The Propellant Group Manifesto

An Accelerant for High Potential Organizations

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What We Do We are an accelerant for high potential organizations. The Propellant Group helps organizations grow by providing a unique blend of strategic advice and operational direction at critical times in an organization’s lifecycle. Clients hire The Propellant Group (Propellant) because we are senior executives who have experience in starting, growing and running organizations – thus we are able to make critical improvements within an accelerated timeframe. While the emphasis of Propellant’s experience has been in technology – Internet, consumer software and enterprise software – we also have significant experience in advertising, financial services, professional services and clean technology. We focus on organizations that need to transition to the next stage in their development cycle. We help organizations with three important transitions:

The transition from idea to start-up

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Challenge: make the Founder’s vision a reality in 3-6 months

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TPG can augment the management team as required

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Build a beta, recruit management team, put together a business and go-to-market plan, help secure financing

The transition to early stage scaling

The transition from start-up to significant growth

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Challenge: help organization realize its potential/solve problems inhibiting growth

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Challenge: help organization build repeatable successful outcomes into process

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TPG usually provides three things: 1. Assessment 2. Action/Operating Plan 3. Roadmap to Financing

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TPG helps companies put the infrastructure in place: 1. People 2. Process 3. Controls

Why are transitions important? Because it’s during these transitions that organizations are both the most vulnerable and the most able to capitalize on success. Along with increased investment comes increased risk. Moreover, it’s when an organization starts to “produce” more that the bottlenecks are more likely to cause serious problems. On the other hand, when an organization decides to take the next step, they are more willing to try things that will make a fundamental difference versus an incremental improvement. Because these transitions are both difficult to manage and incredibly important, organizations often need help in managing this change. That’s where The Propellant Group comes in. www.propellantgroup.com | [email protected] | 626.689.4791

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Phase 1 Transitions: From Idea to Start-up We build companies for Founders, Boards of Directors, or Angel Investors by taking their vision from idea to reality. One of our Managing Partners leads the effort to build the company working closely with the CEO/Founder/Board. This is an intense, concentrated commitment that lasts for an indefinite period, one tied to attaining specific milestones. These milestones typically include defining and launching the business, guiding the evolution of the business, and then recruiting a permanent management team that fits the final form of the business (which is often far different than the initial conception). We have intense startup experience. The principals of the Propellant Group have founded, been senior executives of, and been instrumental in the creation of more than two dozen businesses, including the Automotive X PRIZE, Geocities, , CitySearch, X1 Technologies, and Snap.com. We have built products from a clean sheet of paper; forged successful business strategies; built departments; re-organized companies; recruited management teams; created go-to-market strategies and programs; prepared enough financial models to fill a lake; and raised money from seed stages to IPO. We have formed the Propellant to apply this collective knowledge to make our partners grow faster and become more profitable. Phase 2 Transitions: From Start-up to Significant Growth Going from start-up to significant growth may be as difficult as starting the company in the first place. We’ve worked with many companies that have the potential to succeed, but for a wide range of reasons, haven’t quite arrived yet. Usually, they need at least three things: 1. Help in focusing on the important initiatives that can be game changers. They need help in understanding the one or two things that must be accomplished in order to get to the next level. We call it the “it’s the economy stupid” strategic clarity. 2. Single-minded ruthlessness in getting operations working efficiently and together. Companies grow up in a way that allows them to survive, not necessarily to thrive. Products, organizations, people, financial systems all need to be made to work optimally to grow. And sometimes, the objectivity of a third party can provide stimuli for action. 3. Access to more capital to fuel their growth. All early stage companies need capital to grow. Most of our clients are not throwing off enough cash flow to fund their growth internally. Hence, they need help in the incredibly important process of finding the right amount of capital, at the right price, from the right investors.

www.propellantgroup.com | [email protected] | 626.689.4791

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Propellant helps accelerate a company’s growth by providing both strategic insight and operational help in basic business strategy, product development, marketing, sales, finance, etc. Most often, this help takes the form of a deep-dive analysis of a client’s business followed by a very specific action plan. But here’s where Propellant is different from most consulting companies – we then often sign-up to help execute the action plan because our Partners have hands-on operational experience in a wide variety of disciplines.

“We only take on assignments in which we can make a significant impact by outlining the right business strategy and then playing an integral role in its execution. In this way, we serve both as an objective outside advisor as well as operating executive held accountable for our performance.”

