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Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
Business Development and Entrepreneurship Basics
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Business Development and Entrepreneurship Basics

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Presented by: Tony Redpath …

Presented by: Tony Redpath
Vice President, Partner Programs
MaRS Discovery District

Part of the Ontario Post Doctoral Fellowship Networking Event.

7 October 2008

Published in: Business, Technology
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  • Se me hace una herramiento super original, porque puedes encontrar información de un tema y te lo explican de una manera sencilla para que las personas podamos entender. Sería bueno tener más en cuenta este tipo de páginas que sirven de apoyo de investigación y conociento, pues pueden mejorar la perspectiva de algún tema. Abigail Hernández 1160213
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  • 1. ` Business Development and Entrepreneurship Basics Presented by: Tony Redpath Vice President, Partner Programs MaRS Discovery District 7 October 2008
  • 2. Four basic questions: <ul><li>What does my business look like ? </li></ul><ul><li>What resources do I need? </li></ul><ul><li>How do I fit into the rest of the world? </li></ul><ul><li>What is my business model? </li></ul>
  • 3. Technology Commercialization KNOWLEDGE Universities / Hospitals Government Labs PATENTS (Novel, Useful, Non-Obvious) Marketplace Concept R & D Project Lab Prototype Engineering Project Engineering Prototype Production Sales Company I Concept R & D Project Lab Prototype Engineering Project Engineering Prototype Production Sales Company II
  • 4. Business types - Consulting <ul><li>You provide advice, based on your specialized knowledge </li></ul>
  • 5. Technology Commercialization KNOWLEDGE Universities / Hospitals Government Labs PATENTS (Novel, Useful, Non-Obvious) Marketplace Concept R & D Project Lab Prototype Engineering Project Engineering Prototype Production Sales Company I Concept R & D Project Lab Prototype Engineering Project Engineering Prototype Production Sales Company II
  • 6. Consulting …. Cont’d <ul><li>Can start as a one-person business </li></ul><ul><li>May have a technical, management, or marketing focus </li></ul><ul><li>Often stay small, but consulting engineering firms can be large (e.g Hatch Associates) </li></ul><ul><li>Often operate via a virtual network of consultants </li></ul><ul><li>Need liability insurance </li></ul><ul><li>Capital costs low </li></ul>
  • 7. Business types - Consulting <ul><li>Q: How much should I charge? </li></ul><ul><li>* A: What is the client’s alternative cost? </li></ul>
  • 8. Business types: Service <ul><li>You provide a service to existing businesses </li></ul>
  • 9. Technology Commercialization KNOWLEDGE Universities / Hospitals Government Labs PATENTS (Novel, Useful, Non-Obvious) Marketplace Concept R & D Project Lab Prototype Engineering Project Engineering Prototype Production Sales Company I Concept R & D Project Lab Prototype Engineering Project Engineering Prototype Production Sales Company II
  • 10. Service business…. Cont’d <ul><li>Technical service businesses often provide analytical services </li></ul><ul><li>May provide custom clinical trials </li></ul><ul><li>Classic IT service providers </li></ul><ul><li>Can be very small or very large </li></ul><ul><li>Capital costs can be quite high </li></ul>
  • 11. Business types: Product <ul><li>You have real article ( pharmaceutical compound, medical device, consumer product….) that you wish to take to the market </li></ul>
  • 12. Technology Commercialization KNOWLEDGE Universities / Hospitals Government Labs PATENTS (Novel, Useful, Non-Obvious) Marketplace Concept R & D Project Lab Prototype Engineering Project Engineering Prototype Production Sales Company I Concept R & D Project Lab Prototype Engineering Project Engineering Prototype Production Sales Company II
  • 13. Product …. Cont’d <ul><li>Examples range from cottage industry craft producers up to General Motors </li></ul><ul><li>Capital needs vary widely, but there will usually be a need for at least working capital </li></ul><ul><li>“ Mercedes in the driveway” vs. high growth </li></ul>
  • 14. Types of Financing <ul><li>Debt </li></ul><ul><ul><li>You borrow from someone, using some asset as security, an amount that will have to be repaid </li></ul></ul><ul><li>Equity </li></ul><ul><ul><li>You sell a piece of your venture to someone in exchange for an investment in the venture </li></ul></ul><ul><li>Bootstrap </li></ul><ul><ul><li>You self-fund by using the profits of your business to grow the business </li></ul></ul>
  • 15. The Lemonade Stand Example <ul><li>Assume you’re 8 years old and you need $20 to set up a lemonade stand </li></ul><ul><li>Revenues Debt 50:50 Equity </li></ul><ul><li>Rain $10 lender loses $10 partner loses $15 </li></ul><ul><li>entrepreneur gets $0 entrepreneur gets $5 </li></ul><ul><li>Cloud $30 lender is even partner loses $5 </li></ul><ul><li>entrepreneur gets $10 entrepreneur gets $15 </li></ul><ul><li>Sun $50 lender is even partner makes $5 </li></ul><ul><li>entrepreneur gets $30 entrepreneur gets $25 </li></ul>
