How to Play With OPM
(OTHER PEOPLE’S MONEY)
Cantilever Background &
Timeline
• 1st business plan written by founders in
1997
– Financial models reviewed by outside
accountant
– Major analysis of competitive threats
– Tremendous focus on addressable market
space
– Vetted by experienced business people prior
to release
– Initial investment dollars by founders &
business leaders committed prior to VC
commitment
Cantilever Background &
Timeline
• VC committed in 1998
– Founders resign positions to eliminate any
conflict issues
– Business plan re-written
• Company Started in 1999
– Located in Purdue Research Park
• Company sold in 2005
What does Cantilever do?
Cantilever Readiness Engine®
Patent Pending Software
Tool that Speeds Up
Business Decision Making
and Problem
Solving.Complimentary
Single Bolt-On to
Existing Systems.
Sales Manager
Sales Rep.
Complex
Problem
Marketing
ROI: in as little as 90 Days
Contracts
Customer
Shipping
AR Analyst
Cantilever Readiness Engine®
Software Tool
that Speeds Up Business
Decision Making and
Problem Solving.
Sales Manager
Sales Rep.
Complex
Problem
Marketing
ROI: in as little as 90 days
Contracts
Customer
Shipping
AR Analyst
Proven Results with
Fortune 300
“The Readiness Engine [solves]
problems never before solved with
software.”
John Crowther, Former CIO Cummins Inc.
Competitive Landscape
Unanticipated
e-Room
Instant
Messaging
Lotus Notes
Anticipated
Business
Process Workflow
e-mail
Readiness Engine
Portals
Business
Intelligence
CRM
Corticon
Lombardi Software
MySAP
PLCM
PDM
Report
Generators
ERP
Structured
Flexible
Collaboration
Key Focus Areas
•Locate Office Space
•Incubators are key
•Define Cash tracking and financial reporting
•Hire Key employees
•Build Scaleable Infrastructure
•Build product
•Revenue generating customers
•Implementation methodology-Repeatable revenue model
•Prove ROI
•System use expanding/Sell One sell many
•Break even
VC Expectations
• Phase I
– Tight financial controls – monitor cash
– Build product
– Sales reporting
– Revenue/Revenue/Revenue
– Weekly/monthly meetings
• Phase II
– Repeatable sales model
– Sell one – sell many
– Market focus & migration
Representative Case Study
3500
3000
Pricing Methodology:
- Expanding License
Fees
- Professional Fees
Per Project
2500
2000
Revenues
In
$,000 1500
1000
500
0
Pilot
2000 2001 2002 2003 2004
How Will You Grow the Business
…Market Focus & Migration
Early Adopters
Warranty
Aftermarket
New Product
Introduction
Engineering &
Obsolescence
Accounts Receivable
Sales Force Performance
Management
Accounts Payable
Recurring Failures
WIP and Finished Goods
Inventory Minimization
Discrete
Manufacturing
Industry
Verticals
Proven “Off the
Shelf” Solutions
Aero Space
Expanded
Applications
Automotive
If You Need More Money
• Good news:
– Sales and growth are exceeding expectations
• Bad news:
– Estimates low
• Product development longer
• Sales slower
• Communicate early & often – no surprises
• Your relationship with the VC & the Board is key
• Warning – Some VCs operate on the “One Miss
You Are Out” model
Exit Strategy
• Exiting is hard work
– VC may drive timing of exit
– Due diligence is really tough
– Going public with SOX is a new game