Module 6 Flashcards
Strategic Planning
A process to determine the mission, objectives, and strategies of a venture or organization and then find ways to achieve the identified vision.
Angel Capital
Investments in a new venture made by wealthy individuals (angels)
Mission Statement
A brief written statement of the vision and purpose of a venture or an organization
Accounts Payable
Payments due to suppliers for products and services
Intrapreneur
A manager within a firm tasked with fostering innovation through entrepreneurial activities
Venture Capital (VC)
Investments in new ventures with exceptional growth potential
Private Placement
A method of raising capital through securities sold without a public offering (to select private investors)
Creativity
The generation of new ideas by individuals and teams
Partnership
A legal structure of co-ownership between two or more people who go into business together and share in any profits or losses
Intrapreneurship
The entrepreneurial process conducted within an established organization
Accounts Receivable
Money due from clients for products delivered or services performed
Resource-based theory
A model advanced by Jay B. Barney and Delwyn N. Clark that focuses on the competences and capabilities of the firm in creating competitive advantage
Debt financing
When an entrepreneur borrows cash and agrees to pay back the lender the original loan amount, plus a premium, by an agreed upon future date
Social Innovation
The creation of innovative solutions to complex social problems
Sole proprietorship
The simplest legal structure where the sole owner is not legally distinct from the business
Entrepreneurship
The process of innovating with products or services for the purpose of creating wealth for the entrepreneur while adding value to society
Innovation
The process by which new ideas are converted into new products, business practices, and strategies that create value
Strategy
A plan of action designed to achieve specific goals or objectives in the venture
Social Entrepreneurship
The process of developing innovative solutions for society’s most pressing social problems using entrepreneurial tools and techniques
Equity Financing
When an entrepreneur receives cash from from an investor in exchange for equity in the company
Commercialization Strategy
The strategic choices an entrepreneur makes to finance later-stage development of a venture
5 Common Commercialization Strategies
- Equity Investment
- Strategic Alliance
- Acquisition
- Licensing
- Initial Public Offering
Equity Investment
Commercialization strategy which includes one or more investors in later stage equity financing round
Strategic Alliance
Commercialization strategy in which there is a partnership with complementary business that benefits both parties in some way
Acquisition
Commercialization strategy in which there is a purchase of the company by another business entity
Licensing
Commercialization strategy in which one is supplying rights to proprietary ideas, products to other businesses in exchange for payment
Initial Public Offering (IPO)
Commercialization strategy in which the company stock is made available to investors of all types and sizes via the public markets
SWOT Analysis
A strategic analysis of a venture’s strengths, weaknesses, opportunities, and threats
Elevator Pitch
The quick, succinct summation of an entrepreneurial opportunity
Serial Entrepreneur
An entrepreneur who starts multiple business over time
Corridor Principle
The idea that new ventures can surface new and unintended market opportunities
Market Niche
The subset of the market on which a specific product or service is focused on
S Corporation
If there are less than 100 shareholders who own the same stock, a business can seek exemption from corporate income taxes and yet retain some key benefits (limited liability). Structured to limit federal income taxes on small businesses (no corporate income tax on earning)
Limited Liability Company (LLC)
Fewer restrictions than an S Corporation. No limit to shareholders. Company members are taxed personally on profits.
Business Plan
Includes production, finance, facilities, human resources management. Should have between 10-12 sections and 50 pages is ideal length
Personal Cash
Funding the venture through credit cards, home equity, second mortgage, family/friends
Internal cash
Funding the venture through accounts receivable and accounts payable. LESS EXPENSIVE THAN EXTERNAL CASH
External Cash
From banks and financial companies (reluctant to give, high-cost)
