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 ( trip to Silicon Valley

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Center for entrepreneurial studies nasf 2-12-2010

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