...to seek financing through nontraditional bootstrapping methods to launch their ventures. Bootstrap financing refers to a range of creative ways to acquire resources without relying on borrowing money or raising equity from traditional sources (Freear et al., 1995a). The paper examines how successful technology entrepreneurs used bootstrap financing: the founders of Microsoft Corporation, Apple Inc., Dell Inc. and Research in Motion Ltd. The research investigates the elements of bootstrapping as described in Freear et al. (1995a) and in Winborg and Landström (2001), finding that entrepreneurs use bootstrapping extensively during the early stages of growth for both product and business developments. Bootstrapping methods change as the business develops with certain methods used more at the beginning of the life cycle, and different variations used as the business starts to grow. The study also points out that even the most successful technology-based consumer goods businesses relied on bootstrap financing at the early stages of their development. This technique deserves more attention from the scholarly community since it is certain to become more prevalent in the new credit and lending environment. Key words: Bootstrap financing, technology entrepreneurs innovation, Introduction Entrepreneurs have been around for as long as mankind has been involved in business. Identifying new business possibilities and exploiting them in new ventures for economic gain has always been an important...
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...Sources of finance for entrepreneur Entrepreneurs as pioneering play an important role in achieving business success in today twenty-one century. They serve as agents of change provide creative, innovative ideas for business enterprises and help business grow and become profitable. There are two types of entrepreneurs which are business entrepreneur and social entrepreneur. Business entrepreneur is driven by a profit motive while social entrepreneur is driven by a mission to fill the gap left of the market and public sector. This essay will typically focus on business entrepreneur.（Frederick, H.H&D.F.Kurakto.2010）.The most important part for enterprise doing business is financing .Without money or capital which is extremely hard for entrepreneur starting up a business. However there are many sources of financing for entrepreneur. The essay will be illustrated from some sources of finance via an existing company. Sharetea Australia Pty is a company that specialist in food and beverages. The company has four shops located in different district s in Sydney. As a proprietary company which meant the company is owned by an individual that has limited shares, around fifty employees work in the company. Anthony Mu is the manager of the company which has 10 years working experiences. In this essay, it is necessary to discuss how do Anthony Mu raise funds as an entrepreneur for starting his business, and any source of finance that he used to maintain his company. It said that...
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...Excerpts from Angel Investor Study Venture Support Systems Project: Angel Investors MIT Entrepreneurship Center Release 1.1 February 2000 The Venture Support Systems (VSS) Project is managed by a team at MIT and HBS. It was funded by a generous donation from Ronald A. Kurtz (MIT 1954) and David Kurtz (HBS 1992). Other reports from the VSS Project include cases, teaching notes and monographs. This report was prepared by Lucinda Linde (Marlin Capital) and Alok Prasad (Pittiglio, Rabin, Todd & McGrath) under the direction of Kenneth P. Morse and Matthew Utterback of the MIT Sloan School and Howard Stevenson and Michael Roberts, of the Harvard Business School. �2000 MIT Entrepreneurship Center Executive Summary Angel investors are an important and growing source of financing for the start-up and initial growth phases of technology ventures. This study focused on high net worth angel investors with entrepreneurial backgrounds. Many of these angels invest in first time entrepreneurs before the entrepreneurs secure venture capital financing. Besides earning a strong return on their investment, these experienced angels are motivated to “give back” to the community which helped make them successful. Very little published data is available on angel investing and little research has been done on the experienced angel investor. It may be valuable for first time entrepreneurs, venture capitalists, regulators and other members of the venture community to understand, leverage...
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...Bootstrapping Bootstrapping is one of most effective and economical method to ensure companies positive cash flow. Less money has to be borrowed when using methods of bootstrapping, and interest costs are reduced (Gordan, 2015). However, companies need to preserve its capital with a viable business tactic that enables capital to be preserved. New startup companies or companies that have been existence for a certain timeframe; the business owner must understand that access to capital is the key element for business growth and expansion. In the early phases of starting a business; business owners can obtain capital from relatives, friends, or credit cards of their own to launch their businesses. Irrespective of the industry the business chooses to capitalize in, the business needs a location to operation company products and services to deliver together efficient means of operations (Gordan, 2015). Currently in the present economy, businesses are competitive with one another, and to own and operate a business is proving to be costly. Bootstrapping In business, there are direct and indirect expenses that are required on a monthly basis. However, if an entrepreneur wants to be successful, adding staff personnel, materials and increase marketing strategies in order to remain competitive to see continuous growth is essential. However, this might not be probable without a viable capital base (Bulman, 2005). Some business use the means of credit cards to help in financing...
