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Building the Starting Team and Setting the Culture
Steve Morris - CEO, Teseda

Teseda is a rapidly scaling automated test equipment company that was funded by two prominent venture funds in its Series A round, and it has added two additional funds with the recent completion of its Series B round. Further, Teseda has been an operating company during and after the technology bubble. With this background, Steve profiled the ideal team that a company should have, to be attractive for a first round of investment; more specifically, he discussed the minimum requirements a team needs to be considered a viable company.

In addition, Steve profiled the team at different stages in the Company’s development. Here are some topics that were covered:

· Interim CEOs or any CEO for early stage companies

· VCs’ role as the interim team

· First Board of Directors or advisors before the new money comes in

· Need for management teams prior to product launch

· Room now for “operationally-oriented” CEO vs. the “marketing-oriented” CEO; when either profile executive makes sense for the Company.

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Managing by Consensus - When All founders have an Equal Say
Rob Nail - CEO, Velocity11

Rob talked about Velocity11’s unusual consensus management structure. After Velocity11 spun out of Incyte, the four founders settled on a consensus structure that seemed to work early on. With the Company growth, the structure is now showing strain. Rob discussed the investment community’s reaction to this structure and why Velocity11 seems to have attracted investor interest without requirements for immediate management change.

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Protecting the Company Against the Unfair Executive Termination
Joe Kouri - Partner, Bononi & Kouri

Joe addressed a couple of key issues that Boards should consider when making changes in the executive team:

· Legal definition of an “unfair” termination in light of the perspectives of juries and judges

· Acceptable definitions of termination “for cause” or “without cause” for the Boards and executives

· Desirable timeline, paper trail and warnings for avoiding claims of unfair termination

· Conducting a termination properly without making the mistakes that Boards typically make

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Panel Discussion 2: Corporate Ethics, Accounting and Governance in the Age of Enron

A Venture Director's Exposure and Protection from Corporate Mismanagement and Inaccurate Reporting
David Chen - Partner, OVP Venture Partners

David provided a practical guide of what directors should and should not do to be effective on the Board and avoid personal liability. David also discussed the rules directors of private companies should now follow in light of the Sarbanes-Oxley Act.

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Corporate Governance and Best Practices - What the Sarbanes-Oxley Act Really Means for Management
Patrick Schultheis - Partner, Wilson Sonsini Goodrich & Rosati

Patrick reviewed the Sarbanes-Oxley Act and distinguished between the rules to follow for early stage, mid-stage and later stage companies. Among the questions he explored are as follows:

· Should management be more vigilant as the company matures, or do the rules remain the same for all companies?

· What practical steps should directors take on inside round financings and low-priced acquisitions?

· When are the directors truly conflicted…and what if exclusion from voting prevents approval of a critical company financing, partnering or liquidity event?

· Can officers and directors vote differently as Board members or shareholders…and when?

· What are the costs of compliance…and when is a company being paranoid and going too far?

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A Venture Guy's Take an What Gives and What Doesn't - Management Reporting
Robert Winter - Partner, Rocket Ventures

Robert addressed what constitutes good and bad reporting by management to the Board. Robert’s topics included: (i) what management should absolutely report, and what is more operational and not necessary, (ii) how should management prep the Board for bad news, and when is it too soon to give it, (iii) specific examples of the form of reports, charts, and tables that Robert likes to see on sales and the sales pipeline, financial reports and comparisons, and operational reports, and (iv) how management should conduct the Board meeting, time management, who reports and how much detail to give.

More specifically, Robert discussed when management should push back to keep the directors out of running the Company and what management should do when directors want to know about what the lawyers are advising. Furthermore, he discussed the directors’ obligations in reporting to management, providing guidance and getting involved.

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Board Dynamics in the Current Market
Debi Coleman - Managing Partner, SmartForest Ventures

Debi addressed (i) how or if the Board is providing more oversight on management after the bubble, (ii) the time the management team devotes to Board meeting prep and how this has changed with the scale-up in Company operations, (iii) what techniques she has employed for effective Board management, (iv) examples of the types of misunderstandings that directors typically have with management – and how these can be identified and addressed before they become problems, and (v) what types of issues she doesn’t take to the Board, how she manages bad news, and when she thinks the Board is useful and when it is not. Debi also discussed how she uses directors as advisors and contributors to the Company’s business outside of the Board context.

