CPIA Quarterly Meeting
Our next quarterly meeting will be held on Thursday, August 26, 2010, 3:00 PM - 6:00 PM
At this meeting we will continue the topic "Financing Challenges and Strategies" with a terrific nationally-recognized speaker, Milton Chang, Managing Director, Incubic Venture Fund. Milton will speak on "Lowering the Risk of a Photonics Startup."
Meeting location:
2555 55th St, Suite 100
Boulder, CO 80301
CPIA Members – Free
All others $10
or go to www.blacktie-colorado.com and enter code CPIA826 (All one word, not case sensitive)
Agenda:
3:00 Networking & refreshments
3:30 Introductions & CPIA business
4:00 Featured Speaker: Milton Chang, Managing Director, Incubic Venture Fund, "Lowering the Risk of a Photonics Startup"
5:00 Overview and tour of ASD
6:00 Adjourn
Lowering The Risk of a Photonics Startup
Entrepreneurs starting businesses want to succeed but rarely pay attention to the definition of entrepreneurship, which is to create value efficiently.
In the startup phase, core value is created efficiently with founders doing what they do best. On the other hand, value creation is often very inefficient in the build-out phase, at least by comparison to what could be done within an established company as an add-on business. Therefore, doing what well-funded startup companies typically do, which is to build out the entire company quickly to generate significant revenue, is intrinsically inefficient and risky, as we all know.
The way to lower risk is to first build what might be called a prototype business before deciding to make the significant investment to build out the business. And work towards an early acquisition, to avoid making the investment in scaling the business if it can be built out more efficiently in an established company, using existing infrastructure. Depending on the nature of the business, the prototype business could be anywhere along the path to creating core value. In most cases, that could mean getting meaningful market feedback with a prototype, or on the other hand getting a few small but serious orders before deciding to "go for it" to scale the business. These activities can often be achieved by a small team with only limited outside investment, and the business will be capital efficient.
The bottom line takeaway of this talk is to always get the right amount of capital at the right time, from the right investors. The prototype business model pays attention to capital efficiency, validating as much of the business as possible before scaling the business. Within an industry group like CPIA, together we can create a more vibrant ecosystem for the photonics industry where established companies work collaboratively with embryonic startups to create value efficiently.
------------------------
Milton Chang was president/CEO of Newport and New Focus. He is currently managing director of Incubic Management and sits on the Boards of Precision Photonics Corp. and mBio Diagnostics. He is semi active in his investment activities while writing a book to share his business experience. Milton grew up in Hong Kong, worked his way through college, earned a B.S. in EE with highest honors from the University of Illinois, and M.S. and Ph.D. in EE from the California Institute of Technology, and he was awarded Distinguished Alumni by both universities. He is a Trustee of Caltech, a member of the Board of Visitors of U of I College of Engineering, a member of Committee of 100, and writes monthly business columns for Laser Focus World and occasionally for Photonics Spectra.
