Ten Lessons from the

Pinnacle Experience

Ajay Chopra
Trinity Ventures
3000 Sand Hill Road
Menlo Park CA 94025
www.trinityventures.com
A brief history of Pinnacle
Systems
 Founded 1986; Series A
 Media authoring and delivery tools
 FCS 1987; Series B
 1989 Series C
 Failed IPO 1992
 IPO 1994; Secondary offerings 1995/96
 Acquired 20+ entities 1996-2003
 Sold to Avid Technology in 2005
 $462M cash and stock
Lesson #1:
Building a Company is a
marathon
 Average run to IPO: 7 years
 Plan to enjoy the “journey” not the
“destination”
 Success in determined by execution focus,
team and value system
Lesson #2:
“What’s the heading, Captain?”

 Always know the heading

 Execution starts with leadership!
 Focus on leading; hire to manage
Lesson #3:
Everybody’s money is not equally
green
 Findthe right investor match
 Make sure goals are aligned
Lesson #4:
Cut your losses!

 Do not throw good money after bad

 Nothing wrong with being frugal!
 Define unbiased metrics for success and
failure
 Good enough is usually not!
Lesson #5:
Do not let the competition control
your profitability
 Continue to define your “blue ocean”
 But do not underestimate your competition
Lesson #6:
Technologies can take
discontinuous steps but markets
evolve slowly
 Develop to technology evolution
 Plan to market evolution
Lesson #7:
When the market reaches the
inflection point, BE READY!
 More start-ups get upstaged by new
competition at the market inflection point
than anywhere else
 Keeping tabs on the “convergence” factors
Lesson #8:
The soul of the company is its
value system
 Intellectualhonesty
 Leading by example
 Fairness
 Culture of excellence
Lesson #9:
You are known by the company
you keep
 Investors/Bankers
 Board members
 Auditors/Lawyers
 Customers
Lesson #10:
Do not take yourself too
seriously!
 Remember to make the experience fun
 Find fulfillment in the journey
 Keep things simple
 Choose your battles
 Bonus slides!

Matching with the right Venture

Fund
Is your space an area of interest
for the VC?
 Does the VC have expertise in the
space your company is focused
 VCs are well connected – will find an
expert – including another VC
Fund investment preferences
 Geographical
 Deal stage
 Min-max investment profile
 Percentage ownership requirements
Fund investment cycle
 When was the last fund raised?
 How many investments have been
made?
 How much “dry powder” is left?
Portfolio conflict?
 Is this portfolio company an active
investment?
 Was it (or is it) a good investment?
 Too much concentration – portfolio
diversity?
 Direct competitor?
Are you in fact ready for VC
money?

 Only one shot with most VCs

 Crisp story in 40 minutes – 15 slides
 Team, Technology and TAM
 Unfair advantage
And a final quote…..
 Entrepreneurship is “converting
creativity and mental energy into
wealth”
- Narayana Murthy