ENTREPRENEURSHIP II
Babs Bailey Carryer
Spring 2002
Goals of course
• To create, for all intents and purposes, a
viable new business
• To understand steps necessary in the
creation of a new venture
• To be able to tell the story of this new
venture in a dynamic and compelling
way
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Innovation
• New product
• New technology
• New integration
• New market
• New industry
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Innovation continued
• Not necessarily “new”
• Must be unique
• Must have a market
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Effective innovations start small. They are
not grandiose. They try to do one specific
thing. It may be the elementary idea of
putting the same number of matches in a
matchbox. This simple notion gave the
Swedes a world monopoly on matches for
half a century.
Peter Drucker
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We succeeded (in the Normandy
Invasion) because we didn’t know it
was impossible.
Winston Churchill
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Market opportunity
• Problem
• Pain
• Solution
• Big markets
• Growing markets
• Accessible markets
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Growing the company
• From inception to exit
• The steps necessary
• Experience first hand, not from a book
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Dividing the pie
• Founders
• Investors
• Change over time
• Dilution
• Wealth creation for shareholders
• Different rights with different types of
stock
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Legal entity
• C corp
• S corp
• LLC
• Partnership
• Sole proprietorship
• Other
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Funding
• Self
• Friends and family
• Angels and private investors
• Vcs
• Institutions
• Other: industry partnerships,
customers, etc.
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Hiring management
• CEO, marketing and sales, finance,
technical, support
• Where do you find good candidates?
• What do you give them?
• How do you keep them?
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Creating a board of directors
• What is a board?
• What do they do and how often?
• Finding and recruiting candidates
• Compensation
• Ongoing governance
• Staying out of trouble
• D&O insurance
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Advisors and mentors
• Why have them
• Formal or informal
• Compensation and expectations
• Filling in the gaps of your knowledge
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Market research
• Secondary research
• Primary research
• Comparables
• Finding the market opportunity
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Market analysis
• Segment
• Target
• Position
• Creating a marketing strategy that
positions the company for success
• Entry, dominance, sustainability
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Financial analysis
• Income statements
• Cash flow
• Balance sheet
• Pro formas
• Expenses
• Revenue streams
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Creating a business plan
• Internal and external uses
• Clear articulation of story
• Blueprint for moving forward
• Focusing on what’s important
• Concept, strategy, execution
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Resources
• Bootstrapping resources to marshal and
minimize resource utilization
• Other people’s money (opm)
• Head skis and money up front
• Networking and network effects
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