New Venture Creation
MAN 385.22 (04720) Fall 2011 Syllabus
Professor:
Rob Adams, Ph.D.
Classroom:
GSB 3.106
Time:
Tuesdays 6:30 PM – 9:30 PM
Office Hours:
Tuesdays 5:00 PM - 6:00 PM and by appointment, office is AT&T L065
Contact:
Rob.Adams@mccombs.utexas.edu, 512-633-5955
Teaching Assistant:
Michael Pierce, mrpierce@utexas.edu
Administrative:
Ann Whitt, Ann.Whitt@mccombs.utexas.edu, 512-232-6597
Course Objective: The academic goal is to develop the skills necessary for evaluating and creating a new venture,
with the ability to communicate the endeavor effectively through written and verbal presentation. At the end of
this course, you will be able to evaluate business opportunities as both an entrepreneur and an investor, within
start-ups and established companies.
The business goal is to get you comfortable building and evaluating new product and business opportunities both
as an entrepreneur and an operator within an established company. This course treats Entrepreneurship as a form
of Strategy. In today’s competitive environment, size of company does not correspond to entrepreneurship. On
the one hand, companies like General Electric, Google, Microsoft, and Southwest Airlines have kept excellent
cultures of entrepreneurship despite decades of phenomenal growth. On the other, large companies usually find
their most aggressive competitors to be start-ups. Regardless of the type of company you will work in, in the 21st
century it is critical to have experience with entrepreneurship.
My personal goal is for this to be the most valuable course of your graduate business education.
Course Description and Methodology: My goal for each student taking this class is to teach you as much about the
new venture creation process as possible. Regardless of the line of work you pursue after earning your master’s
Page 1 of 9
degree, your ability to approach a business problem using an entrepreneurial skill set will always be valuable and
differentiate you from your peers.
What frequently is the deciding factor for financing a venture, whether inside a large company, or in the private
equity markets, is the entrepreneur’s ability to articulate what the business is about, why it will succeed and
ultimately, how it will produce enough of a profit to give investors a return on their investment.
Your ability to do this has very little to do with the actual writing of the business plan. The best business plans and
presentations are the documentation of well thought-out and thorough market validation, business model
development and financial projections passionately communicated and firmly grounded in facts. By performing
these functions effectively, the writing and presenting of the business plan becomes a straight-forward, objective
process.
This class is designed to give you the hands-on experience of developing all of these skills while producing a viable
plan for a new venture. I strongly encourage you to think of this as an opportunity to develop a business plan for a
venture you will likely pursue at some point in your career.
The format of this class will cover each of the major components you need to develop a viable business and review
real business plans and presentations from previous Venture Labs Investment Competitions (formerly Moot Corp®)
using case based analysis. This will give you the theory and the practical application of the theory in a real world
environment.
This course is taught in a case format and can only be taken for a grade.
Relationship between Venture Labs Investment Competition and this Course: By completing this course, you will
be eligible to compete in the Texas Venture Labs Investment Competition Semifinals to be held in February, 2012.
This is not a requirement, but I highly recommend it for anyone who is considering entrepreneurial or private
equity pursuits.
Required Text and Cases:
If You Build It Will They Come? Three Steps to Test and Validate Any Market Opportunity, Rob Adams, Wiley, 2010.
Class website on Blackboard at http://courses.utexas.edu. This contains all materials needed for the class except
the text book. This includes electronic copies of the business plan cases, class PowerPoints and lecture notes.
Assignments should be submitted here under the Assignment tab.
Your team and market problem should be finalized before the start of this course.
Individual Class Preparation: This is a case based course, so the majority of effort will be dedicated to case review.
During each class, there will be a combination (outlined in the syllabus) of lectures, summarizing of readings,
analysis of business plans using a case analysis format, reviewing of business plan presentations and guest
speakers. Your class participation and homework will be graded for each class and this represents 50% of your
course grade.
A written evaluation of the business plan(s) that are being covered (if any) will be due via Blackboard before class
starts and no late submissions are accepted. The first case must be turned in; from there you can submit one of
every two cases, never skipping more than one write up. You are expected to prep all cases, regardless of a
write-up being submitted. Submit a two page (no title pages, just two pages of written material), double spaced
Page 2 of 9
(12 point font, one inch margins, etc.), individually prepared analysis of the case with your name on it. You need to
follow all of these guidelines to receive credit for the paper. Assume the reader is familiar with the case, so there is
no reason to repeat case facts. This summary must include a definitive investment decision from the investor’s
standpoint. Students should always be prepared to be called on randomly to provide summaries of the readings
and business plans throughout the semester.
Team Configuration: Business plans and final presentations respectively represent 25% of your grade and are done
in a team format for a combined weighting of 50%. Minimum team size is 4 students, maximum is 8, with a balance
of skills; it is important you have all major operative areas of a company covered. Sales, marketing, finance,
operations, R&D and manufacturing are the major categories that you should consider, with their weighting
dependent on the type of venture you are pursuing.
