2005-06
Dare to Dream Grants
Sponsored by the
Samuel Zell & Robert H. Lurie Institute
for Entrepreneurial Studies
Agenda
• What is the Dare to Dream program
• Two types of grants
• Applications and review
• Moving beyond Dare to Dream
Dare to Dream is a program to encourage
students in the thoughtful development of
their own businesses and business concepts.
The team leader must be an RSB current
student. Team members can be from outside
RSB and/or the University.
Development Stages & ZLI Programs
Opportunity
Identification
Ideate BusinessAssess Business
Integration
Business Launch
& Acquisition
ZLI Business Challenge &
Intercollegiate Competitions
Develop
Business
Grow
Business
Liquidity Event
Manage Turn-around
Entrepreneurial MAP
domestic & international
opportunities
Williamson – Early Stage
Commercialization
Frankel Fellows Program
Wolverine Venture Fund
Marcel Gani Internship Program (including JumpStart!)
Dare to Dream Grant Program
Assessment
Integration
Michigan Growth
Capital Symposium
Entrepalooza: overview of entrepreneurship across multiple industries, business stages and entrepreneurial concepts
Emerging Industries: in-depth exploration of an industry and family of technologies emphasizing entrepreneurial opportunity
Dare to Dream Grants are not
• A competition
• An endorsement of the business or
business concept
• An endorsement of the management team
• For academic credit
Dare to Dream Grants
• Encourage the creation, launch and
development of new student-led businesses
• Develop student entrepreneurial skills
Dare to Dream Grants are
Awarded to businesses and concepts for which
the student-led team has convinced ZLI of the
– Innovation
– Value
– Motivation
Encouragement for students to
– Take risks
– Explore opportunities
– Expend effort and dedicate time
Dare to Dream Applications
• Assessment Grants force answers the
questions
– Is there enough “there” there to justify assembling
a full plan?
– Are market need, proposed solution and target
market in line?
• Integration Grants drive the team to
– Dive deeper into the issues of formation and
launch
– Assemble full business plan to address all
concerns of launching and growing a business
Dare to Dream Grants and Business Stage Activities
Opportunity
Identification
Ideate
Business
Assess
Business
Business
Launch
Integration
•Do you have a solution
that delivers benefits and
solves market pain?
•Are you in the process of
deciding what your
business model will be?
•Have you completed a
Porter’s 5 Forces
analysis?
•Is your in-depth primary
market research
complete?
•Are all key managers
and board members
“lined up” or in place?
•Can you articulate the
innovation in your idea?
•Have you identified the
initial market?
•Do you know the
industry’s critical success
factors?
•Have you recruited and
partnered with a beta
customer?
•Is the “whole” or
“complete” product
package finalized?
•Have you articulated the
value proposition?
•Are initial financial and
cost estimates complete?
•Have you identified and
validated operational
milestones?
•Has your business plan
been distributed for
funding?
•Do you understand how
this company fits within
the industry?
•Have you conducted
your target market
research?
•Have you validated
assumptions and have a
dynamic financial model?
•Have you developed a full
investor pitch?
If “no” to either of
these two questions,
you are too early
for Dare to Dream.
Consider applying
next term.
•Do you have a preferred
market entry strategy?
•Has the company begun
generating revenues?
If you can answer “yes” to the two
“opportunity identification” questions, but
not to the all of the questions in these two
columns, apply for the Assessment Grant.
If you can answer “yes” to the questions in
the first three columns but not all in
“integration” and “business launch”,
apply for the Integration Grant.
If “yes” to all the questions on this page, you are most likely beyond Dare to Dream,
contact the Zell Lurie Institute BEFORE applying.
Dare to Dream Applications
• Student-led teams convince ZLI of
– Innovation
– Value
– Motivation
• Application and review criteria
– Different requirements and evaluation for
Assessment and Integration
Applications
Linked to the Zell Lurie Institute web site
www.zli.bus.umich.edu
• Three sections:
– Team information
– Business concept information
– Application and award agreement
• KNOW WHAT YOU ARE APPLYING FOR!!!
Assessment Application
•
What is innovative about the product or service you
are proposing? Is this a new or better product,
service, technology, business model, or process?
