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BA 560
Venture Management
Fall Term 2005
Professor: Thomas Dowling
(dowling@bus.oregonstate.edu)
Office: Bexell 224C
Hours: Tuesday: 3:00 – 4:00 & 9:00 pm to 9:30 pm
Friday: Scheduled IBP Team Meetings 8:00 – 5:00
And by appointment
Required Reading
& Cases:
Items
1 - 4 are available at the OSU Bookstore:
1) New Venture Creation – Entrepreneurship for the 21st Century
6TH Edition – Jeffry A. Timmons
Irwin McGraw-Hill
2) Annual Editions – Entrepreneurship 05/06
5th Edition - McGraw-Hill/Dushkin
3) Course
4) The E-Myth Revisited – Why Most Small Business Don’t Work and What to
Do About It
2nd (2001) Edition – Michael E. Gerber,
Harper Business
5) Wall Street Journal Subscription – Sign up form
to be passed around in class.
(Student
subscription provides both print & on-line access.
6.) Reading
materials handed out in class by the instructor
The Venture Management course focuses on the concepts, skills, know-how, information, attitudes and alternatives that are relevant for start-up and early stage entrepreneurs and entrepreneurial managers in larger firms. This is a critical course not only for its importance to your career, but in the OSU MBA program. This course anchors the BA 568 Integrative Business Project (IBP).
The course is based on two basic objectives:
1.) To provide the learning
forum for future entrepreneurs (and those of you who have already started new
business ventures) to acquire the requisite skills to make better decisions
thereby increasing the odds of new venture success. My expectation is that each student will
enhance his/her capacity to envision, anticipate, and orchestrate the key
issues and factors associated with a business start-up.
2.) To provide a framework for
effective entrepreneurial practice from the perspectives of the founder and the
key stakeholders (including partners, investors, employees, and customers) that
will make the difference in the ultimate success or failure of the venture.
One
of the central themes of the course is the critical role of opportunity
creation and recognition. Another is the
impact of the founder, and founding management team, in making this opportunity
a viable venture.
This course is especially relevant for aspiring entrepreneurs bent on launching and growing a business that is quite profitable and exceeds several million dollars in sales. Jeffery Timmons’ view expressed in one of the course texts is that it is often riskier, more demanding, and less rewarding to think too small. Through lectures, class discussion and activities, guest speakers, and the IBP development and review, this course simulates the realities of the entrepreneurial process. BA 560 will also provide an opportunity for each student to evaluate her/his own desires and prospects for a career as an entrepreneur. The course provides a complete framework for selecting a viable opportunity; developing marketing, management and operational strategies; building the financial projections that provide proof of attractive returns for investors and founders; identifying appropriate and available sources of funding; and launching the business successfully.
In
examining issues and problems of new ventures the course will help you:
·
Identify and determine what entrepreneurs need to know about the critical driving forces in a new venture
success.
·
Identify how successful entrepreneurs and investors create, find and
differentiate profitable and durable
opportunities from “other good ideas,” and how opportunities evolve over
time.
·
Evaluate and determine how successful entrepreneurs and investors create and build value for themselves
and key stakeholders (customers, investors, and employees).
·
Identify and determine the necessary financial and non-financial resources available for new ventures,
identify the criteria used to screen and evaluate proposals, their
attractiveness and risk, and how to obtain start-up and early growth capital.
·
Determine the critical tasks
to be accomplished, the hurdles to be
overcome during start-up and early growth, and what has to happen to succeed.
·
Apply venture opportunity
screening techniques to an actual start-up idea, and subsequently, develop
and prepare a business plan (the
IBP) suitable for guiding the start-up.
·
Develop and analyze financial
projections for start-up ventures.
·
Identify the future consequences
of decisions made by entrepreneurs; options that are precluded or
preserved; and the nastier minefields and pitfalls one has to anticipate,
prepare for and respond to.
·
Determine decisions that can be made to increase the reward to risk ratio at various stages of the
company’s development, and thereby change
the odds.
·
Determine the important factors
outside the control of the founders, and how critical and sensitive the
current context and timing are to all of the above issues.
