ENT3003 Exam #3

the 4Ps

product price promotion place

Nondisclosure agreement (NDA)

(confidentiality agreement), which is a legal contract that outlines confidential information shared by two or more parties. -Neither party has the right to share this information with competitors, the general public, or anyone else outside those involved in the agreement.

Power

A stakeholder in a position of power has the ability to either help or hinder your social objectives

Bootstrapping strategies

CASH IS KING Work from home to save on renting an office Never buy new what you can borrow, lease, or get for free Take as little salary for yourself for as long as possible Use your network of friends and family to get what you need at a reduced rate or for free Educate yourself on basic legal and accountancy matters before paying higher fees to a lawyer or accountant Reimburse advisors and consultants with equity and goodwill.

How to build a brand

Choose a name Design a logo Spread the word Know your customer Become your brand Write a tagline Always deliver in your brand promise Be consistent with your brand

Venture philanthropy funding

Combines financial assistance such as grants with a high level of engagement by the funder

Reasons to bootstrap

Complementing current traditional forms of financing because they don't have access to traditional forms of financing because they don't have A business history Proven track record Enough customers

Similarities between social and traditional entrepreneurs

Creating marketing initiatives Creating innovative services or solutions Mission statement

crowdfunding for startups

Crowdfunding can be an effective way of getting the funds needed to start a business, or at least, show proof of concept. Crowdfunding has helped raise billions for all types of businesses Crowdfunding makes all types of entrepreneurship accessible to those who want to start their own business. Many crowdfunding projects seek small amounts of money to fund one-off occasions like community or arts events, with family and friends being the main. Most crowdfunding projects seek small amounts of money to fund one-off occasions like community or arts events, with family and friends being the main contributors.

Discretionary stakeholder

Have no power to influence and no urgent claims, but they have legitimacy

True fans

People who will buy anything you produce; they will wait in line for your products, drive for hours to attend one of your events, and preorder your next product without even knowing what it looks like

Three primary attributes of stakeholders to consider when you are trying to achieve your objectives

Power Legitimacy Urgency

7Ps

Price Place Promotion Product People Packaging PositioningPe

Stages of equity

Seed-stage financing Startup financing early-stage financing

Due diligence

a rigorous process carried out to evaluate an investment opportunity prior to a deal being

Startup financing

a stage of financing in which money is provided to entrepreneurs to enable them to implement their idea by funding product research and development.

seed-stage financing

a stage of financing in which small or modest amounts of capital provided to entrepreneurs to prove a concept.

Venture capitalist

a type of professional investor who generally invests in early-stage and emerging companies because of perceived long-term growth potential. -Seed-stage and startup entrepreneurs tend to seek out angel investors when they are initially trying to grow and scale the organization.

Promotion

all the ways in which companies tell their customers about what they are offering. This may involve advertising online, through social networking, direct mail, in the press, or even on TV if you have the budget Also includes PR

entrepreneurial marketing requires

an interactive approach

trademark

any word, name, symbol, or device used in business to identify and promote a product its counterpart for service industries is the service mark

Enterprising

are a form of social entrepreneurship in which both the venture and the market impact are for social purposes. Compared to other startups, these are more likely to survive in business after the first 5 years

Debt financing

borrowing money to start a business that is expected to be paid back with interest at a designated point in the future.

Social consequence entrepreneurship

describes a for-profit venture whose primary market impact is social.

disadvantages of convertible debt

early lenders may not want to take the risk of having their money tied up until the debt is converted to equity. They may also be wary of losing money if the conversion event does not happen.

Advantages of convertible debt

emoves the need for valuation (you dont need to see how much your company is worth) and the entrepreneur will remain the majority stakeholder, with no interference from your lenders.

