This report has been prepared by A5. Unless specically indicated otherwise, this report is under copyright to A5.

None of the its content may be altered in any way, copied, transmitted or distributed to any other party, without the prior express written permission of A5. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to any partys individual circumstances, or otherwise constitutes a personal recommendation. A5 accepts no liability for loss arising from the use of the material presented in this report. This report is not to be relied upon in substitution for the exercise of independent judgment. Information, opinion and estimates contained herein reect our judgment at the date of publication and are subject to change without notice. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information and opinions presented in this report have been obtained or derived from sources believed by A5 to be reliable, but A5 makes no representation as to their accuracy or completeness. A5 may have issued, and may in the future issue, other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. Those reports reect the different assumptions, views and analytical methods of the analysts who prepared them and A5 is under no obligation to ensure that such other reports are brought to the attention of any recipient of this report.

Elements of Sustainable Companies

Start-ups with these characteristics have the best chance of becoming enduring companies. We like to partner with startups that have:
Clarity of Purpose Summarize the company's business on the back of a business card. Large Markets Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop. Rich Customers Target customers who will move fast and pay a premium for a unique offering. Focus Customers will only buy a simple product with a singular value proposition. Painkillers Pick the one thing that is of burning importance to the customer then delight them with a compelling solution. Think Differently Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition. Team DNA A companys DNA is set in the rst 90 days. All team members are the smartest or most clever in their domain. "A" level founders attract an "A" level team. Agility Stealth and speed will usually help beat-out large companies. Frugality Focus spending on what's critical. Spend only on the priorities and maximize protability Inferno Start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little repower.

Business Plan
We like business plans that present a lot of information in as few words as possible. The following business plan format, within 15-20 slides, is all that's needed:
Company Purpose

! ! ! ! ! ! ! ! ! ! ! ! ! !

Business Model

Dene the company/business in a single declarative sentence.

! !
! ! !

Problem Describe the pain of the customer (or the customers customer). Outline how the customer addresses the issue today.

Revenue model Pricing Average account size and/or lifetime value Sales & distribution model Customer/pipeline list

Solution Demonstrate your companys value proposition to make the customers life better. Show where your product physically sits. Provide use cases. Team

! !
Financials

Founders & Management Board of Directors/Board of Advisors

Why Now Set-up the historical evolution of your category. Dene recent trends that make your solution possible.

Market Size Identify/prole the customer you cater to. Calculate the TAM (top down), SAM (bottoms up) and SOM.

! ! ! ! !

P&L Balance sheet Cash ow Cap table The deal

Competition List competitors List competitive advantages

Product Product line-up (form factor, functionality, features, architecture, intellectual property). Development roadmap.

Problem
! !
Describe the pain of the customer (or the customers customer). Outline how the customer addresses the issue today.

Solution
! ! !
Demonstrate your companys value proposition to make the customers life better. Show where your product physically sits. Provide use cases.

Why Now
! !
Set-up the historical evolution of your category. Dene recent trends that make your solution possible.

Market Size
! !
Identify/prole the customer you cater to. X Calculate the TAM (top down), SAM (bottoms up) and SOM.

Competition
! !
List competitors List competitive advantages

Product
1.! 2.! Product line-up (form factor, functionality, features, architecture, intellectual property). Development roadmap.

Business Model
! !
! ! !
Revenue model Pricing Average account size and/or lifetime value X Sales & distribution model X Customer/pipeline list X

Team
1.! 2.!

Founders & Management Board of Directors/Board of Advisors

Financials
! ! ! ! !
P&L Balance sheet Cash ow Cap table The deal