Course Content and Methods
The course will accomplish the learning objectives through a diverse mix of methods and activities including:
·
Lectures and presentations
·
Course readings
·
In-class team assignments and exercises
·
Analysis and discussion of actual cases
·
Executive and entrepreneur guest speaker presentations
·
Field research
·
Business plan (IBP) preparation
·
Meetings outside of class with the instructor regarding the development
of the business plan (IBP)
Course Overview
As
can be seen from the schedule of assignments that follow, the course is divided
into five sections:
1. The Entrepreneurial Process
The first sessions provide an overview and framework for the course and an introduction to the driving forces behind successful ventures.
2. The
At the heart of any new venture is (1) an idea for a product or service and (2) a belief that a profitable market space can be created. While there is an abundance of ideas, there is a real shortage of superior ones that will survive and become the basis for a profitable and durable business. Those that do are customer and market driven. High potential ventures often are conceived and developed through a disciplined process of preparing a business plan. Even more frequently these more promising businesses have multiple founders. This section of the course will examine these two central factors in successful new ventures.
We will examine several cases in-depth to determine
the criteria and methods entrepreneurs and venture capital investors use to
find, create, screen and evaluate venture opportunities. The Venture Opportunity Screening Guide and
its companion QuickScreen are introduced and applied to your own venture
projects to put these practices to work.
3. The Entrepreneurial Mind
What are the relevant attitudes, skills and know-how for start-up entrepreneurs? Class discussion of the results of in-depth interviews with entrepreneurs and course lectures will provide the framework for addressing these issues.
4. Financing Entrepreneurial Ventures
We will focus on seed, start-up and growth capital and the practical skills needed to raise capital, craft the investment agreement, and sell the deal valuation and deal structure. Cases will examine financing issues from start-up through early rapid growth, and maturity.
5.
The Harvest
and Beyond
The final sessions will utilize a case and wrap-up lectures to examine the shaping of an entrepreneurial harvest/exit strategy.
Student Responsibilities
Attendance
As
this is a discussion oriented course, the most important part of the learning
will take place in the classroom. Your
contribution in class is essential; your participation will be significantly
missed if you are absent. Thus, I
consider attendance to be very important.
Attendance will be monitored and your class participation will have a
major impact on you final course grade.
Even when absent, you are responsible for ensuring that assignments are
handed in on time.
Class
Participation
One
necessary skill for job holders and managers at all organizational levels is to
effectively articulate the methods and results of business analysis; a second
is to convince others of recommendations based on such analysis. Active class participation is an invaluable
opportunity to develop and hone these skills.
Therefore, class participation is an essential part of the learning
experience in this course. By failing to
take an active role in class discussions, you lose a major incentive to prepare
your analysis with the thoroughness that leads to real understanding, and you
forego the opportunity to develop career essential communication skills.
Therefore, you are expected to be prepared to discuss every case, to make brief presentations when called upon, and to respond to the points made by other students. At a minimum, case preparation should enable each student to:
A.
Clearly explain (not merely identify) the major issues in the case
B.
Describe the impact of these issues on the venture
C.
Formulate alternative courses of action which directly address the
issues
D.
Recommend alternatives to founder(s)/venture management
Assignments
and Grading
Students will be evaluated according to their
performance on the following individual and group assignments. Students are encouraged to discuss their
ideas and analyses with others, both inside and outside their IBP/business plan
teams. However, individual written
assignments should reflect only your individual effort, and group
assignments should reflect only the team's efforts. As the class will discuss each written
assignment on the day it is due, late written assignments will not be
accepted.
Team Assignments
The IBP (new venture
business plan) is the one of several team projects this term. This assignment is based on the enhanced
version of Timmon’s business plan outline prepared by the instructor and the
For those enrolling in BA 568 in the winter and spring terms, this may alternatively include a new venture consulting opportunity. For teams enrolled in BA 560, and not BA 568, the final presentation will be in week 10 during the normal class period. For teams continuing into BA 568 in the winter quarter, final presentations will be during exam week. For all teams, the written portion of the new venture business plan is due November 29 at the beginning of class.
