Center for entrepreneurial studies nasf 2-12-2010

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A presentation on entrepreneurship by Lisa Sweeney, Center for entrepreneurial Studies (Stanford School of Business). Meeting held as part of the NASF (www.nasf.es) trip to Silicon Valley

A presentation on entrepreneurship by Lisa Sweeney, Center for entrepreneurial Studies (Stanford School of Business). Meeting held as part of the NASF (www.nasf.es) trip to Silicon Valley

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  • 1. Entrepreneurship in Silicon Valley and at Stanford December 2, 2010 Center for Entrepreneurial Studies
  • 2. Agenda
    • Entrepreneurship in the U.S.
    • Silicon Valley – What Is So Special?
    • Entrepreneurship at Stanford and the Graduate School of Business (GSB)
    • Q&A
  • 3. Entrepreneurship in the U.S.
  • 4. New Ventures in the U.S.
    • Many U.S. businesses start small (1-5 people)
    • Three common misconceptions are:
          • The typical founder is a “serial entrepreneur” with a technical and business background
          • New ventures are started by young, highly-educated entrepreneurs
          • Entrepreneurs must raise hundreds of thousands or millions of dollars to achieve profitability
    • Surveys show otherwise…
  • 5.  
  • 6.  
  • 7. Silicon Valley – What is So Special?
  • 8. Where is Silicon Valley? Dec 2, 2010 Center for Entrepreneurial Studies
  • 9. Silicon Valley Ecosystem Entrepreneurs
    • Sources of capital
    • Government
    • Private
    • Risk capital (angels and VCs)
    • Skilled human capital
    • Workforce
    • Service providers and advisors
    • Institutions that generate ideas and talent
    • Research universities
    • Labs
    • Think tanks
    • Incubators
    • Unique culture
    • Free markets
    • Stable legal system
    • Reliable infrastructure
  • 10. The Secret Sauce
    • Unique Culture
    • Free flow of people and information
    • Supports experimentation
    • Innate desire to discover and disrupt
    • Continual innovation
    • Collaborative
    • Rewards risk taking and tolerates failure
    • Sharing of risk and reward
    • Meritocracy
    • Ethic of extreme work habits
    • Highly sophisticated support system (lawyers, developers, marketers, accountants, headhunters, designers, etc.) willing to share early risk
    • Free Markets
    • Encourage labor and capital mobility
    • Tax regime that does not penalize new venture creation
    • Support real competition
    • Provide many potential options for exits
    • Sufficient, but not overwhelming, government regulation
    • Government funds and turns over new ideas to private sector
    • Stable Legal System
    • Well defined corporate and securities law
    • Clear intellectual property rights
    • Low barriers and costs to start a new venture
    • Well-defined corporate governance
    • Reliable Infrastructure
    • Utilities
    • Transportation
    • High penetration of technology (internet, broadband)
  • 11. New Ventures in Silicon Valley
    • Silicon Valley supports larger, more technically and scientifically-based new ventures or “start-ups”
    • These businesses are supported by well-developed funding models and networks (e.g., series financings by venture firms)
    • Founders typically bootstrap the business - goal is to develop a business plan, prototype, proof of concept and customers
    • Founders then shop the business to angel, VC, private equity or strategic investors
    • Financing is typically done in “Rounds” (A,B,C,D) that gradually dilute founders’ stakes
    • Founders do not try to keep control of company long term - they usually are not creating a family business
  • 12. New Ventures in Silicon Valley
    • Many new ventures in Silicon Valley fail - some never return all of the capital invested
    • Despite this, professional financial investors are willing to invest, and entrepreneurs willing to try (sometimes repeatedly)
    • Professional investing models take a portfolio approach when investing. Their economics often rest on having a few big successes (e.g., Google) amid the many failures
    • Entrepreneurs who are funded bear substantial risk
  • 13. Selected Silicon Valley Demographics
  • 14. Professional Investors
    • Silicon Valley has a well-developed network of professional investors that support a vibrant start-up environment:
    • Angels – high net-worth individuals
    • “ Super Angels” – angels who invest their own money and have raised “micro funds” of additional capital (e.g. $10-30 million)
    • Angel Groups – associations of high net-worth individuals
    • Venture Capitalists – professional managers of institutional money
    • Corporate Venture Capital – company-sponsored venture arms
    • Private Equity – often venture capital, but includes management buyout firms
  • 15. Other Investors
    • Silicon Valley also has other investors:
    • Friends and Family
    • Government Grants – SBIR and STTR grants
    • Bank Debt – Common with equipment purchases
