analyst and must depend on them to do so.

Instead, the world as we know it today is made of collective innovation accumulated through millions of years and copied, improved, and scaled by successive civilizations and dynasties which will be discussed further.

This book is about bringing clarity and transparency into the knowledge economy and helping accelerate its evolution further, by democratizing innovation execution and thought leadership, accessing actionable insights to level the playing field and help shape the current and future generation of innovators from across the world on how to execute incremental improvement to the human lives and solve pressing global challenges of our times.

Each chapter will take a deep dive into past, current, and future state projection and how to contribute or capitalize on each stage of future human evolution through disruptive innovation that solves pressing challenges instead of creating new ones.

And help avoid the repeat of the Covid-19 disaster that affected and impacted the human species in every aspect, and proven in a very harsh way, how vulnerable and unprotected we are against a virus iteration known to us for centuries as seasonal flu; even with perceived access to information i.e., unfiltered web that’s causing more harm than good.

CHAPTER I

INNOVATION TIMELINE

I

nnovation through "Necessity as a mother of innovation" started million years ago by first humans and evolved with civilizations, courage, sacrifice, and the need to improve and safeguard human beings, making our modern life possible.

Ancient to Middle Ages Era:

Helped shape the foundation of modern life from ancient times through the Middle age.

Prehistoric Era: 10m years to 10,000 years BC

Tools: hand made of stones, and bones to hint and self-protect

Fire: discovered and integrated into food and materials making

Boat: built using tools, fire, and wood to sail, ship, and discover

Ancient Time Era: 9,999 to 3,200 years BC.

Agriculture: settlement of large groups within the tribes to farm

Iron and Glass: invented and incorporated into a daily lifestyle.

Wheel: invented by perfecting tools and materials to haul things

Egyptian Era: 3150 to 332 years BC

Building: cut large stones, with a water channel as a transporter

Paper: papyrus which is the early version of our modern paper

Language: Africans created a first dialect through hieroglyphics

Greek Empire: 800 to 146 years BC.

Bridge: first arch bridge and the foundation of modern bridges

Algebra: first books solving equations with the Greek numbers

Computing: invented analog prediction of lunar-solar eclipses

Roman Empire: 600 BC to 400 years AD.

Concrete: mixed material used to build road and sewer systems

Turbine: first vertical water wheel for clean energy propulsion

Books: handwritten manuscripts used as newspapers or books

African Civilization: 200 BC to 100 years AD.

Commerce: first import of goods from tropical areas to Africa

Textile: craft gradually evolved from East Asia to the West

Navy Fleet: First developed by a Carthaginian in North Africa.

Indian Civilization: 500 BC to 100 years AD.

Number: Indian ancestor to the Arabic number used globally

Cotton: cultivation and incorporation into clothing and house

Weighting: created & used first scale to weigh gem and gold

Arab Civilization: 200 BC to 1200 years AD.

Robot: invented early automation with feedback mechanisms

Surgery: crafted a first science-based medical-surgical practice

Flying: invented the first working prototype to gravitate and fly

Chinese Civilization: 1050 BC to 1280 AD

Eyeglass: developed the first magnifying eye lens for reading

Money: led the first conversion from gold coin to paper money

Compass: first used for a building layout and ships navigation

Native American Civilization: 1800 BC to 1492 years AD.

Rubber: first developed and used to sustain various daily needs

Syringes: made of sharp animal bones to inject herbal medicine

Binaries Digit: Maya Civilization where the first to use a 0 & 1

Persian Civilization: 10 BC to 1500 years AD.

Calendar: first used solar number of days per year calculation

Canal: built the water irrigation with its management system

Battery: the chemical discovery was initially used for medicine

Jewish Civilization: 2000 BC to 1500 years AD.

Astronomy: Defined Science leading to Exploratory Discovery

Medicine: Crafted autopsy, diseases discovery including cholera

Education: gradually advanced secular domain and its methods

Christian Civilization: 100 to 1500 years AD.

Military: Led advance in the defense and offense technologies

Patents: created foundation method to protect inventors' right

Trade: Enabled progress in Agriculture, Shipping, and Banking

Islamic Civilization: 800 to 1500 years AD.

University: the first university was in Morocco, see (Guinness)

Sciences: led a major discovery in mathematics and sciences

Arts: Led Advance in architecture, literature, poetry, and music

The widespread use of Latin in Europe offered an integrated market for ideas, a network of educated innovators, in which new ideas were distributed and circulated. The structure of the medieval Christian Church also became an enabler throughout the continent which was called ‘Christendom’. In early modern Europe, national boundaries mattered little for the active and mobile community of intellectuals. Despite slow and uncomfortable travel between kingdoms.

Modern Age Revolutions:

Helped shape the foundation of innovation during the last 500 years.

Agriculture Revolution: 16th to mid 17th Century

Crop Rotation: the use of the same soil for a multi-harvesting.

Ownership: landowners evolved from solo to group with scale

Farming: scaled from manual labor to horses and big machines

Featured Contributing Countries:

Refrigeration (Perishable Food): US, Fertilizers: Germany

Perfection of horse-drawn seed press across the world

New Crops growth: potato, maize in Europe,chocolate in Mexico, coffee in Yemen, and clementine in Algeria.

Industrial Revolution: 17th Century to mid-19th Century.

Propulsion: Traction generated by the water and steam energy

Machine: handmade production transition into manufacturing

Steel: by converting the iron through a scaled chemicals process

Featured Contributing Countries:

Electricity: Nikola Tesla (Serbia), Generation (Edison), US

Microwave: Bangladesh, made by France, Germany, UK

Combustion Engine: first by French & German Inventor

Technical Revolution: 1940 to 1970s

Automation: manufacturing & shipping across large industries

Electronics: the incorporation of sensors into various hardware

Communication: human to human, and machine to machine

Featured Contributing Countries:

Assembly Line: Large scale at low cost first by Ford, USA

GPS: Global Positioning Satellite, Developed by NASA

Telephone: The First long distance calls made in Belgium

Digital Revolution: 1980s to 2000s

The Computing: Foundation of all modern software languages

Server: evolved from mainframe by IBM to portable storage

The Web: first human-to-machine interaction as read/write.

Featured Contributing Countries:

Computer: The Universal Computing Machine 1936, UK

Internet: Minitel by Telecom France 1980, CSN, US 1981

Mobile Phone: First East / West call - Motorola 1984, US

Twenty-Century Tech Innovation:

The most impactful technology innovation that helped shape the foundation of modern tech by Industry, innovators, and country are:

Data:

o Open Sources: c omputing languages/storage servers

o Real-Time Processing: For Video, Audio, and Text

o Human Languages Processing: ML AI and QC

Software:

o Live d ata p rocessing: ERP, Transaction, eCommer ce

o Cloud Computing: Open Nebula NASA,