Each student's contribution to the team will be evaluated by her/his peers at the end of the term using an evaluation form to be provided by the instructor. This evaluation will help determine the student's individual team assignments grade.
Individual Assignments
Individual student assignments
are as follows:
·
Idea Generation Assignment: This
assignment is the initial step in project teams determining a new venture
opportunity. A handout will be provided
the first day of class. This assignment
is due Week 2.
·
Interview an Entrepreneur Assignment: This
assignment is based on the exercise in the Timmons’ text on pages 21-22
entitled ‘Visit with an Entrepreneur’.
Follow the steps in the exercise using the interview questions you feel
are appropriate for your interviewee.
Step 4 of the exercise describes the written portion of the
assignment. Limit your writing to 5
double spaced pages, 12 point type, 1” margins.
Rather than a transcript of your discussion, the written analysis should be a synthesis of your thinking as a result of the discussion. Make certain the last page of your writing focuses on the lessons you have learned about entrepreneurship and the entrepreneurial process as a result of this activity. I will be calling on students in class Week 4 to highlight these “lessons learned”. If you have a difficult time finding someone to interview, please let me know and I will assist you.
·
Quizzes: There will be 5 quizzes
throughout the team. All questions will
be short essay in format. Quizzes will
cover class readings, lectures, class notes, and class activities. Materials from guest speakers will also be
included. Quizzes will be 20 to 25
minutes. On days when there are quizzes,
the quiz will be given at the beginning of class. Quizzes will emphasize synthesis, critical
thinking, and application.
·
Case Analyses: You will be required to write a case analysis for each case discussed
in class. Each case analysis will be
written as if to the founder(s)/venture management team of the case company. The instructor will provide focus questions
for analysis for each case in a separate handout provided the first day of
class.
Final Grades - will be based upon the following distribution of points:
Group Assignment:
New Venture Business Plan 25.0% (250 points)
(written assignment = 175 pts, presentation
= 75 pts)
Individual Assignments:
Idea Generation Assignment 5.0% (_50 points)
Interview An Entrepreneur
Assignment 10.0% (100 points)
Responsibility Matrix &
Scope Statement 5.0% (_50 points)
Case Analyses (n=4) 20.0% (200 points/50 points each)
Quizzes (n=5) 25.0% (250 points/50 points each)
Class Participation 10.0% (100 points)
The expanded letter grade
system is used in BA 560.
The
Course Schedule
[T] = Timmons Text [AE] = Annual Editions [EM] = E-Myth [HBR] = Class Packet
[H] = Class Handouts
** =
Preparation for Executive Presentations
Class Session |
Course
|
Assignment(s) Due/Quiz Dates |
Available Files |
|
Class
1 9/27/05 |
[T] [T] [AE] #1. The Engine of Capitalist Process:
Entrepreneurs in Economic Theory [AE] #2.
Building Entrepreneurial Economies [AE] #3.
Entrepreneurs in the [AE] #4. Who are the Self–Employed? |
|
|
|
Class
2 10/4/05 |
[T] [T] [T] [AE] #9. The New Road to Riches [AE] #11. How Entrepreneurs Craft
Strategies that Work [H]
The Origin of the Entrepreneurial Species [EM] Part I: The E-Myth and American Small
Business |
Outdoor Scene Inc. Case Assignment
- Timmons (Case provided in Class #1) Idea Generation Assignment Guest Speaker: Margaret Mellinger, OSU Business Librarian |
Outdoor Scene
Inc Case Grading Sheet |
|
Class
3 10/11/05 |
[T] [T] [AE] #5. The Making of an Entrepreneur [AE] #8. To Get Ahead, Own the Store [AE] #14. Listen to Your Inner
Entrepreneur [H]
How a Start-up Evolves [H]
10 Stupid Things Entrepreneurs Do! [EM] Part II: The Turnkey Revolutions: A
New View of Business |
Quiz #1 – Material from Classes 1&2 Dow Chemical Corporate Entrepreneurship
Case Assignment – IMD (Class Packet) |
Dow Chemical Corp.