•
Describe the benefits of your product or service for
your target market segment.
•
What is the target market for this product or
service?
•
What are the initial indications of market potential
in terms of customers, units or revenues?
Assessment Application
•
What is the nature of the competition in your
market? If you are entering a new market, how are
customers’ needs being met now?
•
Describe the entrepreneurial aspirations of the
management team.
•
Describe the information needed and steps to
launch your business.
Integration Application
•
What is innovative about the product or service you
are proposing? What features make this superior?
•
Describe the benefits of your product or service for
your target market segment. What will your
solution displace?
•
What is the market potential for this product or
service in the initial target market segment? What
other attractiveness is there for that segment?
•
What is the nature of the competition in your
chosen market? What is the anticipated response
from current competitors and potential new
entrants?
Integration Application
•
What are the industry conditions that allow this
company to be competitive in the market?
•
Describe the entrepreneurial aspirations of the
management team.
•
Identify the critical success factors for this
business. How are they addressed by the team?
•
Provide a one-page financial summary for 2 years.
Critical Success Factors
•
•
•
CSFs are particular to the business model in a
specific industry.
In any concern, there are dozens of variables that
will determine the success or failure of a business.
CSFs are those 2 – 5 variables which “trump” all
the others.
–
Example: general retailing
•
CSF: “location, location, location”
–
–
Example: mass market retailing
•
CSF: logistics and inventory management
–
–
McDonald’s, Starbucks
Target, Wal-mart
Example: high-end retailing
•
CSF: customer relationships
–
Neiman-Marcus, Mercedes
Critical Success Factors
•
Which decisions or activities, done right, will
(almost) always deliver disproportionately positive
effects on performance?
•
Corollary – Fatal flaw
–
•
What few decisions or activities, if wrong, will (almost)
always have severely negative effects on company
performance?
How will you build your team and/or business
model to take full advantage of CSFs?
Example of 2-year financials
Q1 2005
Q2 2005
Q3 2005
Q4 2005
Q1 2006
Q2 2006
Q3 2006
Q4 2006
Unit Price
5.99
5.99
5.99
5.99
5.99
5.99
5.99
5.99
Units Sold
150
188
516
593
682
784
902
1037
Sales (Dollars)
898.50
1123.13
3088.59
3551.88
4084.67
4697.37
5401.97
6212.27
Cost of Goods Sold
Initial Cost ($.30/Unit)
(45.00)
(56.25)
(154.69)
(177.89)
(204.57)
(235.26)
(270.55)
(311.13)
Gross Margin
853.50
1,066.88
2,933.91
3,373.99
3,880.09
4,462.10
5,131.42
5,901.13
G & A Expenses
Printing and Mailing
(150.00)
(150.00)
(150.00)
(150.00)
(150.00)
(150.00)
(150.00)
(150.00)
Office Supplies
(25.00)
(25.00)
(25.00)
(25.00)
(25.00)
(25.00)
(25.00)
(25.00)
Website Development
(200.00)
(2,200.00)
(1,500.00)
(300.00)
(300.00)
(300.00)
(300.00)
(300.00)
Monthly Website Fee
(119.85)
(119.85)
(119.85)
(119.85)
(119.85)
(119.85)
(119.85)
(119.85)
Officer's Wages
(300.00)
(300.00)
(300.00)
(500.00)
(500.00)
(500.00)
(500.00)
(500.00)
Worksheet Editing Service
(200.00)
(300.00)
(400.00)
(400.00)
(400.00)
(400.00)
(400.00)
(400.00)
(500.00)
(300.00)
(300.00)
(300.00)
Accounting and Legal
Fees
Selling Expenses
Travel (Promotion)
(300.00)
(600.00)
(500.00)
(500.00)
(500.00)
(500.00)
(500.00)
(500.00)
Advertising and Promotion
(75.00)
(1,000.00)
(700.00)
(700.00)
(500.00)
(500.00)
(500.00)
(500.00)
Paypal Fees
(26.36)
(32.87)
(89.87)
(103.30)
(118.76)
(136.52)
(156.96)
(180.46)
$ (542.71)
$(3,660.85)
$ (850.81)
766.49
$ 1,530.73
$ 2,179.61
$ 2,925.83
Net income before tax
$
575.84
$
Evaluation of Applications
Most attractive for Assessment
Most attractive for Integration
Description of
product or service
Clearly articulated and understood.
