Entrepreneurship final review

Characteristic of social entrepreneurs as change agents

-adoption of mission to create & sustain social value (beyond personal value) -recognition & relentless pursuit of opportunities for social value -engagement in continuous innovation & learning -action beyond limited resources at hand -heightened sense of accountability

Fatal visions in strategic planning

1. Misunderstanding industry attractiveness 2. no real competitive advantage 3. pursuing an unattainable competitive position 4. compromising strategy for growth 5. failure to explicitly communicate the venture's strategy to employees

Dispelling venture capital myths

1. Venture capital firms want to own control of you & your company and tell you how to run the business 2. Venture capitalists are satisfied with a reasonable return on investment 3. Venture capitalists are quick to invest 4. Venture capitalists are interested in backing new ideas or high-tech inventions--management is a secondary consideration 5. Venture capitalists need only basic summary information before they make an investment

Steps for selling a business

1. develop succession strategy 2. have exit strategy (IPO) 3. complete sale of venture

Rules to securing a patent:

1. pursue broad, commercially significant patents that offer a strong position 2. prepare patent in detail 3. have actions relate to original patent plan 4. establish infringement budget 5. evaluate the patent plan strategically

What is entrepreneurial stress?

When entrepreneur's work demands and the expectations exceed their abilities

Duration of a copyright

author's life +70 years

Why should entrepreneurs adhere to a high moral code?

because unethical practices have a corrosive effect on the firm, free markets, & free trade. Also, improving the moral climate of the firm will eventually win back the public's confidence in the firm

Benefits of strategic planning:

cost savings, more efficient resource allocation, improved competitive position, more timely info, more accurate forecasts, reduced feelings of uncertainty, faster decision making, fewer cash-flow problems

Harvest plan

defines how and when the owners and investors will realize an actual cash return on their investment

Strategic planning includes:

defining venture's mission, specifying achievable objects, developing strategies, setting policy guidelines

Design patents last for ___ years, all others last for ___ years

design last for 14, all others last for 20

Underlying issues when acquiring a venture

differing goals of buyer & seller emotional bias of the seller

Trademarks

distinctive name, mark, symbol, or motto identified with a company's product(s) and registered at the Patent and Trademark Office. The owner has an exclusive right against use of similar marks that induce consumer confusion

Criteria for evaluating new-venture proposals

entrepreneur's personality & experience, product/service characteristics, market characteristics, financial considerations, nature of the venture team

Establishing a firm's value

firm value: =(tangible +intangible)-liabilities

Strategic planning

formulation of long-range plans for effective management of environmental opportunities & threats in light of a venture's strengths & weaknesses

Social entrepreneur

individual who found &/or lead an organization/initiative engaged in social entrepreneurship (wants to fix social problems). Creative thinkers continuously striving for innovation, change agents.

Evaluation process

initial screening, evaluation of business plan, oral presentation, final evaluation

Equity financing

involves the sale (exchange) of some of the ownership interest in the venture in return for an unsecured investment in the firm/money invested in the venture with no legal obligation for entrepreneurs to repay the principal amount of pay interest on it

Sources of entrepreneurial stress

loneliness, immersion in business, people problems, need to achieve

Venture development stages

new-venture development start-up activities venture growth (where they fail/succeed) business stabilization innovation/decline

Corporate entrepreneurship

process whereby an individual or group of individuals, in association with an existing organization, creates a new organization or innovation within organization

Pros & Cons to debt financing

pros: no relinquishment of ownership, potentially greater return on equity, lower opportunity cost cons: regular (monthly) interest payments are required, continual cash-flow problems can be intensified because of payback responsibility, heavy use of debt can inhibit growth/development

Pros & Cons of Public Offerings

pros: size of capital amount, liquidity, value, image cons: costs, disclosure, requirements, shareholder pressure

Copyrights

provides exclusive rights to creative individuals for the protection of their literary/artistic productions

Patents

provides owner with exclusive rights to hold, transfer, & license the production & sale of the product/process as an intellectual property right

Public Offerings ("Going Public")

refers to a corporation's raising capital through the sale of its securities on the stock markets (Initial Public Offerings, IPOs, are new issues of common stock)

Copyright owner has rights to

reproduce the work, prepare derivative works based on it, distribute copies of the work by sale or otherwise, perform work publicly, display work publicly, sell/transfer individual rights

Types of patents

utility (process, machine, article of manufacture) design (new, original, & ornamental design for an article manufacture) plant (to anyone who invents/discovers & asexually reproduces any distinct & new variety of plant)

Complexity of decisions

Entrepreneurs should have ethics & a moral code.

Steps in strategic planning:

SWOT, formulate venture's long range & short range strategies, implement strategic plan, evaluate performance of strategy, take follow-up action through continuous feedback

Debt financing

Secured financing of a new venture that involves a payback of the funds plus a fee (fee is interest for the use of the money)

Average time awaiting first action patent:

18.4 months

Average time to completion of patent:

27.4 months