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