SlideShare a Scribd company logo
Opportunity
Assessment in
Entrepreneurship
The Challenge of New-
Venture Start-Ups
• Starting Phase – legal entity, team,
financial support, facilities and equipment
and need to devote full time
• Survival Phase – managerial factors, risk of
new products or services, narrow markets
and scarce resources
• Growth Phase – cash management, personnel
etc.
Pitfalls in Selecting New
Ventures
• Lack of objective evaluation
• No real insight into the
market
• Inadequate understanding
of technical requirements
• Poor financial
understanding
• Lack of venture uniqueness
• Ignorance of legal issues
Critical Factors for New-
Venture Development
• Uniqueness
• Investment
• Growth of sales
• Product / Service
availability E.g. Tata Trucks
migration to Euro II
• Customer availability E.g. HD
tele/channels
Why New Ventures
Fail
Product / Market Problems
1.Poor timing
2.Product design problems
3.Inappropriate distribution
strategy
4.Unclear business definition
(what is the exact business)
5.Over reliance on one
customer
Why New Ventures
Fail
Financial Problems
1.Initial undercapitalization
2.Assuming debt too early
3.Venture capital
relationship problems
Why New Ventures
Fail
Management Problems
1.Nepotism in hiring
2.Focusing on promoters
weakness than strength
3.Incompetent support
professionals
4.Inflated owner ego
5.Deception
6.Verbal agreements

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Bbm EDP

  • 2. The Challenge of New- Venture Start-Ups • Starting Phase – legal entity, team, financial support, facilities and equipment and need to devote full time • Survival Phase – managerial factors, risk of new products or services, narrow markets and scarce resources • Growth Phase – cash management, personnel etc.
  • 3. Pitfalls in Selecting New Ventures • Lack of objective evaluation • No real insight into the market • Inadequate understanding of technical requirements • Poor financial understanding • Lack of venture uniqueness • Ignorance of legal issues
  • 4. Critical Factors for New- Venture Development • Uniqueness • Investment • Growth of sales • Product / Service availability E.g. Tata Trucks migration to Euro II • Customer availability E.g. HD tele/channels
  • 5. Why New Ventures Fail Product / Market Problems 1.Poor timing 2.Product design problems 3.Inappropriate distribution strategy 4.Unclear business definition (what is the exact business) 5.Over reliance on one customer
  • 6. Why New Ventures Fail Financial Problems 1.Initial undercapitalization 2.Assuming debt too early 3.Venture capital relationship problems
  • 7. Why New Ventures Fail Management Problems 1.Nepotism in hiring 2.Focusing on promoters weakness than strength 3.Incompetent support professionals 4.Inflated owner ego 5.Deception 6.Verbal agreements