Interprenureship planning and financing the venture


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Interprenureship planning and financing the venture

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  • Interprenureship planning and financing the venture

    2. 2.  The investment firm is called a venture capital firm, and the money that it gives is called venture capital.
    3. 3. Harvest System  Harvest system : harvest system is based on the fundamental elements of any system : Input Process Output . INPUTS PROCESS OUTPUT LEVEL 2. Product/service level Effective product concept Position Harvest Target market value . Level .2: Venture level Well-built venture : e.g.nvt ,debt vs. equity Prepared venture Stakeholder relationships Prepare Practice Present Persist Harvest •Sell oPublic oPrivate •Hold
    4. 4. two lecels 1) The product /service level 2) The venture level
    5. 5.  The product service level : The idea that there is a process can be planned and enacted to make a product concept valuable in a in a specific market is a powerful one.  New combination : Drucker ( 1995) entrepreneurship as an act of innovation that involves endowing existing resources with new wealth-producing capacity.  Two major categories of entrepreneurial discovery exist. 1) Scientific discovery 2) Circumstantial discovery.
    6. 6.  Scientific or circumstantial discovery can occur within five different domains of new combination ( Schumpeter , 1934) 1) The introduction of a new good or an improved good , 2) The introduction of a new methods of production 3) The opening of a new market , 4) The conquest of a new source of supply of new materials or components, 5) The reorganization of any industry . o Product – Market Match : Without a product – market match , an idea or product / service level .  Net Buyer Benefit : its not one that was used often in the business literature prior that to time. It is the concept of net buyer benefit.
    7. 7. Product/Service Level oConcept description oDescription of target market oTechnical assessment oDesign oValue statement oValue creation strategy oProduct positioning oNBB assessment Given this new information , is the market attractive to enter oCan the venture attain sufficient market share ? oDoes this venture have the capability to satisfy these wants and needs ? If Answered not to one b more questions Determine competitive positioning Determine product concept Determine the market •Collect demographics segments •Size •Needs /wants If answered yes to all questions Memory vault Does this meet the needs of the target market ? Will consumers wants this more than their money ( is there sufficient NBB) Is there a sustainable advantage? If answered not be one or more questions If answered yes to all questions •Differentiation / low cost •Pricing strategy Are consumers willing to pay the price /need t hem to pay ? Will consumer s be able to differentiate this offering ? Can the venture complete as the low –cost provider? If answered not to one b more questions If answered yes t o all questions Level 2. Venture level plan / finance
    8. 8. The venture level  Hare have two words explicitly and explicitly: explicitly , recent research suggest key guide lines for the „‟ preparation “ and “presentation” of entrepreneurial business plans and implicitly suggest attention to “practice “ and persistence “.
    9. 9. dimension, as suggested in table 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Expectation Milestones Opportunity Contexted The business model Tem Elaboration Scenario integration Financial link The deal
    10. 10. Expectations: In the deal screening stage , an EBP is expected to communicate that. a) Key success factors and risk can be clearly identified and are understood: b) The venture has a large projected market with good potential market penetration: c) A strategy for commercialization , profitability , and market dominance is present : d) A strong proprietary and competitive position can be established and protected . Milestone : Hindle (1997) Suggests that the writer of an EBP must „‟identify all major plan objectives, primarily as financial target. Opportunity : Because no opportunity lasts forever and because consumer trends and tastes, the competitive landscape , and technological innovation all evolve over time , an initial opportunity inevitable change.
    11. 11.  Context: Four key aspects should be covered by an EBP to adequately describe the context within which the new venture is intended to function ( sahlman, 1997).  First , entrepreneurs should demonstrate how the new venture‟s context helps b hinders their specific proposal.  Second , EBP writers should demonstrate how the venture‟s context will change, describe how those changes,  Third , the EBP should spell out what management can do in the event the context grows unfavorable.  Fourth , The EBP should explain the ways in which the entrepreneurial team can affect context in a positive way.  The Business Model : the business model is brief statement of how an idea actually becomes a business that creates value.  Team : at this point in the preparation of an EBP , the credibility of the venture comes into play , and the first principle of credibility relates to the decision makers--
    12. 12.  Elaboration : The capability to elaborate, to break down individual task in to their subparts , is also critical to new venture credibility.  Scenario integration: Sahlman (1997) suggest that claiming an insuperable lead b a propriety market position is naive.  Financial link: In the presentation of financial in an EBP , the key assumptions related to market size, presentation rates, and timing issues of market context substantiated in the text of the EBP should be linked directly to the financial statements ( hindle, 1997)  The deal: If the main idea behind the planning process is to enact a harvest , then one of the primary purpose of an EBP is naturally to attract an investor , there by linking input and output through the planning /financing process.
    13. 13. Thanks