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Relevant
Texbook Chapters
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Discussion
Questions
- What are the primary reasons and benefits to create a business plan? What are the most important sections? Why? Choose and evaluate one of the two sample business plans in Appendix A of Technology Ventures, depending on your personal preference for either information technology or life science technology. Be prepared to share your opinion on each plan’s strengths and weaknesses.
- In your opinion, what is the most important risk to reduce in a startup? Technology, market, team, or financial. Why?
- In start-ups, what are the key actions that a founder or CEO must take regarding human resources?
- How do high tech entrepreneurs finance their ventures? What do venture capitalists do? What is the structure of a typical venture capital firm? How does a typical firm operate?
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Slidedeck:
ABC's of Venture Finance and Teams
Professor Tom Byers' slides on venture finance and teams. |
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Teaching
Note: Valuation of High Technology Ventures
A short teaching note on the art of valuing companies. The
main purpose of valuation analysis is to identify and understand
critical assumptions affecting value, develop realistic ranges
of value based on these assumptions, and understand the way
in which the value of the business is shared to satisfy all
parties involved. |
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Related
Case Study: Visio Corporation, A Visual Adventure
The goal of Jeremy Jaech and Ted Johnson was to make a Windows-based
drawing program that allowed seamless integration of business
and technical graphics with popular business-communications
programs, such as spreadsheets and word processors. Now they
need a new round of funding. |
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Heidi
Roizen: Bootstrapping - Still a great way to raise money
Roizen talks about the importance of bootstrapping, and maintaining
control of the company in the early stages. Not only do entrepreneurs
have to work for a living but they also have to make the money
raised last for a longer time. When capital became easily
available people stopped making the money the old fashion
way, by working. If you create profit, shareholder value will
definately follow. If you make profits you don't need other
people to invest in your company. This is a great advantage.
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Heidi
Roizen: Raising venture capital today
Have venture capital, but jave it at the right
time and use it judiciously. Roizen talks about the Barbell
syndrom - you can raise the first and the last round but not
the rounds in between. It is very difficult to raise the middel
rounds and therefore treat the money like the gold that it
is. |
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Heidi
Roizen: Common mistake - Treating VC money as your own
Roizen thinks that one of the biggest mistakes
that companies made in the hayday is considering that VC money
is their own. She talks about how she dealt with the money
she raised. Entrepreneurs forget tat they have to pay back.
Terms are more important than valuation. If there is any value
that gets created as a result of the entrepreneurs sweat and
VC money, then the VC's get the money back first. |
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Jeff
Hawkins: Company Culture
Hawkins believes that you have to be conscious and methodological
about your company culture. The culture starts at the top
and permeates to the bottom. The culture at palm is a product
culture - He quotes: We are there because we were trying to
do good products. You should also communicate the culture
to new hires, employees and customers alike. High integrity
is also an important component of the Palm culture. This integrity
is not just internal, but integrity with vendors, suppliers
and customers. A lot of companies keep secrets, but the transparency
has been very good for Palm. A good, solid culture can help
a company go through the hard times. |
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Kleiner
Perkins Caufield and Byers
One of the cornerstone venture capital firms in Silicon Valley,
KPCB has invested in and grown idozens of market-defining
household names, including Amazon, Google, Sun, Genetech,
Compaq and America Online. It also fosters a unique network
(Keiretsu) between all its portfolio companies to leverage
symbiotic potential. |
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Sequoia
Capital
One of the cornerstone venture capital firms in Silicon Valley,
Sequoia invests in early stage companies in the west and also
nationwide and in Israel in later stage companies. Portfolio
companies include Yahoo!, Google, PayPal, Cisco and Electronic
Arts. |
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PriceWaterhouseCooper
MoneyTree
The MoneyTree Survey is a quarterly study of venture capital
investment activity in the United States. It is a definitive
source of information on emerging companies that receive financing
and the VC firms that provided it. |
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