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Panel Discussion 4: Strategic Partnering for Effective Product Deployment - Laying the Groundwork

Using IP Strategy to Block the Competition
Dennis Fernandez - Partner, Fernandez & Associates

In his presentation, Dennis explained (i) recent changes in the patent field that protect new types of inventions, such as business methodology, (ii) what constitutes a public disclosure that starts the one-year clock for submission of a patent application, (iii) the fundamental building blocks of an effective “offensive” and “defensive” patent protection strategy, (iv) what patent strategies a more mature company can employ when it has not used patents to protect its core technology, but would now like to protect its new derivative technology which might be patentable, and (v) how blocking patents work, and what is the strategy used here. In addition, Dennis also discussed practical strategies companies are now using to prosecute patent claims through contingency lawsuits, suits funded by outside investors, and other strategies.

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Documenting the Deal - What to Say and How to Say It
Scott Davidson - Partner, White & Lee LLP

Scott presented an overview of how emerging growth technology companies can identify, attract and structure corporate strategic partnerships. Specifically, Scott addressed (i) current trends in partnering for Pacific Northwest companies, (ii) strategic partnering sources: how and when to approach them, (iii) how to structure partnerships to achieve the companies objectives, (iv) key features, issues and differences between technology, creative and marketing partnerships, and (v) how to exit a partnership without burning bridges. Scott also identified (vi) the types of technology and marketing partnerships that are currently being formed, (vii) the natural evolution of successful partnerships, (viii) common misunderstandings of partners and how to pre-plan and anticipate each partner’s objectives, and (ix) dispute resolution techniques to amicably work out operational issues between partners and how these processes might be written into partnering agreements.

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Transborder Deals in Europe and Asia - Things to Know and Things to Do
Julie Wicklund - Senior Associate, Cooley Godward

Julie first identified key concerns in international deals, such as (i) tax implications of remitting license or product sale revenues back to the U.S., (ii) governing law and dispute resolution issues, (iii) IP protection, enforcement and interoperability issues, and (iv) distinct regional revenue generation or business structuring models. She will then compare these points by region (ie. Europe vs. Asian solutions generally applied). In addition, Julie provided her advice on how U.S. based companies can effectively enter new foreign markets, how to identify suitable partners in different industries, and how companies typically evolve their marketing strategies and presence in key markets over time with successful penetration.

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Panel Discussion 5: David and Goliath Talk Shop - Strategic Partnering Between Technology Developers and Distributors

The Game Plan for Net Partnering from a Small Player from the Northwest
Kevin Hoar - VP of Operations, StoreSight Systems, Inc.

StoreSight is a two-year-old, largely unfunded startup with an innovative store location and inventory identification net application that fits with webstore portals for the country’s major retailers. Kevin spoke about the remarkable progress that the Company has made in working with larger OEM partners, notwithstanding StoreSight’s size and operational limitations. Specifically Kevin identified (i) the obstacles and concerns that the Company has had to overcome in working with larger OEM partners, (ii) the Company’s strategy for identifying key partners, getting introductions and running the decision-making gauntlet of working with large organizations, and (iii) how the Company has staffed with part-time and non-paid engineers and motivated these folks to stay with the Company for over 2 years without a salary.

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Towing the Line Between Verisity and Synopsys in the EDA Space
Michael Horne - CEO, Qualis

Qualis develops an EDA verification apps platform that sits on top of and enhances the performance of underlying core verification tools developed by Verisity Design Systems and Synopsys. The problem Qualis faces is that it must work cooperatively with both Verisity and Synopsys which have competitive tools – and are seeking to distinguish their products in part by the applications developed using the Qualis solution. Given this background, Michael discussed (i) how he has positioned Qualis as the Switzerland of the verification apps world, (ii) why he has not aligned Qualis exclusively with either Verisity or Synopsys to get funding, greater market promotion or be acquired by that competitor, and (iii) whether, given the competitive dynamics in the EDA industry, Michael believes he can continue to position Qualis as neutral. Michael also addressed how (iv) he communicates with each partner given that they are direct and strong competitors, and (v) how he is discouraging each from developing their own apps toolkit which will undercut Qualis and its market potential.

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Partnering as a Cost Efficient Strategy to Penetrate Markets in Korea, Japan and Southeast Asia
Y. Stuart Nam - Founder, Principia Group

Stuart discussed the current health of markets in Korea, Japan and Southeast Asia, and how each of these markets differs and how they are the same, and how to identify and work with either technology or distribution partners in these markets. In particular, Stuart commented on (i) the normal structure of marketing and distribution partnerships in these regions, and the revenue-share, licensee models or product resale arrangements that are generally acceptable to Asian partners, (ii) the level of front-end promotional support and back-end customer support required of U.S. technology suppliers, (iii) government involvement or approvals required for these arrangements, and tax levies on funds remitted to the U.S. from Asian partners, and (iv) practical protections for U.S.-sourced intellectual property to avoid piracy and countries where infringement is a particular concern.

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