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...MGMT 313 New Venture creation FINAL EXAM CASE ANALYSIS QUESTIONS MALINCHO 1) Why did Kalin decide to start a food import business? Evaluate the way in which Kalin found this opportunity? 2) What are the personal attributes (adjectives) that describe Kalin as an entrepreneur? List as many as possible. 3) Which of these personal attributes would you consider as being in the top 3 personal attributes of Kalin as an entrepreneur? Explain why you choose them as top 3 personal attributes. 4) İs cheese importing a good “opportunity”? How big is the market or in your estimation how much demand would there be for sheep milk white cheese among Bulgarian immigrants in the USA? To estimate the market potential make conservative assumptions. How much of this potential could Kalin capture? 5) İs your estimate of potential, and the portion Kalin can capture, as well as your estimate of Kalin’s gross margin per pound of sheep milk white cheese, result in a big enough opportunity to make this a worthwhile business for Kalin? Based on your conservative assumptions what would Kalin’s potential annual total gross profit be? 6) Would you take this opportunity? Why? Why not? Why would you take a chance with this opportunity? 7) Where dis Kalin find the money to launch his company? 8) Bootstrapping is defined as a verb means “promoting and developing by initiative and effort with little or no assistance”. Bootstrap as an adjective can be defined as something...
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...Difference between angel investor and venture capitalists Financing Options for Entrepreneurial Ventures: 1. Internal Funding a. Founder, Family and Friends (3Fs) b. Bootstrapping : internally generated retained earnings, credit cards, home mortgages, and customer advances c. Business Alliance: forming “cooperative agreements” with another firm to generate revenues and reduce costs 2. External Funding a. Angels: are successful business people who invest their own money. There are over 250 angels groups * Involved in the early stage of entrepreneurial ventures * Invest in technologies or in business in the areas that are known to them * Capital requirement of $50,000 to $250,000 * Sales potential of between $2 million and $20 million within 5 to 10 years * Invest alone or in angel organizations b. Venture Capitalists: are financial intermediaries, they take investors’ capital (not their own) and invest it directly into portfolio companies They utilized to fund the internal growth of companies and their primary goal is to maximize its financial return by exiting investments through sale or IPO. * Funding later stages firms * New emerging and middle-market private companies that will go public or merge within 4 to 7 years * Have $5 million to $200 million in sales with a billion-dollar potential, growing 25% per year, with gross margin 40% to 50% or more ...
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... Global capital markets have been greatly impacted by the current economic climate. This has created significant challenges in startup capital and infusions of capital from Venture Capital funds or other types of angel investment. 2011 was, indeed, a transitional year for small businesses around the world. The primary issue is that it has become clear that credit will remain less available and that many institutions will remain risk-averse. A simple assessment would be that there was a hope that credit would start flowing again and that investment would be less restricted and it has now become clear that this is not a short-term problem. There was a time when a solid business plan was enough, then having a background in startups became desirable, then having the ability to prove one’s concepts became more important. In order to better understand what an entrepreneurial organization, especially a small business, needs to do in this current economic cycle, this research will look at numbers and types of market entrants, initial public offerings, funding opportunities, and ways to enhance profitability. This research will also examine how the fluctuations of various economic cycles have an impact on funding sources. The funding sources of angel investment, venture capital, private equity, and bootstrapping will be considered, leading into an understanding of the perspectives of the various stakeholders in an effort to develop a 360-degree perspective on the issues. Therefore...
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...Midterm Case—Ajay Bam Entrepreneurial Attributes: From an entrepreneurial standpoint Ajay Bam seemed to have had everything going for. He came from a supportive family that encouraged him to be independent and a critical thinker. He had traveled the world and understood how people from different places lived and how in comparison he was very fortunate to have what he had. He was also well educated and was already in a successful career; however, he still wanted more. He was driven and passionate and knew that he wanted to create something new from the ground up and be in business for himself. So he too upon himself not only to go back to school to pursue his MBA in Entrepreneurialism, but to put his current professional career on hold so he go after it at the most respected school in the country for that program. Eager to learn beyond the classroom, Ajay took a four-month international management internship for a startup company in Germany. Here he was given the opportunity to sit on board meetings and started to build a relationship with the COO whom encouraged Ajay to take travel weekends. It was during one of these outings that Ajay saw an opportunity and made a decision to pursue this once he got back to the states. Once back in school Ajay’s opportunistic idea started to take shape during a meeting with fellow MBA student Walter Stock, his future partner, while they were discussing mobile applications and loyalty cards. The conversation started gravitating toward how...
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...Ugbah Prepared for: School of Business & Technology Introduction Entrepreneurship has significantly contributed to society’s climb from underdevelopment to affluence. This has been accomplished through the introduction of new products and technologies to better satisfy consumer wants and raise productivity. An entrepreneur, therefore, is a person who organizes and manages a business, assuming the risk for the sake of potential return (Mariotti & Glackin, 2012). The entrepreneur is an innovator who brings about change through the introduction of new technological processes or products, and thus, through innovation, the entrepreneur is a “deliberate wrecker of equilibrium.” Successful entrepreneurship is associated with a high degree of practical intelligence, creative abilities, and business talent, characteristics which Shavinina (2006) refers to as “entrepreneurial giftedness” (p. 225)--talented individuals who exceptionally succeeded in business by creating new ventures. According to Darling, Gabrielsson, and Seristo (2007), entrepreneurial management leadership is all about “breaking new ground, going beyond the known, and helping to create the future.” Also, entrepreneurial management leadership is about helping people settle into new opportunities that give them joy and hope for the future. The keys to entrepreneurial success are not intelligence, education, lifestyle or background. Rather, entrepreneurial success is determined, in most part, by the entrepreneur’s...
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...Entrepreneurship Entrepreneurship is the act and art of being an entrepreneur or "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods". This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses (referred as Startup Company); however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations.[1] According to Paul Reynolds, entrepreneurship scholar and creator of the Global Entrepreneurship Monitor, "by the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Participating in a new business creation is a common activity among U.S. workers over the course of their careers." [2] And in recent years has been documented by scholars such as David Audretsch to be a major driver of economic growth in both the United States and Western Europe. "As well, entrepreneurship may be defined as the pursuit of opportunity without regard to resources currently controlled...
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...Devry University: Entrepreneurial Finance December 05, 2010 The Entrepreneurial Story of Steve Jobs The Start of Apple Anusree Banerjee Table of Contents Executive summary 3 Pre-foundation partnership 4 Initial bootstrapping 4 Angel investors 4 Initial public offering 5 Success mantra 6 Appendices 8 Venture Capitalists tell their story: Arthur Rock on Steve Jobs 8 Preliminary confidential offering memorandum 9 Bibliography 10 Executive summary This report highlights the start of the entrepreneurial journey of Steve Jobs – the founder of Apple. The Apple journey started off as a partnership. Steve Jobs and Steve Wozniak had been friends for some time, having met in 1971, when their mutual friend, Bill Fernandez, introduced 21-year-old Wozniak to 16-year-old Jobs. Jobs managed to interest Wozniak in assembling a machine and selling it. They bootstrapped for the first product – Apple I. Mike Markkula was the first angel investor who showed belief in the product and the team. Markkula had made his fortune as a marketing manager at Fairchild Semiconductor and Intel, retiring at age 32. In 1977, Steve Jobs met with Markkula and convinced him that personal computers were an exciting opportunity. Markkula invested $250,000 in Apple for a one-third stake in the company and served as president from 1981-83. With Mike’s guidance and funding Apple ceased to be a partnership and was incorporated on April 1, 1976. Apple investors had a traditional exit...
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...Related Issues * Founder of founders experience in the industry/ are of high potential and with experience. All products are specially hand made and designed. The experience is due to the many years of this type of work as a hobby that had eventually seen its potential as a growing business. * Found or founder’s skills as they relate to the proposed new ventures product or service/ is of high potential, and the founder is at a highly skilled level. Due to the amount experience there is a great level of skill that is put into the creation of these products. * Extent of the founders professional and social networks in the relevant industry/ is of moderate potential because of the only form of networking is Facebook, with there still being room for potential growth. * Extent to which the proposed new venture meets the founder or founders personal goals and aspirations/ is of high potential and strong. Founder is focused on goals set by herself and measures goals with each product being made on time or in time for sale. * Likelihood that a team can put together to launch and grow the new venture/ has high potential and is very likely depending on the desire to want to grow the business or consumer demand for products. With that it can become very likely to put a team together to get products out more efficiently. Part 5: Financial Issues * Initial Capital Investment/ is of high potential and requires a low intimal capital investment. Doesn’t...