Types of angel investors

entrepreneurial angels Corporate angels Professional angels Enthusiast angels Micromanagement angels

New business owners

former nascent entrepreneurs who have been actively involved in a business for more than 3 months but less than 3.5 years

Necessity-based entrepreneur

individuals who are pushed into starting a business because of circumstance

Potential entrepreneurs

individuals who believe they have the capacity and know-how to start a business without being burdened by the fear of failure

Nascent entrepreneurs

individuals who have set up a business they will own or co-own that is less than 3 months old and has not yet generated wages or salaries for the owners

Intellectual property (IP)

intangible personal property created by human intelligence, such as ideas, inventions, slogans, logos, and processes.

Crowdsourcing

involves using the internet to attract, aggregate, and manage ostensibly inexpensive or even free labor from enthusiastic customers and like-minded people. -A resource for talent and labor -Means of obtaining information that is contributed and shared by members of a given crowdsourcing platform. -A source of bootstrapping, it is a valuable method of saving money by utilizing the expertise and knowledge of the crowd to bring your ideas to life. -Many companies use crowdsourcing to save labor costs

Stakeholders

people or groups affected by or involved with the achievements of the social enterprise's objectives Includes employees, volunteers, investors, customers, suppliers, and manufacturers, leaders in nonprofit organizations, community leaders, the government, sponsors, board members, and other entrepreneurs

The most important factor to consider when you are seeking investment

s to find investors who are most suitable for your stage of the company.

Established business owner

those who have been active in business for more than 3.5 years

legal considerations can add

value to entrepreneurial ventures

Enthusiast angels

independently wealthy retired or semi retired entrepreneurs or executives who often invest their personal capital in startups as a hobby. They tend to invest in several different companies and rarely take a role in active management.

Types of legal structures

sole proprietorship General partnership C Corporation S Corporation Limited liability company (LLC) Benefit Corporation (B corp) Not-for-profit

Price

the amount that the customer is expected to pay for the product, its perceived value, and the degree to which the price can be raised or lowered depending on market demand and how competitors price rival products

Marketing mix

the combination of product, price, promotion, and placement of what a company is offering

Vesting

the concept of imposing equity forfeitures on cofounders over a certain period of time on a piecemeal basis should not stay with the company

Angel investors

"Angel" - anyone who uses personal capital to invest in an entrepreneurial venture. Angels are eligible to invest as long as they are accredited investors Often self-made entrepreneurs themselves and they can add significant value by providing skills, advice, and expertise, as well as lucrative contacts.

Convertible debt

(convertible bond/note) a short-term loan that can be turned into equity when future financing is acquired. The middle ground between debt and equity financing.

A quick guide to successful crowdfunding

1. Make sure your product or service solves a real problem 2. Test and refine your ideas 3. Be prepared 4. Seek and accept advice 5. Get your campaign started - now! 6. Money matters 7. Focus on the pitch 8. Make the most of crowdfunding opportunities 9. Commit to your campaign 10. Avoid the crowdfunding curse

Early-stage financing

: a stage of financing that consists of larger amounts of funds provided for companies that have a team in place and a product or service tested or piloted, but as yet show little or no revenue.

Wicked problems

: larger, complex social problems where there is no clear solution; where there is limited, confusing, or contradictory information available, and where a whole range of people with conflicting values engage in debate.

Unicorn

A tech startup company that has received a $1 billion valuation, as determined by private or public investment Unicorn startups are rare, but they are also becoming more common.

Angel investor

A type of investor who uses his or her own money to provide funds to young startup private businesses run by entrepreneurs who are neither friends or family

Types of stakeholders

Dormant stakeholders Discretionary stakeholders Demanding stakeholders Dominant stakeholders Dangerous stakeholders Dependent stakeholders Definitive stakeholders

investors look at 3 main things

Great teams Big markets Unique innovative ideas

Characteristics of IP

IP law includes the copyright, trademark, trade secret, and patent protections for physical and nonphysical property that is the product of original thought and that can, in some sense, be owned. It is a valuable asset for entrepreneurs IP is the backbone of innovation all over the world because it plays a significant role in economic growth and development Many startups are dependent on IP protection, regardless of industry or line of business. IP is one of the more valuable assets for startups when it comes ton transforming ideas and innovations into real market value One of the major assets that investor look for in a startup IP law can be complex, confusing, and entirely misunderstood IP ownership is not straight forward

