Chap7

Technology Ventures: From Idea to OpportunityChapter 7: Summary

The method of enterprising is to plan with audacity and execute with vigor.

Christian Bovee

How are ventures actually formed and what is the role of the business plan?

Entrepreneurs respond to attractive opportunities by forming new ventures. One particularly important step is the development of a business plan. We also discuss the benefits of joining a cluster of interconnected enterprises.

Summary

Technology Ventures: From Idea to OpportunityChapter 7: Figure 7.1

Building A New Business

Opportunity

Vision

Access to Distinctive Capabilities of Resources Competencies the Team Innovation Business Industry or Strategy Context Novelty Talent Structure Processes Profitability

Technology Ventures: From Idea to OpportunityChapter 7: Table 7.1

Step

1. Identify and screen opportunities. Create a vision and concept statement and build an

initial core entrepreneurial team. Describe the initial ideas about the value proposition and

the business model.

2. Refine the concept, determine feasibility and prepare a mission statement. Research the

business idea and prepare a set of scenarios. Draft the outline of a business plan and an

executive summary.

3. Prepare a complete Business Plan with a financial plan, and the legal organization suitable

for the venture.

4. Determine the amount of financial, physical and human resources required. Prepare a

financial model for the business and determine the necessary resources. Prepare a plan

for acquiring these resources.

5. Secure the necessary resources and capabilities from investors as well as new talent and alliances. Launch the organization

The Five-Step Process for Establishing A New Venture

Technology Ventures: From Idea to OpportunityChapter 7: Exercise

Consider the corporate venture creation process of a firm you know or have worked for. Describe their creation process and their successes and failures. How could they improve the process?

Technology Ventures: From Idea to OpportunityChapter 7: concept

A business plan is a document that describes the opportunity, product, context, strategy, team, required resources, financial return, and harvest of a business venture.


The Elements of a Business Plan

Executive Summary

The Opportunity — Quality, Growth potential

The Vision — Mission, Objective, Core Concept

The Product or Service — Value Proposition, Business Model

The Context — Industry, Timeliness, Regulation

The Strategy — Entry, Marketing, Operations, Six Forces

The Organization — Structure, Culture, Talent

Chapter 7: Table 7.2 continued Technology Ventures: From Idea to Opportunity

The Elements of a Business Plan (cont.)

The Entrepreneurial Team — Capabilities and Commitment The Financial Plan — Assumptions, Cash Flow, Profit The Required Resources — Financial, Physical, Human The Uncertainties and Risks The Financial Return — Return on Investment The Harvest — Return of Cash to Investors and Entrepreneurs


Solutions or technologies looking for a problem

Unclear or incomplete business model and value proposition

Incomplete competitor analysis and marketing plan

Inadequate description of the uncertainties and risks

Gaps in capabilities required of the team

Inadequate description of revenue and profit drivers

Limited or no description of the metrics of the business

Lack of focus and a sound mission

Too many top down assumptions like "we will get 1% market share"

Limited confirmation of customer demand or pain

Ten Common Mistakes or Gaps in Business Plans


The business plan serves as the alignment tool for a new business venture.

Resources Financial Physical Intellectual

Deal Reward, Risks Incentives Ownership Harvest

People The Team Capabilities Attitude Reputation

Opportunity Customers Strategy Business Model

The Business

Plan

Context: Economy, Regulatory, Industry


A cluster is a geographic concentration of interconnected companies in a particular field. A new company within a cluster is more likely to find the employees and infrastructure that it needs.


The Three Interrelated Factors That Determine The Quality of Life on Earth

Societal Quality of Life and Equity—

Social Capital

Global and Regional

Environmental Quality—

Natural Capital

Economic Growth and Standard of

Living— Economic Capital


A social entrepreneur is a person or team that acts to form a new venture in response to an opportunity to deliver social benefits while satisfying environmental and economic values.

Technology Ventures: From Idea to OpportunityChapter 7: Principle

Entrepreneurs can learn and master a process for building a new venture and they communicate their intentions by writing a business plan.

Technology Ventures: From Idea to OpportunityChapter 7: Venture Challenge

VENTURE CHALLENGE1) Create a draft table of contents for your venture’s

business plan.

2) Describe your process necessary for creating a business plan.

3) Write an executive summary for your opportunity.

4) Will your firm locate in a region that offers cluster dynamics?

5) What steps will your venture take to be socially responsible?

Technology Ventures: From Idea to OpportunityChapter 7: DVD Video

DVD Video

“Changing the Business Plan in Response to a Changing Environment”

Gordon Ringold (Surromed)