Use of Mentors: We will do our best to match you with an outside mentor that has domain knowledge in the
category of business you are pursuing. We can typically match 80% of the teams with these mentors. You will be
contacted mid-semester about the status of finding you a mentor. You are responsible for professionally managing
your communications and relationship with this mentor and your ability to do this will be part of your business
plan and presentation grade.
Grading Philosophy and the Importance of Class Participation: The grading for this class puts equal weighting,
25% each, on the written business plan and business plan presentation, which are team based efforts. This leaves
the majority of your grade, 50%, on class participation. It is not unusual for a team to have a very strong business
plan and presentation and still have a wide distribution of final grades for the individual team members.
Class participation includes your class participation, graded for each case that is reviewed, and your written
write-up of the case and will be graded for each student at each meeting and includes your ability to summarize
readings and business plans on a cold call basis. Class participation will be regularly posted on Blackboard
throughout the semester. Your personal performance will dictate your grade; you are responsible for taking the
initiative if you need more guidance on how to participate or where you stand or want clarification of your current
grade status. You are welcome to speak with me or the program coordinator at any time to get an update on your
class participation grade.
Classroom Protocol: This class is run using the protocol of a board meeting. This means full respect for people’s
input, while still challenging people in a professional manner. This also means if you have the floor, you are
concise, present new or compelling material and back your position up with facts versus opinions.
Participating in a board meeting means arriving on time, being fully engaged, no use of laptops, no cell phone
interruptions and expectation of full participation. When you are in class, I expect your full and undivided
attention.
As in a board meeting, attendance is considered mandatory in all but the most major of life or business
circumstances. With the majority of your grade coming from class participation, all classes are critical to the course
content. Class participation and case write-ups are graded separately for each class on a 0-3 point system. For class
participation, you receive a 0 if you do not participate or are unable to answer questions related to class material,
a 1 if you are present and do not participate, a 2 for moderate participation and a 3 for active, quality participation.
If you do not attend a class, you will receive a -3 for the class until the material for missing a class is turned in
which must happen before the next class meeting and is covered in the next paragraph. Case write-ups are graded
on the same system and you will receive written feedback from me on every assignment. Class participation and
write-up grades will be posted on Blackboard on a regular basis.
Page 3 of 9
If you need to miss a class, please send me and the course administrator a note 24 hours in advance with the
reason for missing. Like everyone who does attend, you must hand in the case analysis before the start of the class
you are missing. Review the recording of the class and submit a 5 page double spaced summary of what was
covered in the class lecture before the start of the next class.
Question I am always asked #1: How to Get an "A": If you do the readings and prepare to the point you have a
well written two page summary of the salient points for each class’s reading and case, hand in graduate level
responses to the assignments and participate in class at a high level on a consistent basis, you have a strong
probability of getting an A.
Question I am always asked #2: What if my idea ends up being a dud? Since we move at a very fast clip, you will
not be penalized grade-wise if you pick an idea that in the end you feel is not something worth pursuing. The real
key to start-ups is fast failures, so this is the environment to do this in. You will be graded on the quality and
thoroughness of your plan, regardless of the viability of the idea.
Question I am always asked #3: What about the quality of the management team? Yes, management teams are
typically the most important part of an investment decision. However, in a classroom environment you are limited
to the class population you are working with. Because of this, you will not be penalized grade-wise on the quality
of the management team.
Summary of Major Deliverables:
Notice: No slack time is built into these deliverables and the dates represent the latest write-ups can be handed in;
keep in mind you can always hand them in early!
Assignment 1: On September 13, your team will present your Ready plan of the Market Validation process covered
during the first two sessions. Your peers will also be evaluating the quality of these plans and their feedback will be
provided to you. Similar to an investor presentation, there is not a fixed format; the time slots will be allocated
before you present. The only constraint beyond time is you can never discuss your company, your product or your
features. There is nothing to hand in for this assignment.
Assignment 2: By noon on October 3, submit an executive summary of the opportunity you will be pursuing. This
material will be forwarded to the outside evaluators who will be attending the Wisdom Cluster on October 11. This
summary should be no more than 500 words, be precise and professionally written, double spaced, with 1 inch
margins all around and 12 point font.
Assignment 3: On October 25, your team will present your business model in class. This assignment will be similar
to Assignment 1 and more details will be provided in class.
Assignment 4: Bring to class on November 1 one quality question you have about the course for class discussion
that is printed, not hand written, and is handed in before class starts. This can be any detail we have not covered
or requests for more detail about the written plan or presentation process. This question will be graded along the
lines of the case write-ups.
Assignment 5: On November 22 at noon, submit your Team Written Business Plan electronically using Angelsoft;
instructions will be provided.
Page 4 of 9
Provide a complete and detailed business plan for a growth-oriented, new business venture. It should address all
appropriate elements of a well-constructed business plan. In the process, it should show the application of the
course material.
Plans are to be submitted as a single, printable PDF file. Plans are limited to no more than 16 pages (not including a
single cover page and single table of contents page). The 16 pages are limited to a maximum of ten pages of text
and 6 pages of appendices. Page format is 1½ line spacing with 1 inch top, bottom, left and right margins and 12
point fonts. This line spacing and font requirement applies to the textual content of the document and not to titles
and descriptions accompanying pictures, graphs, tables or worksheets. All pages must be numbered excluding the
cover and table of contents page. The cover page must include venture name and individual team members and
there must be a table of contents.
