LiveWorld Transcripts

Talk City presents

Cisco's VP of Business Development, Ammar Hanafi
Business Plans and the VC World

March 14, 2001

Have questions about the VC community? Read our chat with Ammar Hanafi, Cisco Systems' VP of Business Development. His VC and Cisco experience makes him a great resource for you to tap. Hanafi answers questions on subjects ranging from the basics of business plans and what you should look for when talking to VCs, to broader topics, such as current funding trends.

Page 1 of 5

Cisco: Welcome to the Cisco SmartStart Online Auditoriums. Today, Ammar Hanafi will answer your questions on Business Plans and the VC World.

Ammar Hanafi: Thank you very much for participating in this Cisco sponsored event. My name is Ammar Hanafi. I run the Business Development group at Cisco Systems. We are the group that is responsible for all acquisitions and investments for Cisco, and we look forward to talking with you about the investing process and the marketing environment, today, which is, as we all know, extremely challenging.

Mario: What type of start up companies are VC firms funding in today's market?

Ammar Hanafi: I think the venture capital community today is very careful about where it is putting its money. Some of the sectors they are investing in today are storage components and specialized software companies. The market environment is not one where any and every startup is getting funded. The venture community is very focused on cleaning up its existing portfolio of investments at this time.

Investor: As a start up preparing a business plan to present to VC firms, what top three key elements are essential to a successful business plan?

Ammar Hanafi: I think in today's market environment, three or four things that the venture community is very interested in are customers and revenue, to a capital funding plan that is achievable in this environment. Third would be deep expertise in the market--and that is being addressed--and the fourth thing would be exceptional technology expertise. Venture capitalists are funding technology-oriented companies, as well, so they need a deep technology expertise.

Bus Internet: How do I get Cisco to look at my business plan?

Ammar Hanafi: Cisco is focused on investing in certain technologies and markets. That means that we do not look at each and every business plan that is coming to the venture capital community. Therefore, the first thing to make a business plan interesting for Cisco is that it has to be in a business that is relevant to us today. We are very interested in the following key markets for our company - Optical networking, Wireless infrastructure, Content networking, Storage, and Security. Those markets are where business plans are of interest to us. We are very interested in teams that have strong technology expertise, and background in these markets. Cisco does invest in some new markets to create demand and new applications for the Internet, and we do sometimes look at those markets, as well. Those are the two key issues, and we are always interested in working with start-ups as they develop their plans. We find it helps a lot if people work with other experienced venture capitalists in the VC community. The best way to approach Cisco is to directly contact someone on the sales team--follow up with them that way--and have the sales team follow up with the business development group if it is something we should look at through the SmartStart program.

Tom Marquez: What advice do you have for a company trying to get funded in today's economy?

Ammar Hanafi: My first piece of advice would be to have a realistic expectation of valuation. The market today is very different from what it was 12 or 24 months ago. The second would be to have a business plan that is very much focused on profitability. Thirdly would be to develop deep technology expertise.

Page 1 of 5