Innovation
Solution uses new or better technology, process, or business model to deliver product or service
that adds value to customer.
Market needs,
benefits, value
Value for the customer is clear and likely
to be captured by the firm.
Clear value that is likely to be captured by the firm and
the firm has an understanding of the degree of
displacement of current market solution.
Market size
Some preliminary and believable
indication that market is large “enough.”
Market data supports large or large, growing market.
Relationship between target and broader market is
clear.
Industry
Attractiveness
Market dynamics and forces are supportive of new
players OR dynamics can be easily considered and
addressed by firm.
Competition
Competitive environment is favorable to firm and team
has identified modes to address. Response expected
to be weak and/or competently addressed.
Competition and
Industry
Entrepreneurial
Aspirations
Next Steps
Critical Success
Factors (CSFs)
Financial Planning
Shows understanding of competitive and
industry landscape.
Clearly articulated; convinced of ambitions; will likely continue to engage ZLI.
Shows understanding of business
development process.
The “right” CSFs have been identified and it is clear
the team has the understanding to capture.
Based on realistic assumptions, the financials are
Moving Beyond Dare to Dream
Encouragement for students to
– Take risks such as
•Executing primary research with customers and
technologists
•Undertaking incorporation process
•Recruiting and building a team
– Explore opportunities
•Is your solution the right solution for market need?
•Is there a better application or market for your solution
– Expend effort and dedicate time
• Fit these activities into your already busy Michigan
schedule
Moving Beyond Dare to Dream
Tie in to other entrepreneurial activities
– ES electives
•ES615: New Venture Creation
•ES###: Innovation (new for Winter ’06)
– Michigan Business Challenge
•Iterative, multi-cycle tournament for student-led
start-ups. Over $30,000 in prize money
– Marcel Gani JumpStart! internships
•Opportunities for student CEOs to intern at their
OWN start-ups
Process and Timeline
9/16
Information session
9/30
Fall ’05 applications due
10/14
Fall ’05 awardees announced
1/27
Next application deadline: Complete Fall ’05
Assessment deliverables become part of
application for Winter ’06 Integration
2/17
Winter ’06 awardees announced
4/14
Fall ’05 deliverables due
9/7
Winter ‘06 deliverables due
Questions?
Dare to Dream Grants
Paul Kirsch
pskirsch@umich.edu
Dare to Dream Grants and Business Stage Activities
Opportunity
Identification
Ideate
Business
Assess
Business
Business
Launch
Integration
•Do you have a solution
that delivers benefits and
solves market pain?
•Are you in the process of
deciding what your
business model will be?
•Have you completed a
Porter’s 5 Forces
analysis?
•Is your in-depth primary
market research
complete?
•Are all key managers
and board members
“lined up” or in place?
•Can you articulate the
innovation in your idea?
•Have you identified the
initial market?
•Do you know the
industry’s critical success
factors?
•Have you recruited and
partnered with a beta
customer?
•Is the “whole” or
“complete” product
package finalized?
•Have you articulated the
value proposition?
•Are initial financial and
cost estimates complete?
•Have you identified and
validated operational
milestones?
•Has your business plan
been distributed for
funding?
•Do you understand how
this company fits within
the industry?
•Have you conducted
your target market
research?
•Have you validated
assumptions and have a
dynamic financial model?
•Have you developed a full
investor pitch?
If “no” to either of
these two questions,
you are too early
for Dare to Dream.
Consider applying
next term.
•Do you have a preferred
market entry strategy?
•Has the company begun
generating revenues?
If you can answer “yes” to the two
“opportunity identification” questions, but
not to the all of the questions in these two
columns, apply for the Assessment Grant.
If you can answer “yes” to the questions in
the first three columns but not all in
“integration” and “business launch”,
apply for the Integration Grant.
If “yes” to all the questions on this page, you are most likely beyond Dare to Dream,
contact the Zell Lurie Institute BEFORE applying.