Phase 3 Transitions: Early Stage Scaling Successful entrepreneurial companies soon face this question: how do we build repeatable successful outcomes into our organization as we get bigger? The answer is people, processes and controls. We know that not all executives are right for all companies, at all of their stages. This may be as true for a Founder as it is for a VP Sales. We help companies assess the type of organizational talent that is required for the next stage of development. We often get our hands very dirty in this stage, drafting organization plans, job descriptions, compensation plans and help manage the recruiting function. In some rare instances, we use our network to match the right candidate with the opportunity. Scale is not achievable without process and methodologies. It’s a sometimes ugly fact of success. This becomes critically important at certain events in a company’s life. An expansion from a headquarters-only operation to a multi-office operation for example. Or the need to integrate an acquired team/technology/division/ company. And perhaps the most challenging – a company-wide coherent and rational compensation plan that can work across all of the company’s groups and departments. At some stage, you have to be willing to let go of QuickBooks… Without the proper financial controls and the corresponding metrics dashboard in place, it’s impossible to scale a company in a financially sound manner. Everything from the proper cash controls to the right way of capturing costs/revenues needs to be addressed and solved. We’re not an accounting firm, but we can help guide you in evaluating the myriad vendors/partners/tools available to assist your company in getting an accurate, timely picture of its financial situation and the ability to control its financial levers.

www.propellantgroup.com | [email protected] | 626.689.4791

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What Makes Us Different We are deep impact players and we immerse ourselves in each client’s business. Senior talent, immersed in your business, on-site and on-demand. Every engagement begins with a strategic assessment by all partners in the firm. We know how to start and operate organizations. TPG Partners have significant start-up experience as well as general management experience. Often, we are asked to help implement the strategies we recommend, thus making us accountable team members. We have a broad network of talented people and companies that can help. Over the years, we have developed a network of trusted partners and individuals that can be very helpful in forming strategic partnerships, finding the right management talent, financing, professional services, and new business ideas. We are purposely very small. Because one of our Managing Partners will actively lead each assignment, Propellant can only work with a limited number of companies at any one time. We don’t have, nor want, an army of inexperienced MBAs. Instead, each of our principals will be involved in each assignment. To make this a reality, we limit the number of assignments to those in which we can have a major impact and share substantially in the risks and rewards. Discreet advice. Often, founders and entrepreneurs need senior level advice — that they can trust — on a range of sensitive issues. In this case, Propellant principals act as CEO Coaches, helping them think through their personal goals, exit strategies, company structure issues, organizational structure, management assessment, and core business strategies. Part of this role often includes training sessions for the senior management team on issues that are critical to taking the company to the next level. Our Clients

www.propellantgroup.com | [email protected] | 626.689.4791

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Principals Fred Walti, Co-Founder and Managing Partner [email protected] | 323.854.3332 Fred brings thirteen years of Internet entrepreneurship to The Propellant Group, having founded Full Moon Interactive, an Internet architect, and LAI, Inc., a consulting company focusing on leveraging the technology in traditional businesses. Fred built FMI from startup to $25 million in annual sales with 14 consecutive quarters of profitability. Fred also started one of the first interactive divisions of a global advertising agency in 1995. Prior to his experience in “new media,” Fred spent 15 years with global communications companies in various executive capacities. Fred ran the Apple computer account on a worldwide basis for BBDO and was GM of their San Francisco office, doubling the billings of the office and returning it to profitability in 18 months. Fred has been involved – either as a consultant, principal, employee or investor – in the startup of several companies. Most recently, he served as COO of Snap.com, a nextgeneration venture-backed search engine. Previously, Fred was a Strategic Advisor at Idealab in which he led the efforts to develop operating plans for a number of their portfolio companies. Fred served as the Interim CEO for Geocities, helping to author its first business plan, gain its first round of venture backing, and crystallizing its advertising-driven business model. Geocities went public and was later sold to Yahoo in 1999. Neal Anderson, Co-Founder and Managing Partner [email protected] | 626.808.5918 Neal has over fifteen years of experience boosting productivity, revenue and profit for both startups and existing organizations. Neal has a unique ability to distill an organization’s strategy into its simplest, most powerful, form. With a clear vision of what needs to get done, he then forms a plan of attack that almost always gets from A to Z in the most effective manner. Prior to Propellant, Neal helped to form and launch the $10 million Progressive Automotive X PRIZE. Neal also achieved an organizational turnaround as President and CEO of True Floors, Inc., by injecting three consecutive years of double-digit growth into a stagnant business, culminating in a profitable sale. Earlier, he co-founded creative agency Ideawork Studios, helping to build a profitable business and awardwinning work for key clients including Yahoo, PBS, Tenet, Ziff-Davis, and others. Neal has also consulted for several prominent organizations including Stanford University, Idealab and the City of Los Angeles, and spearheaded one of the first online marketplaces for government procurement with Visa and Chase. Neal currently sits on the Caltech / MIT Enterprise Forum Executive Committee, the Los Angeles Business Technology Center Mentoring Committee, and the board of directors of Street Poets – a non-profit aimed at violence prevention with at-risk youth. www.propellantgroup.com | [email protected] | 626.689.4791