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2.

Company stage:

Start-Up

-  no product revenues and little expense history; team is incomplete but an idea, business plan, and the beginnings of product development

Organization:

Informal

Management:  

Entrepreneurial

Technology:

Concept

Funding Stage:

Seed

pp.

Problem

(Why worry)

Solution

(What to do)

Action

(How to do?)

2.1

Growth Risk:

New business formation: move into a competitive business world requires specific type of knowledge, expertise, resources and personal skills

• Select what type of company you would like to establish and prepare for it (see slide presentation)

• Select the type of entity and ownership

• Start your business in an enabling environment such as business incubator (see slide presentation)

• Take outside professional advice and services

• Comply with employment and regulatory requirements

• Explore opportunities for starting up your business in an enabling environment such as a technology business incubator or S&T park

2.2

Technology Risk:

•  Violations of intellectual property rights (IPR)

• Emphasis on further research rather than business development

• Protect your IPR and research the market to make sure that your business does not violates somebody else's IPR

• Develop your business skills

• Protect your intellectual property rights, take disciplinary steps or other measures to keep your technology as a trade secret

• Map your territory

• Identify bottlenecks and pitfalls

• Define and describe milestones

• Learn from success stories of other entrepreneurs

2.3

Marketability Risk:

Product design can not be tailored to the needs of real users until thorough market research has been done

• There is no substitute for market research

• Prepare a marketing and selling strategy

• Conduct market research

• Finalize your market niche and develop marketing strategy

• Conduct market oriented R&D

• Market your venture to prospective partners, investors and clients

• Develop initial product design and make a market test

2.4

Financial Risk:

• Limited financial resources

• Need to address basic capital and cash-flow issues

• Have a good understanding of the venture financing process (see slide presentation)

• Select types of financing you need for different types of activities

• Identify possible sources of seed capital: bootsrapping, business angels (see slide presentation), venture capital funds, development funds

• Study investment opportunity selection criteria of different types of investors (see slide presentation)

• Introduce your project to prospective investors

• Study the start-up capital formation process

• Try to personally finance and bootstrap your firm as long as possible, until the need for external growth finance becomes evident and unavoidable.

• Select type of finance you require and develop your fund raising strategy

• Search for angel investors and other sources of seed capital

• Study their project evaluation criteria and procedures

• Suggest how investors could realize financial returns on their investment in your business and possible exit strategies (see slide presentation)

• Prepare a milestone chart and cash flow forecast

• Build up a management team and prepare and prepare a start-up business plan that should include

  •  Market potential & competition

  •  Business concept

  •  Marketing plan

  •  Financial plan

• Study start-up business valuation principles

• Study typical terms of stock issued to venture capitalists, how to structure the deal and prepare for negotiations

• Prepare project presentation for investors

• Present your project to investors

• Negotiate the deal and take a professional help to prepare the final agreement (see a sample agreement)

2.5

Team & Management Risk:

• Not enough time

• