McGraw-Hill/Irwin

Copyright 2009 The McGraw-Hill Companies, Inc., All Rights

Reserved.

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Part
Two

The Opportunity

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The Opportunity
Screen and Choose opportunities with great care
Venture capital investors fund no more than 1 or 2
percent of the ventures they review
Good opportunities have risks and problems
The perfect deal has yet to be seen
Take steps to eliminate problems early during
opportunity screening

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Chapter

3
The Entrepreneurial
Process

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Entrepreneurship Defined
Entrepreneurshipawayofthinking,
reasoning,andactingthatisopportunity
obsessed,holisticinapproach,and
leadershipbalancedforthepurposeofvalue
creationandcapture.
(Thisdefinitionofentrepreneurshiphasevolvedoverthepastthreedecadesfromresearch
byJeffryA.TimmonsatBabsonCollegeandtheHarvardBusinessSchoolandhas
recentlybeenenhancedbyStephenSpinelli,Jr.formerViceProvostforEntrepreneurship
andGlobalManagementatBabsonCollege,andcurrentPresidentofPhiladelphia
University).
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Entrepreneurship Results
Value:
Creation
Enhancement
Realization
Renewal

For:
Owners
Stakeholders
All Participants

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Entrepreneurial Requirements
Willingness to take risks
Personal
Financial
Calculated

Shift the odds of success

Balancing risks with rewards

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Entrepreneurship is NOT just

Start-Ups Only
It includes companies and organizations
All types
At all stages

Can occur and fail to occur

In old and new firms
Small and large firms
Fast and slow growing firms
Private, not-for-profit, and public sectors
All geographic points
All stages of a nations development
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Classic Entrepreneurship: The

Startup
Rawstartupcompanyaninnovativeideathatdevelops
intoahighgrowthcompany
Qualitiesofastartupcompany
Strongleadershipfromthemainentrepreneur
Complementarytalentsandoutstandingteamworkofteam
members
Skillandingenuitytofindandcontrolresources
Financialbackingtochaseopportunity

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Beyond Startups
Giant firms of the past (IBM, Digital Equipment
Corporation, Sears, AT&T) once thought to be
invincible, have been reduced in size and scope
by waves of entrepreneurial ventures.
Large companies face shrinking payroll while
new ventures add jobs.
New entrepreneurial rivals are changing the
pace of business as usual.

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Metaphors for Entrepreneurship

(Image)
Improvisational
Quick
Clever
Creative
Resourceful
Inventive
Complex compare to music (jazz or symphony
conductor), sports (golf), chess

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Paradoxes of Entrepreneurship (1 of
3)
An opportunity with no or very low potential
can be an extremely big opportunity.
To make money you have to first lose money.
To create and build wealth, one must give up
wealth.
To succeed, one first has to experience failure.

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Paradoxes of Entrepreneurship (2
of 3)
Entrepreneurship requires considerable
consideration, preparation, and planning, yet
is basically an unplannable event.
For creativity and innovativeness to prosper,
strictness and discipline must accompany the
process.
Entrepreneurship requires a bias toward
action and a sense of urgency, but also
demands patience.

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Paradoxes of Entrepreneurship (3
of 3)
The greater the organization, discipline, and
control, the less you will control your
ultimate destiny.
To realize the long-term equity value, you
have to forgo the temptations of short-term
profitability.

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Think Big for Higher Potential

Ventures
Dont think too small
Smaller often means higher failure odds
Getting the odds in your favor
Entrepreneurship should not be a job substitute
Odds for survival, growth, and a higher level of
success, changes when the ventures reaches a
size of 10-30 people with $2-$3 million in
revenues

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The Entrepreneurial Team

Anentrepreneurialleader
Learnsandteachesfaster,better
Dealswithadversity,isresilientandelastic
Exhibitsintegrity,dependability,honesty
Buildsentrepreneurialcultureandorganization

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The Entrepreneurial Team

QualityoftheTeam(1)
Relevantexperienceandtrackrecord
Motivationtoexcel
Commitment,determination,andpersistence
Toleranceofrisk,ambiguity,anduncertainty
Creativity

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The Entrepreneurial Team

QualityoftheTeam(2)
Teamfocusofcontrol
Adaptability
Opportunityobsession
Leadership
Communication

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Sustainability as a Base
Achievingeconomic,environmentalandsocialgoals
Withoutcompromisingthesameopportunityforfuture
generations
Drivenbymanyfactors
Byunderstandingthesefactors,theentrepreneurbuildsa
firmerbasegirdingtheventureforthelongterm

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