  • 16. Sources of Debt Financing <ul><li>You – your mortgage </li></ul><ul><li>You – your credit cards </li></ul><ul><li>The 3 F’s – Friends, Family and Fools </li></ul><ul><li>Banks </li></ul><ul><ul><li>Can lend to you (e.g. line of credit) or to your venture </li></ul></ul><ul><ul><li>Lend against assets or receivables </li></ul></ul><ul><li>Venture Debt funds </li></ul>
  • 17. Sources of Equity Financing <ul><li>The 3F’s again – Friends, Family and Fools </li></ul><ul><li>Angels (aka high net worth individuals) </li></ul><ul><ul><li>Generally like to invest in areas that they have worked in or are comfortable with </li></ul></ul><ul><ul><li>Can add valuable hands-on experience </li></ul></ul><ul><ul><li>http://www.angelinvestor.ca/ </li></ul></ul><ul><ul><li>http://www.mapleleafangels.com/186103_186104.html </li></ul></ul><ul><li>Venture Capital Funds </li></ul><ul><ul><li>Different funds invest at different stages in the growth of a company </li></ul></ul><ul><ul><li>http://www.cvca.ca/ </li></ul></ul>
  • 18. Special Financing Sources <ul><li>Proof of Principle / Idea to Innovation </li></ul><ul><ul><li>http://www.researchnet-recherchenet.ca/rnr16/viewOpportunityDetails.do?prog=205&view=search&terms=proof+of+principle&org=CIHR&type=AND&resultCount=25NSERC Idea to Innovation (I2I) Program </li></ul></ul><ul><ul><li>http://www.nserc.ca/professors_e.asp?nav=profnav&lbi=b4 </li></ul></ul><ul><li>NRC - IRAP </li></ul><ul><ul><li>http://irap-pari.nrc-cnrc.gc.ca/main_e.html </li></ul></ul>
  • 19. The Financing Life Cycle Risk Sales Investment Grants Venture Capital Public Markets Seed Funds Angels Concept Start-up Growth Expansion
  • 20. The Financing Life Cycle Risk Sales Investment Grants Venture Capital Public Markets Seed Funds Angels Concept Start-up Growth Expansion
  • 21. The Financing Life Cycle Risk Sales Investment: Self-finance Grants Concept Start-up Growth Expansion
  • 22. What do Financing Sources Look For ? <ul><li>Stage of Development </li></ul><ul><li>Impact & Application </li></ul><ul><li>Sustainable Advantage </li></ul>Technology Risk
  • 23. Technology Risks <ul><li>Stage of Development (concept  proof of concept  prototype of product) </li></ul><ul><li>Product development path (costs and “risks”) </li></ul><ul><li>Technology impact </li></ul><ul><li>Scope of application </li></ul><ul><li>Competitive technologies </li></ul><ul><li>Disruptive technologies </li></ul><ul><li>Reliance on infrastructure </li></ul><ul><li>Ease of scale-up, technology transfer, copy </li></ul><ul><li>Manufacturability and costs </li></ul>
  • 24. Due Diligence and Valuation Criteria IP Risk Market Risk <ul><li>Stage of Development </li></ul><ul><li>Impact & Application </li></ul><ul><li>Sustainable Advantage </li></ul><ul><li>Reputation / Leadership </li></ul><ul><li>Commitment </li></ul><ul><li>Market Knowledge </li></ul><ul><li>Experience </li></ul><ul><li>Size and Growth </li></ul><ul><li>Dynamics </li></ul><ul><li>Competition </li></ul><ul><li>Customers </li></ul><ul><li>Distribution Channels </li></ul><ul><li>Nature and Scope </li></ul><ul><li>IP Form </li></ul><ul><li>Ownership </li></ul><ul><li>Enforceability </li></ul><ul><li>IP Building </li></ul><ul><li>Freedom to Operate </li></ul>Technology Risk Execution Risk
  • 25. Intellectual Property Risks <ul><li>Nature of the invention </li></ul><ul><li>Scope of the invention </li></ul><ul><li>IP form: Patent, know-how, software </li></ul><ul><li>Ownership of IP - Lingering rights of funding agencies or students </li></ul><ul><li>Level of IP protection – NA, worldwide </li></ul><ul><li>Competitive research activity, patent activity, availability of Licensees </li></ul><ul><li>Prior disclosure - publications or conferences </li></ul><ul><li>Enforceability </li></ul>
  • 26. Market Risks <ul><li>Market size, dynamics and growth potential </li></ul><ul><li>Route to market, access, scalability </li></ul><ul><li>USPs of the products or services </li></ul><ul><li>Nature of the customers </li></ul><ul><li>Lead customers </li></ul><ul><li>Market or industry drivers </li></ul><ul><li>Competitive landscape and profit margins </li></ul><ul><li>Regulatory barriers or opportunities </li></ul>
  • 27. Execution Risk <ul><li>Management vision for the company </li></ul><ul><li>Management leadership ability </li></ul><ul><li>Commitment and drive </li></ul><ul><li>Recognized technology expertise </li></ul><ul><li>Knowledge of the market, networks </li></ul><ul><li>Skills required to move the technology through all stages of development and product launch </li></ul><ul><li>Reputation in the marketplace </li></ul>
  • 28. Building a Business Model <ul><li>Where do you fit in the ecosystem? </li></ul><ul><li>What do you enable (not just what do you do)? </li></ul><ul><li>How much money is on the table? </li></ul><ul><li>THINK BIG! </li></ul>

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