Crystal Internet Ventures

Confidential
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Crystal Internet Ventures
Confidential
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Crystal Internet Ventures
Business Plans
Financial Projections

Agenda
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Focused on Early Stage Investments
Diversified across spectrum of Internet-related companies:
Communications
Hardware
Software
Vertical Applications and Content
Invested in 27 companies in US and Asia
6 are publicly traded as of 3Q 2000
4 IPOs
2 Public acquisitions
2 Companies in Registration

Crystal Internet Ventures

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Management Team
Partners
Joseph Tzeng Daniel Kellogg
Howard Lee Brian Goncher
Principals
R Khosla John Hsin
Chief Financial Officer
Richard Kovach
Controller
Cameron Rubino
Associates
Sunny Lin
Ben Shih
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Team of 8 professionals and 4 support staff
Over 80 years of combined start-up experience
Worked with over 300 venture backed high-tech startups
over the past 20 years
Global expertise in the following areas:
Technology
Business development
Product Marketing
Corporate finance

Broad Business Experience
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Mission
Back experienced, high-quality entrepreneurs who are at the early stages of
creating Internet-related businesses that address large and rapidly growing
technology markets.

Strategy
Water Source technology
Founders with the Right Stuff
Dominate markets we invest in
Investment Strategy
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Example: LightSpeed Software

Sold Portfolio company to LightSpeed
Re-capitalized company and re-invested
Developed operating and strategic plan for the company
Recruiting Sales and Marketing team
Developing high-caliber advisory board
Focused on Profitability

Case 1
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Case 2
Example: Cobalt Networks

Mid Expansion Investor in the Company
Assisted in sourcing an international manufacturer that allowed
Cobalt to scale product development
Introduced Cobalt to Asian distribution agents that allowed the
company to enter market quickly
Cobalt went public in November 1999 and was acquired by Sun
Microsystems for $2B

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Crystal has Co-Led or Syndicated Investments with:

Accel Partners Citigroup Microsoft
Alliance Technology Ventures CMGi@Ventures Mitsubishi
Alpha Capital Comdisco Ventures Mitsui
APV Technology Partners Crescendo Ventures NTT
ARCH Ventures Doll Capital Management Red Rock Ventures
AT&T Draper Fischer Jurvetson Softbank
August Capital El Dorado Ventures Tech Fund Capital
BancBoston Ventures France Telecom TIA CREFF
Battery Ventures Goldman Sachs Vertex Partners
Bessemer Ventures IDG Ventures Walden Investment Group
Boston Millennia Partners Intel Corporation Working Ventures Canada
Cambridge Technology Group Key Principal Partners XL Capital
Chase Venture Capital LMVH Zero Stage Capital



Crystal Funding Partners
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Corporations:
Lite-On Group Teco Group UMC
FIC Hong Kong Telecom Pacific Group
Yager Group China Times Group Yulon Group

Financial Institutions:
UOB Bank China Development GIC
Industrial Bank of Taiwan Fubon Group Vertex

Government Agencies:
Economic Development Board of Singapore NSTB of Singapore

Individuals:
Many individuals that include Managing Directors of a Big Five accounting firm, a top-tier
US Investment bank and a leading international venture capital fund.


Crystal Limited Partners
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www.crystalventurecapital.com
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www.crystalventurecapital.com
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Three uses of business plans
Planning
Recruiting
Fund-raising
Focus on the Executive Summary
Carefully control its distribution
Continually update the plan

Business Plans
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Include all the important elements of the full plan
Market
Product
Management
Operations
Financials
Draft the Executive Summary first
Write the full plan
Go back and revise the Executive Summary
Executive Summary
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Work from an outline
Make it complete but concise
Write it yourself
Test it first
Use charts and graphs to make it more interesting
Do not use a paint by number template
Business Plan
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Executive Summary (3-5 pages)
Business Overview and Strategy (1-2 pages)
Technology and Product (3-5 pages)
Market and Competition (3-5 pages)
Management (3-5 pages)
Operations (3-5 pages)
Financial Summary (2-3 pages)
Summary of projections
Use of Proceeds
Exit Strategy

Business Plan Outline
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Full management resumes
Annual financial projections
Product information
Market studies
Appendices
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Work on the financial model as part of the plan
Do not provide more detail than explained in the full plan
Use sensitivity analyses, but include only the expected
case
Explain the assumptions throughout the plan, including the
financial summary at the end
Get help if you are clueless
Check for mistakes and reasonableness

Financial Projections
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Build a specific revenue model that mirrors your industry
Compare with industry standards, highlight differences
Make the model bottoms up
Know the presentation conventions for revenue, cost of
sales and expenses
Do not overestimate first year revenues
Do make a five year sales forecast
Revenue Model
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80% of all early expenses are headcount related
Make sure you are reasonable with salaries
Match additions of people with company milestones
Dont forget overhead and recruitment expenses
Build a sales commission model, if appropriate
Index to inflation and add bonuses
Headcount
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Dont sweat the other 20% of non-headcount expenses
Make sure rent comes in as needed
Watch consulting and professional services
Begin taxes at the appropriate time
Other Expenses
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Do create a balance sheet
Make industry standard assumptions
Use the balance sheet for financing assumptions
Make sure it balances
Balance Sheet
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A Flow of Funds statement is easiest
Use the Receipts and Disbursements table if you are brave
Cash flow statements are derived from the income
statement and balance sheet
Show monthly or quarterly statements in the appendix until
break-even
Cash Flow
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In the full business plan use charts or tables to highlight:
Revenue from your company compared to competitors
Sales model
Five year annual summary
In the appendix, use charts and graphs to highlight key
metrics such as cash flow cycle, break-even or funding
events
Charts and Tables
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Build a believable business plan
Use the Executive Summary to market your company
Make the financial projections conform to the text of the
business plan
Have someone check the reasonableness of assumptions
Practice your pitch
Revise you plan
Good luck
Summary