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The Stages of an 
Entrepreneurial Venture
Netpreneur Steve Walker Shares Lessons Learned, from Start-up 
to Buy-Out

(Bethesda, MD -- August 27, 1998) More than 200 netpreneurs from around the Greater Washington Region ignored the dog days of August to learn how Steve Walker grew Trusted Information Systems, Inc. (TIS) from a one-person government R&D consultancy, into a 350-employee publicly held commercial firm that recently attracted a major buy-out.

"What makes small companies successful is that there are large companies out there that are willing to buy them," quipped Walker, who sold TIS to Network Associates last April in a deal valued at $350 million.

As the centerpiece for the August 27 "Coffee & DoughNets" – a monthly series of informal networking and educational sessions for netpreneurs – Walker described the evolution of TIS and the lessons learned, from start-up to buy-out.

As he recounted the company’s early history, he noted that sometimes success comes about through unforeseen relationships with colleagues in the industry.

For example, the company had done some research with Bill Melton and Dan Lynch for their start-up which eventually became CyberCash in 1994. Walker didn't think much about it, but because TIS helped them in the beginning, they were given 2 percent founder's stock. When CyberCash went public in 1996, Walker’s 100,000 shares were worth $1.57 million, allowing TIS the collateral for a 50 cent on the dollar loan to go public.

Other successes were more deliberate, such as those that stemmed from Walker’s real concern for people. "The most important thing you can do is to take care of your people," advised Walker, who encouraged netpreneurs to "build an atmosphere where the receptionist feels as important as any of the vice presidents."

Walker also urged netpreneurs to find people they can trust and put together a Board of Directors that includes members from outside their company. Late in the game, TIS brought on Gary Pocca, Chief Technology Officer of Platinum Technologies, and Chuck Stein, then President and CEO of Netrix, but for too long he had had an internal board .

"An outside board can get you entry into other circles that you wouldn't," explained Walker. "We missed the boat in meeting with the investor analysts early. We missed the boat in taking advantage of what an outside board can do for you."

These and other lessons Walker now puts to use in his third career as founder of Steve Walker Associates (, which provides emerging companies with expert insight on starting and developing a business. His new firm also invests seed money in early stage Internet-related companies.

Steve Walker’s Advice for Emerging Companies
  1. Take care of your people.
  2. Don’t try to do it all. Focus on what you know how to do well and find others to do the things you don’t have to do.
  3. Go with your gut. When you get a feeling that something is not quite right, pay attention to it. Don’t become paralyzed; act!
  4. Learn from your mistakes. Mistakes are opportunities.
  5. Get to know investor analysts early – before going public. Learn how to manage the analysts’ expectations.
  6. Get the best advice you can as early as possible.
  7. Do something right now about intellectual property. When you’re a small company dealing with a largeone, you’re going to miss an opportunity if you don’t have the necessary patents.



Copyright 1998 Morino Institute. All rights reserved. Edited for length and clarity.  



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