8 components of the entrepreneurship method

Identify your desired impact on the world Start with means at hand Describe the idea today Calculate affordable loss Take small action Network and enroll others in your journey Build on what you learn Reflect and be honest with yourself These will enable you to think creatively about starting a business with little or no money

Some features of entrepreneurial marketing

Innovation Risk taking Resourcefulness Value creation Proactivity

Tips for investors

Investors will want to know your experience and your team's past successes. Investors will want to see how many people use your product or service Having a distribution channel already set up is attractive to investors The industry in which you are operating might just be very popular at the moment.

Types of crowdfunding sites

Kickstarter Indiegogo Circleup GoFundMe

Legitimacy

Legitimate stakeholders are those whose actions are appropriate, proper, and desired in the context of the company, organization, or community

Tips to engage with you customers

Make your content about them, not you Develop a fresh point of view Pick your battles Be authentic Use your gut

Global IP traps

Publicly disclosing your innovation Failing to protect product and processes Inability to determine originality Failure to assign ownership Failure to protect IP in global markets 14.7 hiring employees

Refining the 4Ps

Solution instead of product Access instead of place Education instead of promotion Value instead of price

Demanding stakeholder

They have no power to legitimacy and may be the only dissenting voice in the room

Dormant stakeholders

They hold power but do not tend to use that power unless they are given a reason to do so

Ugency

Urgency describes the extent to which stakeholders demand your attention

Marketing trends

Virtual reality Artificial intelligence Honesty Influencer marketing Experiential marketing (engagement marketing) Marketing through education

Sole proprietorship

a business owned by one person who has not formed a separate entity to run it -This is the simplest and most inexpensive form of legal structure for startups, but is rarely the correct choice. -BUT you are held personally liable for any debts the business incurs.

Limited liability company (LLC)

a business structure that combines the pass-through taxation aspects of a partnership with the limited benefits of a corporation without being subject to the eligibility requirements of an S corporation

Founders agreement

a clear agreement between founders on a number of key issues that their business might face -Usually comes before written agreements and helps founders answer the tough questions before entering into legal contract -Provides a useful overview of how your cofounders intend to tackle problems in the future

intital public offering

a company's first opportunity to sell stocks on the stock market to be purchased by members of the general public.

Investor model

a crowdfunding model that gives backers an equity stake in the business in return for their funding.

Reward-based crowdfunding

a crowdfunding model that involves rewarding backers for supporting a project.

Patronage model

a crowdfunding model where backers do not expect any direct return for their donation or investment,

Lending model

a crowdfunding model where funds are offered as loans with the expectation that the money will be repaid.

Equity crowdfunding

a form of crowdfunding that gives backers the opportunity to become shareholders in a company

Benefit corporation (B-corp)

a form of organization that ensures that strict standards of social and environmental performance, accountability, and transparency are met.

copyright

a form of protection provided to the creators of original works in the areas of literature, music, drama, choreography, art, motion pictures, sound recordings, and architecture

patent

a grant of property rights on inventions through the U.S. government It excludes others from making, using, selling, or importing the invention without the patent owner's consent

Snowbranding

a guerilla marketing technique that involves making imprints of the product's name and brand during the night on snow-covered pavements, walls, cars, and the like

Brand strategy

a long-term plan to develop a successful brand. It involves how you plan to communicate your brand messages to your target customers. Your brand messages can be :channel through advertising, distribution, and packaging. Two most power brands: Coca-cola and Nike

General rule of thumb

avoid seeking investment for as long as possible, to give your enterprise time to grow and build value so that you can secure a better deal with investors later on.

