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08 October 2014 Different Types of Entrepreneurship



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Different Types of Entrepreneurship Entrepreneurship 101

P R E S E N T E D B Y A L L Y S O N H E W I T T , S E N I O R F E L L O W, S O C I A L I N N O V A T I O N & D I R E C T O R , S I G @ M A R S

A N D K E R R I G O L D E N , P A R T N E R , J O L T F U N D A N D D I R E C T O R ,

U R B A N F L A T S T O R O N T O

O C T O B E R 2 0 1 4



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“ What we will cover today:

§  Self Assessment

§  Corporate Structure Op\ons

-  Con\nuum from Charity to For Profit

§  Types of Businesses: both tradi\onal and social ventures

-  Consul\ng

-  Services

-  Products

-  The Sharing Economy

-  Scale and Profiles for Business Types

§  Forms of Financing

§  Sources of Financing



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SELF ASSESSMENT

pg 4

What is my business structure? -  For profit? -  Not-‐for-‐profit? -  Co-‐opera\ve? -  Hybrid

Why do I want to start this business? -  What is my mo\va\on?

Do I have the skills/ ap\tude to be an entrepreneur? -  Am I comfortable taking risks? -  Is this something I feel I have to do?

What resources do I need?

-  Basement or corporate office? -  Shared spaces/incubators?

How do I fit into the rest of the world? -  Is my product and/or service unique? -  Have others tried this before?



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Return Con0nuum

Grant Funded Non-‐Profit (Charity)

RETURN

Social (Charitable) Financial (Commercial)

Tradi=onal Business

Revenue Genera=ng NFP (Social Enterprise)

Social Purpose Business

Blended Value Space

Social Ventures

Coopera=ves



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Our Future Ma9ers pg 6

BLURRING OF THE SECTORS



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SOCIAL ENTERPRISE



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SOCIAL PURPOSE BUSINESS



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CONSULTING •  Key Characteris\cs

–  Mul\ple par\cipants, diverse focus, variable size, leverage core assets to provide access to market and advice

•  Examples

–  Consul\ng: McKinsey, Bain, Deloi9e, IBM, Hatch

–  Aperio, Purpose Capital

•  Benefits & Risks of Model

–  Low capital costs and minimal set-‐up

–  Leverages specialized knowledge/experience

–  Liability insurance, can be difficult to build/scale



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SERVICES •  Key Characteris\cs

–  Speciality business serving consumers or other businesses

•  Examples


–  Online sofware as a service

–  Infrastructure costs may be high: ini\al development, servers, support, staffing



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SERVICES Tradi\onal Courier Services



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SERVICES Social Enterprise Courier Services



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PRODUCTS

pg 13

•  Key Characteris\cs –  Tangible offering (consumer products, pharmaceu\cals, equipment or devices)

•  Examples


–  Higher development costs; marke\ng

–  Sales and distribu\on model

–  Produc\on costs high, outsource?

–  Poten\al for scale – huge

–  Trends: collabora\ve consump\on, wearable technology



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SOCIAL ENTERPRISE PRODUCTS

pg 14



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SHARING ECONOMY

pg 15



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EMPLOYER BUSINESSES – 1.1M strong

pg 16

Source: Sta=s=cs Canada



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SCALE AND PROFILE OF BUSINESS TYPES

•  Lifestyle business –  Part-‐\me Yoga Instructor

–  Ofen a hobby of the owner •  SMEs – “engine of the economy”

–  Founded 2009, employs 5+

–  Profitable, Growth 10-‐15% per year •  Growth Companies -‐ Hootsuite

–  Founded 2008, 500 employees and growing –  10M+ users, including 744 of Fortune 1000

•  VC/PE study es\mated 13,000 high growth companies in Canada

pg 17



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FORMS OF FINANCING

•  Forms of Financing –  Bootstrap -‐ self-‐fund and reinvest all profits for growth

–  Crowdfunding – for product pre-‐orders, films, games, projects

-‐  Crowdfunding – tailored for causes and chari\es

–  Fundraising -‐ grants/ founda\ons/ government funding/ corporate sponsorship/ members (co-‐ops)

pg 18



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DEMONSTRATE IMPACT



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DEBT AND EQUITY

pg 20

•  A quick primer on debt versus equity:

q  Debt:

•  gets paid back first, before any dividends get paid

•  secured by assets (company, your personal)

•  once debt is repaid (with interest of course), lender gets nothing else

q  Equity:

•  never has to be “repaid”

•  keeps on “paying” forever

•  you now have an investor partner who is in this, like you, for the long haul



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MOBILE APP EXAMPLE You need $40K to build/market a new iOS app

You have a grant for $10K so funding needed is $30K

Profit Debt 50:50 Equity

Low on chart $10K lender loses $20K* partner loses $25K you get $0K & owe $20K you get $5K

Featured appis $30K lender is even+ partner loses $15K you make $0K you make $15K

Top of Chart $200K lender is even+ partner makes $70K you make $170K you make $100K

Gran\ng agency reports your success!



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SOURCES OF FINANCING

pg 22

The turkey principle



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•  Angels (aka high net worth individuals) – Generally like to invest in areas that they have worked in or are comfortable with – Can add valuable hands-‐on experience – h9p://www.angelinvestor.ca/

•  Accelerator Programs – Supported by angels and VC funds – Impact8 for social ventures

•  Venture Capital Funds – Different funds invest at different stages in the growth of a company – Most funds also specialize in type of investment – h9p://www.cvca.ca/



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Our Future Ma9ers pg 24

SOCIAL FINANCE



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SVX – SOCIAL VENTURE CONNEXION

pg 25



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•  Proof of Principle / Idea to Innova\on –  www.ResearchNet.ca –  www.nserc-‐crsng.gc.ca/index_eng.asp –  www.cmf-‐fmc.ca/funding-‐programs –  www.oce-‐ontario.org/programs –  h9p://coralcea.ca/

•  NRC -‐ IRAP –  h9p://irap-‐pari.nrc-‐cnrc.gc.ca/main_e.html

•  Founda\ons: –  Ontario Trillium Founda\on -‐ www.trilliumfounda\on.org –  JW McConnell Family Founda\on -‐ h9p://www.mcconnellfounda\on.ca/en –  Gates Founda\on – www.gatesfounda\on.org –  Imagine Canada -‐ h9p://www.imaginecanada.ca/node/22

pg 26



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HOW TO CONTACT US: Allyson Hewi9, [email protected] Twi9er: @AllysonHewi9 Kerri Golden, [email protected] Twi9er: @KerriGolden

THANK YOU!

B E C A U S E T H E F U T U R E M A T T E R S

September 2014

INNOVAT ION