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Business Development and
Entrepreneurship Basics
Presented by:
Tony Redpath & Allyson Hewitt
Vice President, Partner Programs
Director, Social Entrepreneurship
MaRS Discovery District
7 October 2008
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Start with the Basics
1) Why do I want to start this business?
What is my motivation?
2) What resources do I need?
Basement vs. Corporate Office
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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The Organizational Spectrum
Non Corporate
-profit with Socially Social
Traditional Social Traditional
Charity Income
Activities Responsible Responsibility Corporation
Enterprise Business
(CSR)
Mission Motive Profit-Making Motive
Stakeholder Accountability Shareholder Accountability
Income invested in Profits redistributed
programs or overhead to shareholders
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What are the types of organizations?
…CONSULTING
 Key Characteristics:
 Multiple Participants, Diverse focus, Size
 Examples
– Hatch Associates
 Benefits & Risks of Model
 Low Capital Costs & Minimal Input
 Liability Insurance; lack of support Slide 6
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Consulting for Social Enterprises
 Social Enterprises
 Key Characteristics:
 Focused on leveraging core asset (tangible, intangible)
to provide access to market, advice
 Examples
– Sustainability Office @ U of Toronto
– Aperio
 Benefits & Risks of Model
 Less Reliance on traditional funding
 Mission Drift ( Profit and Mission alignment)
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What are the types of organizations?
… SERVICES
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What are the 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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Service Models for Social
Enterprises
 Key Characteristics:
 Market Intermediary Role to serve target population
 Examples
 Benefits & Risks of Model
 Potential to Scale
 Quality Control
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What are the types of organizations?
…PRODUCTS
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What are the 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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What are the types of organizations?
…PRODUCTS
 Products
 Key Characteristics:
 Sell a particular product that benefits a disadvantaged
group and/or promotes a more ethical form of existing
product
 Examples: Vision Spring &
 Benefits & Risks of Model
 Competitive Landscape ( pro v. con)
 Potential for huge scale
 Production costs can be high
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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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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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Where can I get debt financing?
 YOU
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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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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 – Slide 18
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www.gatesfoundation.org

The Financing Life Cycle
Public Markets
Venture Capital
Seed Funds
Angels
Grants
Risk
Concept Start-up Growth Expansion
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The Financing Life Cycle
Public Markets
Venture Capital
Seed Funds
Angels
Grants
Risk
Concept Start-up Growth Expansion
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The Financing Life Cycle
Risk
Grants
Concept Start-up Growth Expansion
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How do I secure financing/support?
Investors/Backers
are concerned
about Risk
associated with any
start-up
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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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Risks…..
 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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Risks for the Social Enterprise
 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
 General Skepticism in the Global Marketplace
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