Hybrid model of social entrepreneurship

describes an organization with a purpose that equally emphasizes economic and social goals

Corporate Social Responsibility (CSR)

describes the efforts made by corporation to address the company's effects on environmental and social well-being in order to promote positive change

Venture capitalists

e often former or current entrepreneurs, but unlike angels, they are mostly professional money managers. Investors attract other investors

Investment

entrepreneurs are selling part of their business in exchange for investment in the form of cash to operate and grow the business.

Micromanagement angels

entrepreneurs who have achieved success through their own companies and want to be involved in the ventures they invest in. -They demand directorship or a position on the board of advisors and expect regular updates on the running of a company. -They intervene in the running of the business if it does not perform to their expectations.

Dominant stakeholder

have both power and legitimacy, which gives them strong influence in your organization

Dependent stakeholder

have urgency and legitimacy but lack the power to influence. They are the most passionate, and their passion is likely to affect dominant stakeholders

Opportunity-based business

individuals who make decisions to start then own businesses based on their ability to create or exploit an opportunity, and whose main driver for getting involved in the venture is being independent or increasing their income, rather than merely maintaining their income.

Accredited investors

investors who earn an annual income of more than $200,000 or have a net worth of more than $1 million. -Research shows that startups that have received angel backing are more likely to survive. -Entrepreneurs are able to scale sooner, hire employees, and generate greater revenue, which all leads to potential for later-stage investment.

Earned-income activities

involve the sale of products or services that are used as a source of revenue generation.

Crowdfunding

is generally reserved as a fundraising mechanism for small projects.the process of raising cash for a new venture from a large audience, typically through the internet - has been a new pathway for many entrepreneurs -People who use crowdfunding to raise money are known as crowdfunders, and people who contribute financial support to crowdsourcing ventures are known as backers -A resource for money is generally reserved as a fundraising mechanism for small projects.

Social purpose ventures

is to resolve a social problem and make a profit.

Entrepreneurial angels

ntrepreneurs who have already successfully started and operated their own businesses, which they may or not still be running. -They usually have a steady flow of income that allows them to take higher investment risks. -They are most valuable to early ventures

People (7Ps)

people responsible for every aspect of sales and marketing

collateral

personal assets (such as a home) to borrow against, so if the entrepreneur cannot pay back the loan, the bank can take the home and sell it in order to recoup the loan.

Dangerous stakeholder

possess both power and urgency but may use this power to coerce or even resort to violence

Marketing

the method of putting the product in the right place, at the right price, at the right time

Definitive Stakeholder

the only ones who possess all 3 attributes of power, legitimacy, and urgency

Total entrepreneurial activity

the percentage of the population of each country between the ages of 18 and 64 who are either nascent entrepreneurs or owner-manager of a new business

Bootstrapping

the process of building or starting a business with no outside investment, funding, or support. It is all about finding creative ways to access every resource you have available to launch your venture while minimizing the amount of cash you spend.

branding

the process of creating a name, term, design, symbol, or any other feature that identifies a product or service and differentiates it from others. Your brand is a promise to customers, letting them know what they can expect from your offering and how it differentiates you from among other competitors.

Equity financing

the sale of shares of stock in exchange for cash. -It gives entrepreneurs capital, which are financial resources to run the business including producing and selling the product. Equity financing is a way to get capital from investors to start or grow a business.

Goal of entrepreneurial marketing

to meet and satisfy customer needs (the main focus is on the customer instead of on profit)

Place

where the product is actually distributed to your target market: trade fairs, retail stores, catalogs, mail order, online, and so forth.

Packaging (7Ps)

which is the process that explores every dingle visual element of the external appearance of an offering through the eyes of your consumer.

Ways to bootstrap your new venture

You can use cash from your savings Carefully use certain credit cards Fund your startup out of your salary from your existing job Take equity out of your home

S corporation

a corporation whose stockholders elect special treatment for income tax purposes.

Positioning (7Ps)

a marketing strategy that focuses on how customers think or talk about your product and company relative to your competitors

Sweat equity

a non-monetary investment that increases the value or ownership interest created by the investment of hard work for no compensation.

