1. Slide 1
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2. `
Business Development and
Entrepreneurship Basics
Presented by:
Tony Redpath & Allyson Hewitt
Vice President, Partner Programs
Director, Social Entrepreneurship
MaRS Discovery District
6 October 2010
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3. Slide 3
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4. Start with the Basics
1) Why do I want to start this business?
• What is my motivation?
• Do I want to make money and make a difference?
2) What resources do I need?
• Basement vs. Corporate Office vs. Shared Spaces
3) How do I fit into the rest of the world?
• Is my service/product unique?
4) What is my business model?
• For profit, non profit, hybrid model
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5. The Organizational Spectrum
Non-profit
that
generates
revenue Social Traditional
Traditional Purpose Corporation
Charity Social Business
Enterprise Corporate
Social
Responsibility
(CSR)
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6. Types of organizations: CONSULTING
 Key Characteristics:
 Multiple Participants, Diverse focus, Size
 Examples
– Hatch Associates
– Aperio
 Benefits & Risks of Model
 Low Capital Costs & Minimal Input
 Liability Insurance; lack of support
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7. Types of organizations: SERVICES
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8. Types of organizations: SERVICES
 Key Characteristics:
 Specialty business serving existing businesses
 Examples
 Benefits & Risks of Model
 On-line software as a service
 Capital Costs can be high: labs services: servers
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9. Social Venture: SERVICES
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10. Types of organizations: PRODUCTS
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11. Types of organizations: PRODUCTS
 Products
 Key Characteristics:
 Tangible offering ( pharmaceutical compound, medical
device, consumer product
 Examples
 Benefits & Risks of Model
 High development costs; market traction
 Production costs high: outsource?
 Potential for huge scale
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12. Social Venture: PRODUCTS
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13. Show me the Money….
 Forms of Financing
 Debt - borrow from someone, using an asset as
security; rate & time period to be negotiated
 Equity - sell a piece of your venture to someone in
exchange for an investment in the venture
 Bootstrap - self-fund and reinvest all profits for
growth
 Grants – foundations/government funding
 Hybrid Models – important to both enterprise types
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14. The Lemonade Stand Example
Assume you’re 8 years old and you need
$20 to set up a lemonade stand
Revenues Debt 50:50 Equity
Rain $10 lender loses $10 partner loses $15
entrepreneur gets $0 entrepreneur gets $5
Cloud $30 lender is even partner loses $5
entrepreneur gets $10 entrepreneur gets $15
Sun $50 lender is even partner makes $5
entrepreneur gets $30 entrepreneur gets $25
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15. The Lemonade Stand Example II
Assume you’re 8 years old and you need
$20 to set up a lemonade stand
Revenues Debt 50:50 Equity
Rain $10 lender loses $10 partner loses $15
entrepreneur gets $0 entrepreneur gets $5
Cloud $30 lender is even partner loses $5
entrepreneur gets $10 entrepreneur gets $15
Sun $50 lender is even partner makes $5
entrepreneur gets $30 entrepreneur gets $25
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16. Where can I get debt financing?
 YOU
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17. Sources of Equity Financing
 The 3F’s again – Friends, Family and Fools
 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
 http://www.angelinvestor.ca/
 http://www.mapleleafangels.com/186103_186104.html
 Venture Capital Funds
 Different funds invest at different stages in the growth
of a company
 http://www.cvca.ca/ Slide 17
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18. Special Financing Sources
 Proof of Principle / Idea to Innovation
 www.ResearchNet.com
 www.nserc-crsng.gc.ca/index_eng.asp
 NRC - IRAP
 http://irap-pari.nrc-cnrc.gc.ca/main_e.html
 Foundations:
 Trillium Fund - www. TrilliumFoundation.org
 Gates Foundation –
www.gatesfoundation.org Slide 18
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19. The Financing Life Cycle
Public Markets
Venture Capital
Seed Funds
Angels
Grants
Risk
Concept Start-up Growth Expansion
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20. The Financing Life Cycle
Public Markets
Venture Capital
Seed Funds
Angels
Grants
Risk
Concept Start-up Growth Expansion
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21. The Financing Life Cycle
Risk
Grants
Concept Start-up Growth Expansion
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22. How do I secure financing/support?
Investors/backers
are concerned about
risk associated with
any start-up
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23. What are the Risks?
 Technology Risks
 Stage of Development (concept  proof of concept 
prototype of product)
 Product development path (costs and “risks”)
 Competitive technologies
 IP Risks
 Nature of the invention
 Scope of the invention
 IP form: Patent, know-how, software
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24. Risks Continued
 Market Risks
 Market size, dynamics and growth potential
 Route to market, access, scalability
 USPs of the products or services
 Execution Risk
 Knowledge of the market, networks
 Skills required to move the enterprise through all stages
of development
 Reputation in the marketplace
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25. Risks for the Social Venture
 Mission Drift
 Balancing a Social and Financial Bottom Line
 Execution Risk
 Knowledge of the market, networks
 Skills required to move the enterprise through all stages
of development
 Reputation in the marketplace
 Lack of Awareness
 This is an emergent area and it is tough to get people to
get it Slide 25
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