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...Business Plan Writing for Small Businesses and Entrepreneurs First Screen DeVry University, SBE 440 Alex Smith Professor: Florinel-Frank Cotae July, 10, 2011 First Screen From “Preparing Effective Business Plans” by Bruce R. Barringer McDonald’s Restaurant Part 1: Strength of Business Idea For each item, circle the most appropriate answer and make note of the (-1), (0), or (+1) score. | | Low Potential (-1) | Moderate Potential (0) | High Potential (+1) | 1. | Extent to which the idea: * Takes advantage of an environmental trend * Solves a problem * Addresses an unfilled gap in the marketplace | Weak | Moderate | Strong | 2. | Timeliness of entry to market | Not timely | Moderately timely | Very timely | 3. | Extent to which the idea “adds value” for its buyer or end user | Low | Medium | High | 4. | Extent to which the customer is satisfied by competing products that are already available | Very satisfied | Moderately satisfied | Not very satisfied or ambivalent | 5. | Degree to which the idea requires customers to change their basic practices or behaviors | Substantial changes required | Moderate changes required | Small to no changes required | Part 2: Industry-Related Issues | | Low Potential (-1) | Moderate Potential (0) | High Potential (+1) | 1. | Number of competitors | Many | Few | None | 2. | Stage of industry life cycle | Maturity phase or decline phase | Growth phase | Emergence phase | 3. | Growth rate...
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...their best work by keeping them intellectually engaged and by removing distractions. Stimulate their minds. * Make managers responsible for sparking creativity and eliminate arbitrary distinctions between "suits" and "creatives." * Engage customers as creative partners so you can deliver superior products. * Stimulate their minds (conferences, communication between staff, etc.). * Minimize hassles both on and off the job (gyms, swimming pools, hospitals and more on company’s campus). Keeping its customers satisfied * Listen and analyze feedbacks, advice etc., create conferences for customers, collaboration with a customer to invent new solutions, build long-term relationships, etc. Subscription-plan business model. * Tap into the creative talents of your customers instead of looking just to your workers for new ideas. * Nurture long-term relationships with users and employees alike. Creativity is the raw material that goes into innovation. Reading 2: Recognizing Opportunities and Generating Ideas BENCHPREP: be familiar with what the company does; how it was launched; the characteristics of the business opportunity when the BENCHPREP was launched * Company provides cross-platform apps to help students prepare for standardized tests (GMAT, SAT, MCAT, etc.). * Launched at the perfect time (not too early-not to late) when IPhone was introduced and apps were just gaining popularity. Done by two friends (ASHISH RANGNEKAR AND UJIWAL CUPTA). * Timing...
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...J.B.M. Vol. 17 No. 1 Journal of Business and Management Editors Cristina M. Giannantonio, Ph.D. Amy E. Hurley-Hanson, Ph.D. Published by Chapman University’s Argyros School of Business and Economics Sponsored by the Western Decision Sciences Institute WDSI WDSI WESTERN DECISION SCIENCES INSTITUTE The Western Decision Sciences Institute is a regional division of the Decision Sciences Institute. WDSI serves its interdisciplinary academic and business members primarily through the organization of an annual conference and the publication of the Journal of Business and Management. The conference and journal allow academicians and business professionals from all over the world to share information and research with respect to all aspects of education, business, and organizational decisions. PRESIDENT Mahyar Amouzegar California State University, Long Beach PRESIDENT-ELECT Nafisseh Heiat Montana State University-Billings PROGRAM CHAIR/VICE PRESIDENT FOR PROGRAMS/PROCEEDINGS EDITOR John Davies Victoria University of Wellington VICE PRESIDENT FOR PROGRAMS-ELECT Sheldon R. Smith Utah Valley State College VICE PRESIDENT FOR MEMBER SERVICES David Yen Miami University of Ohio SECRETARY/TREASURER Richard L. Jenson Utah State University DIRECTOR OF INFORMATION SYSTEMS Abbas Heiat Montana State University - Billings IMMEDIATE PAST-PRESIDENT G. Keong Leong University of Nevada, Las Vegas REGIONAL VICE PRESIDENT Vijay Kannan Utah State University Journal of Business...
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