Credit rating

a poor credit rating will get you turned down immediately, but even a good credit rating is no guarantee you will get a loan

Limited Partnership (LP)

A partnership consisting of one or more general partners and one or more limited partners.

Forms of equity investment

Angel investor Venture capitalist

Angel groups

Angel investors have begun to form groups to evaluate and invest in startups -They meet regularly to hear pitches, ask the entrepreneurs questions, adn decide if there is enough interest to hear more -These angle groups are spread all over the country and tend to specialize in specific areas. -Women are better investors then men, as they take more time researching potential entrepreneurial investors, spot more market opportunities than men, and take on less risk.

Splitting the pie

Founders agree to a percentage of ownership of something that doesn't really exist, and the question becomes, how do you determine who should get what percentage of what pie. Divide the pie before you build the company

Characteristics of guerilla marketing

Guerilla marketing strategies are almost limitless: email, interactive poster campaigns, advertisements on cars, T-shirts, street branding ect. When guerilla campaigns go viral, they can reach a huge audience Guerilla marketing strategies are also used by major companies Guerilla marketing success can be difficult to measure. Guerilla marketing cab be creative and affordable way to reach your desired target market, but it has its limitations Planning a guerilla marketing campaign requires commitment, creativity, consistency, patience, and a true understanding of your target market.

Global IP theft

Millions of people all over the world violate IP laws every day. -Piracy of digital content such as movies, music, software, games, and e-books

History of venture capital

Roots trace back to the early 20th century. -Wealthy families such as the Rockefellers were looking for ways to earn profits by investing in promising young companies. American research and Development was created in 1946 by cofounder of Harvard Business School

Tips for getting the most out of social media

Start with research Think about your goals Design your strategy Post regular updates Monitor your social media

Guerilla marketing

a low-budget strategy that focuses on personally interacting with a target group by promoting products and services through surprise or other unconventional means.

In order to qualify as an S-corp, the corporation must be

U.S. domestic corporation Have no more than 100 shareholders (and must be U.S. citizen) Does not have double taxation

C corporation

a separate legal entity created by the state government and owned by an unlimited number of shareholders. -The corporation (not the shareholders) are legally liable for its actions -Transferable ownership: the corporation can issue shares of stock to investors in exchange for capital. -Double taxation - the company is taxed twice, first on the profit it makes, and second, the shareholders are taxed on dividends.

Entrepreneurial marketing

a set of processes adopted by entrepreneurs based on new and unconventional marketing practices to gain traction and attention in competitive markets. -This type of marketing requires fewer resources -It is about chasing reputation, credibility, and buzz then sales follow

Not-for-profit

a tax status available to corporations, LLCs, trusts, and other structures that meet specific criteria set out in internal revenue code.

Capacity

a track record in business to prove the entrepreneur has the capacity to generate income to make loan payments.

Limited Liability Partnership

a type of partnership in which all partners are limited partners

trade secret

any confidential information that provides companies with a competitive edge and is not publicly known or accessible, such ad formulas, patterns, customer lists, compilations, programs, devices, methods, techniques, r processes

product

anything tangible or intangible (such as a service) offered by the company. This includes the features, the brand, how it meets customer needs, how and where it will be used, and how it stands out from competitors.

Professional angels

are doctors, lawyers, dentists, accountants, consultants, and the like, who use their savings and income to invest in entrepreneurial ventures. -they are silent investors

capital

assets that can be used to create products that can then be sold and converted to cash to pay back the loan.

4 types of intellectual property

copyright trademark trade secret patent

Corporate angels

individuals who are usually former business executives, often from big multinationals, looking to use their savings or current income to invest. -They want to play a larger part in the company, often seeking a paid position in the venture. -They can often become frustrated working in a small company with limited resources -They can be very controlling

General partnership

involves two or more people who have made a decision to comanage and share in the profits and losses of a business -Relatively low cost and straight forward -Recommended to have a formal partnership agreement drafted by a legal expert