Entrepreneurship Flashcards
1
Q
What does entrepreneurship concern?
A
- The identification of opportunities
- The evaluation of opportunities
- The exploitation of opportunities
2
Q
Describe Entrepreneurial Opportunities
A
- They exist when (a) new products or services can satisfy unmet needs and/or (b) extant products and services can be offered in new markets and/or in new ways.
- Can occur in for-profit or nonprofit sectors; also can occur in startups, established firms, small firms, or large firms.
- Often involve using underpriced resources and /or using resources in different, unanticipated, and novel ways.
- Can be discovered, created, or some combination thereof.
3
Q
Describe the value of entrepreneurship at a micro-economic level
A
- Can be a source of new firms, as well as new competitive advantages for existing firms
- Can position individuals and firms to succeed in future endeavors.
4
Q
Describe the value of entrepreneurship at a macro-economic level
A
- Fuels economic growth
- Creates wealth for employees and investors
- Creates employment
- Generates prosperity for citizens
- Generates government revenue
5
Q
Describe Incremental Innovation
A
- Most innovations are incremental
- Provides small changes in current product lines and service offerings
- May change an industry without altering its basic foundation
- Improves existing process and knowledge
- Can create valuee
6
Q
Describe Radical Innovation
A
- Rare because of difficulty and risk
- Represents significant technological breakthroughs
- May transform an industry or create a new one
- May change the knowledge and processes others must have
- Can create value
7
Q
What are the 3 “I’s” of the Entrepreneurial Process?
A
- Invention
- Innovation
- Imitation
8
Q
Describe “Innovation”
A
- Creating commercial viability from an invention
- Brings something new into use
- Commercial criteria are used to evaluate success
- A fundamental goal of entrepreneurship
9
Q
Describe “Invention”
A
- Creating or developing a new product, process, or service
- Brings something new into being
- Technical criteria are used to evaluate success
- Alone, invention does not produce competitive advantage
10
Q
Describe “Imitation”
A
- Adoption of an innovation by other firms, perhaps with slight changes; might be inevitable at some point
- Can happen quickly (e.g., soon after a product launches)
- Moves industries toward product or process standardization
- Though unlikely to generate competitive advantage, imitation might be necessary sometimes
11
Q
What are Business Angels
A
Individuals who invest their own money in exchange for equity
12
Q
Describe how Angel Investment works
A
- Generally invest in firms owned and managed by people they know and trust
- Investment usually occurs in amounts that are a small fraction of the angels’ net worth
- Often allow the entrepreneur to maintain more ownership, perhaps enhancing the entrepreneur’s return.
13
Q
Describe Government sources of funding
A
- Because governments have an interest in facilitating entrepreneurship, they sometimes provide seed money
- Can be direct grants, loans, or government contracts
- Examples include initiatives to facilitate entrepreneurship by women, minorities, and nonprofits
14
Q
What are venture capital firms?
A
Individuals or firms investing on behalf of other entities in exchange for equity
15
Q
How do VC’s work?
A
- Tend to seek high returns on their investments
- May take an active role in firm management
- Often invest in stages
