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Chapter
Summary
Entrepreneurs respond to attractive opportunities by forming new ventures. In this chapter, we consider the various organizational and legal forms that entrepreneurs employ to achieve their objectives using a five-step process for establishing a new venture. We also describe the tasks and benefits accrued by a socially responsible firm. Then, we consider the benefits of a cluster of interconnected companies operating in a geographic region.Building a new business venture is described as a process that can be learned and mastered by talented entrepreneurs. Finally, we describe the benefits and limitations of creating and writing a business plan, a significant and challenging task for most entrepreneurs.
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Vermeer
Technologies (A): A Company Is Born
Charles Ferguson has just heard from a venture capital (VC)
consortium that it is willing to finance Vermeer Technologies,
a company he has co-founded for developing Internet software.
The funds are sorely needed, but the VCs have imposed some
onerous conditions, including a request that Vermeer's first
CEO be an outsider. Teaching Purpose: Identifies several tasks
that need to be performed before a business idea can be realized
as a business entity. Highlights the process of early product
definition and the key role of employee selection in building
an organization.
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PacNet
Presents a full-scale business plan for the launch of an Internet
service provider (ISP) for the Pacific Rim. Set in 1993, the
case has a short introduction, followed by the business plan
for PacNet. Dr. Kevin Wong, PacNet's founder, plans to take
advantage of the exponential industry growth by becoming the
dominant provider of Internet services to Pacific Rim businesses.
PacNet's growth strategy depends on acquisition and consolidation
of ISPs and the development of proprietary software through
partnerships. Teaching Purpose: To consider a business proposal
and evaluate the business opportunity, management team, financing
strategy, and risks.
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New
Schools Venture Fund
A new approach to philanthropy has emerged in the last two
years led by venture capitalists and the "new wealth." They are applying the same accountability criteria from results
as they would their investment portfolio. Teaching Purpose:
To analyze the risks and rewards of applying the venture capital
model to philanthropy. |
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Strategic
Planning at NFTE
Details the four-month strategic planning process of the National
Foundation for Teaching Entrepreneurship (NFTE), a successful
nonprofit poised on the verge of explosive growth. The founders
of NFTE brought it from a small program run out of their apartment
to a $7 million enterprise operating in 43 states and 14 countries.
Yet, it is a loose organization run by mission-driven entrepreneurs
who manage to succeed by grit, charisma, and inspiring others.
For NFTE to go to the next step of its development, it must
radically change the organization and introduce both structure
and discipline. Teaching Purpose:
To prepare students to think about the challenges of strategic
growth planning in nonprofit organizations. |
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Jeff
Hawkins: Genesis of Palm Computing
Jeff Hawkins talks about his life, his education and work
experience. He started his career at Intel for 3 years and
then moved to a start-up that he did not start. While working
at the latter he created his first product - first pen-based
computer. He soon realised that all personal computing ought
to be smaller and simpler. With this thought he started on
the path to try and accelerate this shift - and that was the
genesis of Palm computing. |
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Vinod
Khosla: Social Entrepreneurship
In Kleiner Perkins perspective, the traditional model of giving
is broken. Social entrepreneurship is very important and the
way to leverage dollars--there aren't enough dollars in the
world to solve the world's problems,from a giving point of
view. But if you apply and multiply, there are, in fact, solutions
to some of these problems. Examples of the Gramine Bank, Aprotech. |
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How
to Write a Great Business Plan
A great business plan is one that focuses on a series of questions
which relate to the four critical factors critical to the
succes of every new venture: the people, the opportunity,
the context, and the possibilities for both risk and reward.
This is a condensed version of Sahlman's longer article in
book 'The Entrepreneurial Venture' |
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