Spreadsheets and appropriate appendices can be added after the text portion of the plan, not exceeding an
incremental 6 pages. Appendices should be included only if they are referenced in the written plan. This is your
final business plan and what the outside judges will receive.
Assignment 6: On December 2, deliver a formal presentation of your business plan to a panel of experienced
business professionals for evaluation. You will have 15 minutes to make your presentation. After your
presentation, the judges will conduct a 15 minute question and answer session. Each member of the team must
participate in the oral presentation of the plan. The judges’ input will have a major impact on your team
presentation grade. Your PowerPoint presentation does not need to be handed in. The class presentations will be
broken into heats, and the winners of each of the heats will receive automatic “A’s” for the class. More details will
be circulated as we get closer to this date. On-line attendees need to be physically in Austin.
Page 5 of 9
Class Schedule
Session
Date Topic, Business Plan Coverage
and Class Activities
Preparation and Assignment
Materials from Blackboard,
Textbook or Syllabus
Assignments
1
August 30
Market Validation 1
Market Validation.ppt & .doc
Read entire Adams book
2
September 6
Market Validation 2
LoDrag Case
Market Validation.ppt & .doc
LoDrag Case
3
September 13
Market Validation 3
Team “Ready” Presentations
Assignment 1
4
September 20
Business Models 1
KidSmart Case
Business Models.ppt & .doc
KidSmart Case
5
September 27
Business Models 2
Halsa Pharmaceuticals Case
6
October 4
Business Models.ppt & .doc
Halsa Case
Assignment 2 due at noon on
Oct. 3
Financials.ppt & .doc
Phurnace Case
7
October 11
8
October 18
9
October 25
10
November 1
11
November 8
12
November 15
13
14
Financials 1
Phurnace Case
Wisdom Cluster
Financials 2
MacuCLEAR Case
Business Models 3
Team “Business Models”
Presentations
uShip Case
Omega Sensors Case
Open Question & Answer
Overview of the Venture Business
Start-up Legal Issues
Boards of Directors
Negotiating Financing
Communications
Style High Case
NeuroLife Case
Financials.ppt & .doc
MacuCLEAR Case
Assignment 3
November 22
Business Plan Work Session
Assignment 5 due at noon on
Nov. 22
November 29
Final Presentations
Details to be announced
Assignment 6
Assignment 4
uShip Case
Omega Sensors Case
Modules A, B, C & D.ppt
Communications.ppt & .doc
Style High Case
NeuroLife Case
Page 6 of 9
Feedback Form for Business Plan Case Analysis
Name:
Strong
Needs Work
Broad, sweeping, generalized
claims
Clear position on investment
Conciseness
Case repeats (assume the
reader knows the case)
Depth of analysis and
substance of write up
Energy and enthusiasm
behind reasoning
Evaluate deal as presented,
no advising or contingencies
Focus on facts versus opinions
Follow format guidelines
Readability
Spelling and grammar
Substantiation of claims with
case facts
Substantiation of claims with
quantitative detail
Unclear paragraph breaks
Value-added analysis
Final Grade out of a possible 3 points:
/3
If you have any questions review the guidelines from the syllabus and contact me, Rob.
Page 7 of 9
New Venture Creation Final Written Plan and Presentation Grade Sheet
Company name:
_______________________________________________________
Judge’s name (optional):
_______________________________________________________
May the company contact you?
Feedback on:
Yes
Business Plan
No
Presentation
Criteria
Score (0-10)
Market Validation (Module 1)
•
Clear disclosure and documentation and depth of Market Validation (surveys used, number of respondents, etc.)
•
Transferring Market Validation into executable results
Competitive analysis (Module 1)
•
Discussion of competitors
•
Depth of analysis
•
Use of comparables
Use of outside references and sources to reinforce plan (Module 1)
•
Use of sources to make the company’s business arguments
•
No overly broad, undocumented claims
•
Plan has substance
Business Model (Module 2)
•
Clear statement of the company’s Business Model
•
Economics of the Sales and Marketing model
•
Clear articulation of profitability and how it is attained
•
Company differentiation is reflected in the Business Model
Financing strategy (Module 3)
•
Discussion of financing method (bootstrap, debt, equity)
•
Payback of investors (including bootstrappers) that reflects financing method
Financial statements (Module 3)
•
Integrated I/S, B/S and C/F (written plan only, first year statement breakdown at minimum of quarterly; subsequent
annually)
•
Discussion of value inflection points
Overall quality of the plan or presentation (Module 4)
•
Clarity of description on the product or service
•
Grammar, punctuation, readability
•
Following of published guidelines
Executive summary (Module 4)
•
Quality
•
Conciseness
•
Ability to engage and hold interest
Enthusiasm and conviction of the plan or presentation (Module 4)
•
Was the writing or presentation infectious?
•
Was the team passionate about their pursuit?
Discretionary points
•
Incorporation of materials from lectures
•
Value added analysis
•
Substance and depth of effort
TOTAL (out of 100 points
Page 8 of 9
Page 9 of 9