Case Grading Sheet IBP Team
Venture Screening Activity |
|
Class
4 10/18/05 |
[T] [T] [AE] #6. Leader of the Pack [AE] #7. Success Rules! [AE] #12. Seven Keys to Shaping the
Entrepreneurial Organization [AE] #13. Characteristics of a Successful
Entrepreneurial Management Team [EM] Part III: Building a Small Business
That Works! |
Interview an Entrepreneur Assignment Guest
Speaker: Dr. Erik Larson |
|
|
Class
5 10/25/05 |
[T] [H] Finding Your Competitive Edge [H] The Real Secrets of Entrepreneurs + 14
Innovators + Pixar’s Incredible Innovation Machine [HBR]: "Knowing a Winning Business
Idea When You See One" (Kim & Mauborgue) |
Quiz #2 – Materials from Classes 3&4 Team
Scope Statement |
Knowing a
Winning Business Idea PPT |
|
Class
6 11/1/05 |
[T] [AE] #10. One More Time. . . Should Small
Companies Attempt Strategic Planning? [AE] #15. How to Write a Great Business
Plan [AE] #16. Outline for a Business Plan: A
Proven Approach for Entrepreneurs Only |
Guest
Speaker: Dr. Erik Larson |
Writing a
Compelling Executive Summary |
|
Class
7 11/8/05 |
[T] [T] [AE] #17. Pursuing Venture Capital [AE] #18. Venture Impact 2004: Venture Capital Benefits to the [AE] #19. Venture Capitalists’ Assessment
of New Venture Survival [AE] #24. Harnessing Innovation [AE] #26. Field of Dreams [AE] #27.
Negotiating Venture-Capital Transactions |
Quiz
#3 – Materials from classes 5&6 Team
Responsibility Matrix |
|
|
Class
8 11/15/05 Part
I (Section
1 12:00 – 1:50; Section 2 6:00 – 7:50) |
[T] [T] [AE] #20. Ready or Not? [AE] #21. The Entrepreneur’s
Financial-Fitness Checklist [AE] #22. Solving the Puzzle of the Cash
Flow Statement [AE] #23. The ABC’s of Borrowing for
Growth [AE] #25. A Kick-Start for Entrepreneurs [AE] #28. The Do’s and Don’ts of
Fundraising [AE] #29. All in the Delivery |
Bluewater
Aquaculture Case Assignment – HBR (Class Packet) |
Bluewater
Aquaculture Case Grading Sheet |
|
Class
8 11/18/05 Part
II (Sections 1 & 2: 12:00 – 1:30
BXL 207) |
Executive Presentation – McHenry Endowed
Lecture Series **
Executive Presentation preparation |
** Executive Presentation 12:00
– 1:30 Executive Presentation attendance is mandatory; Optional
lunch with the guest speaker from 11:00
– 12:00 in Bexell 202 compliments of the OSU College of Business Austin
Family Business Program |
|
|
Class
9 11/22/05 |
[T] [T] [AE] #30. Are You Built to Grow? [AE] #31. Managing Growth [AE] #32. The Big Question: To Grow or Not
to Grow? [AE] #33. Three Strategies for Managing
Fast Growth [AE] #34. Managing Global Expansion: A
Conceptual Framework |
Quiz
#4 – Materials from Classes 7&8 Sendwine.com
Case Assignment - HBR (Class Packet) |
|
|
Class
10 11/29/05 |
[T] [AE] #36. Harvesting Firm Value: Process
and Results [AE] #37. Choosing Your Exit Strategy [AE] #38. The Initial Public Offering: Early
Planning Considerations [AE] #39. The Joys of an ESOP [AE] #40. Selling a Family [AE] #41. Oiling the Hinges on Your Exit
Strategy [AE] #42. Company for |
New
Venture Business Plan Assignment (written) due for all teams Presentation
of New Venture Business Plan
Assignment by the non- IBP
team (Evening section only) |
Strategies for
Harvesting a New Venture Activity |