TECHBA WHITE

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TECHBA WHITE LEE The ABCs of FAQs.on
Business in El Norte!

• Mark Cameron White mwhite_at_whiteandlee.com
• White Lee LLP
• July, 2006

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ONE EL NORTEYOURE NOT IN KANSAS ANYMORE

• Thats Good.
• Big market.growing Hispanic market
• Global reach though US partners
• Too much moneynot enough good companies
• Now is the time for Mexico
• Opening of the Mexican economy
• The Israeli modelnot China or India
• US attention

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• And Bad.
• Lots of competitionmeritocracy
• You MUST be aggressive
• Market driven, not technology driven
• Mexico is a resourcebut the value must be in the
  US
• Need low customer acquisition costand MUST be
  able to scale
• This is no place for a family or life-style
  business

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• So.Make the Best of It
• You can talk to anyone
• Network all the time
• Lean from othersmake the better mousetrap

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TWO THE NUTS AND BOLTS OF SETTING UP SHOP..

• Why Form a Corporation?
• California or Delaware
• Who Owns What.the Capitalization
• Seed Capital.Stock and Revolving Notes
• What about the Technology

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• Direct Ownership.or Parent Sub
• How to Protect the Owners Vesting/Acceleration/Se
  verance?
• Succession IssuesVesting or Buy-Sell
• Tax Issueson Customer Sales

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THREE OTHER PEOPLES MONEY.

• When to Use Other Peoples Money
• Where to Find Itthe Types of Investors
• Whats the Story?...ie. What to Say About the
  Company
• How to Say Itand Getting the Word Out
• Whats the Processand Timeline
• Whats the Price?!

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• Things to Consider
• Debt, bridge and equity
• Amount needed and whento build value
• Control issuesare you ready for this?
• Do you really NEED the Money.or Is There Another
  Way?!

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• What NOT to Do
• Take too much money from the Wrong People
• Money and Advicethe SpongeCell example
• Go Out too Early

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FOUR BUILT TO LASTDOING BUSINESS HERE

• How to Find, Hire and Terminate Employees
• Launching Sales in the US
• Direct
• Indirect
• Critical issues in Partnering
• Tax Issues
• Relationship with the Mexican Operation

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FIVE LIQUIDITYTHE END GAME

• IPO vs. AcquisitionWhats Realistic
• Good Companies are BoughtNot Sold
• TimingIt Depends

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• Critical Issues
• Price
• Structure
• Ongoing Liability
• Non-compete
• Allocation of Proceeds
• If Stock.Get Tradable Stock
• Indemnity and Escrows..

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Questions?