Opportunity Recognition and Idea Evaluation Empowering Imagination Applying Knowledge Exploring Innovation Tomorrow Seizing Opportunities Accelerating Business Inspiring T Innovations Empowering Imagination Applying Knowledge Explore Seizing Opportunities Accelerating Business Inspiring TEomorrow mpowering Imagination Applying Knowledge Exploring Innovations Tomorrow Seizing Opportunities Accelerating Business Inspiring Opportunity Recognition Discuss: What is the difference between an opportunity and an idea? Opportunity Recognition Driving Forces of Value Creation: Opportunity driven Entrepreneur and team Fit and balance Integrated and holistic Opportunity Recognition Opportunity Driven: What makes a good opportunity? Opportunity driven Entrepreneur and team Fit and balance Integrated and holistic Opportunity Recognition Opportunity Evaluations: Market size and growth potential Technology Personnel and team Product value/characteristics Internal challenges Level of innovation and creativity Opportunity Recognition Maximize Potential with Limited Resources Clear, concise description of the business Unique features and proprietary rights Overview of market potential Strong team Financial potential Opportunity Recognition The Product/Service Plan Bootstrapping (Barter, borrow, beg) Minimize and control resources versus owning resources, such as equipment, buildings, other… Thinking money first can be a mistake. Opportunity Recognition Fit and Balance: Balancing Opportunity, and Resources to create a successful venture. Opportunity Recognition Resources Opportunity Business Plan Opportunity Recognition Opportunity Market Demand Market Structure & Size Margin Analysis Opportunity Recognition Minimize & Control Resources vs. Maximize & Own Financial People Opportunity Recognition Evaluating Venture Opportunities Industry and Market Criteria: Customers Attainable Share Growth rate User benefits Product life Cost structure Capacity Value added Structure Size Opportunity Recognition Evaluating Venture Opportunities Economics and Harvest Issues Criteria: Time to BE Capital market ROI potential Capital requirements Exit strategy Value-added potential Cash flow characteristics BE = Break Even ROI = Return on Investment Opportunity Recognition Evaluating Venture Opportunities Competitive Advantages Criteria: Fixed/variable costs Response/lead time Control over costs Legal advantage Proprietary protection Contracts/networks Opportunity Recognition Evaluating Venture Opportunities Management Team Criteria: Entrepreneurial Team Industry and technical experience Integrity Intellectual honesty Opportunity Recognitions Evaluating Venture Opportunities Personal Criteria Goals and fit Upside/downside issues Opportunity costs Desirability Risk/reward tolerance Stress tolerance Opportunity Recognition Venture Opportunities 1. They create or add significant value to a customer or end user. 2. They do so by solving a significant problem, or meeting a significant want or need, for which someone is willing to pay a premium. Opportunity Recognition 3. They have a robust market, margin, and moneymaking characteristics: large with high growth; high margins; early free cash flow; and attractive returns to investors. 4. They are a good fit with the founders and management team.