    • Real Estate/Law Firms
    • Suppliers
  • 16. Some Comparisons…
  • 17. Venture Capital in Silicon Valley
  • 18. Entrepreneurship at Stanford and the GSB
  • 19. Venture Capital Firms Near Stanford
  • 20. Stanford University Office of Technology Licensing
    • Disclosures
    • Licenses*
    • Royalty Income
    • Staff
    • Majority of disclosures are never licensed; many disclosures have one license; some disclosures have multiple licenses
    • Source: Stanford OTL
    1970 28 3 $50,000 2 Cumulative 8000 2900 $1.3 B 2009 438 77 $65.1 M 33 Active ~3000 ~1000
  • 21. How Entrepreneurship is Taught at the GSB
    • “ Foundational” Entrepreneurship Electives
      • Formation of New Ventures
      • Managing Growing Enterprises
      • Entrepreneurship and Venture Capital
    • Experiential Electives
      • Evaluating Entrepreneurial Opportunities (business plan class)
      • Design for Extreme Affordability
    • Specialized electives
      • Sales Management
      • Aligning Start-Ups with Their Markets
      • Social Entrepreneurship
      • Information Technology
      • Sports Business Management
      • Entrepreneurship from the Perspective of Women
      • Environmental Innovation, Sustainability and Entrepreneurship
  • 22. GSB Entrepreneurship Offerings for non-MBA Students
    • Summer Institute for Entrepreneurship (http://www.gsb.stanford.edu/sie/)
      • ~70 Masters, PhD, MD and Post-Docs (mostly from Stanford)
      • 4 weeks full-time
      • Certificate program
    • Program in Innovation & Entrepreneurship (http://www.gsb.stanford.edu/prie/)
      • 5 months part-time
      • ½ Stanford graduate students (non-MBA) and ½ Silicon Valley technologists
      • Certificate program
    • Executive education course
  • 23. The Role of the Center for Entrepreneurial Studies
    • Recruit practitioners to teach side-by-side with faculty to bring academic and “real world” perspectives
    • Develop timely and meaningful courses
    • Continual supply of up to date cases in entrepreneurship courses
      • 20-30 cases/year written for our courses
    • Bring case protagonists into the classroom for most case studies
    • Foster a sub-community of alumni entrepreneurs
    • Bring investors and entrepreneurs on campus frequently for co-curricular activities
    • Provide ample opportunities for students and alumni to “test drive” their idea
  • 24. Program Offerings from the CES
    • Students
    • Student/alumni banquet
    • Student advisory sessions
    • Opportunities to pitch
    • BBLs with companies and entrepreneurs
    • Annual Entrepreneurship Conference
    • Entrepreneurial Summer Program
    • E-treks (visits to early stage companies)
    • Women’s Mentoring Program
    • Personalized counseling
    • Brainstorming sessions and small group dinners
    • Structured and informal interaction with students “across the street”
    • Alumni
    • Founders’ Forums and Entrepreneurship Commitment Groups
    • Continuing education for alumni on entrepreneurship
    • Alumni entrepreneur reunions
    • Online community/email groups/discussion boards/Facebook page
    • Personalized counseling
  • 25. Useful Resources
  • 26. Useful Resources - Stanford
    • http://www.gsb.stanford.edu/ces - GSB Center for Entrepreneurial Studies
    • http://otl.stanford.edu – Office of Technology & Licensing
    • http://sen.stanford.edu – Stanford Entrepreneurship Network
    • http://stvp.stanford.edu – Stanford Technology Ventures Program
    • http://ree.stanford.edu – Roundtable on Entrepreneurship Education
    • http://www.gsb.stanford.edu/sie - Summer Institute for Entrepreneurship
    • http://www.gsb.stanford.edu/prie - Program in Innovation and Entrepreneurship
    • http://ecorner.stanford.edu – Entrepreneurial Thought Leaders Seminar
  • 27. Useful Resources – Entrepreneurship Organizations (a select sample)
    • http://www.churchilllclub.com – Churchill Club
    • http://www.svase.org – Silicon Valley Association of Startup Entrepreneurs
    • http://www.sdforum.org – SDForum
    • http://www.astia.org – Astia (women focused)
    • http://www.fweande.org – Forum for Women Entrepreneurs & Executives
    • http://www.springboardenterprises.org – Springboard Enterprises (women focused)
    • http://www.women2.org – Women 2.0 (women focused)
    • http://www.tie.org - The Indus Entrepreneurs (focused on entrepreneurs with roots in the Indus Region)
    • http:///www.orrick.com – Orrick, Herrington & Sutcliffe (law firm) – see Entrepreneurs Toolkit: http://www.orrick.com/practices/corporate/emergingCompanies/startup/index.asp
  • 28. Useful Resources – Incubators (a select sample)
    • http://www.plugandplaytechcenter.com – Plug and Play Tech Center
    • http://www.ycombinator.com – Y Combinator
    • http://www.founderinstitute.com – The Funded Founders’ Institute
    • http://www.techstars.com – TechStars (Boston, Boulder, Seattle)
    • http://ventures.io/ – i/o Ventures
    • http://fbfund.com – fbFund REV (Facebook, Founders Fund, Accel Partners)
  • 29. Q&A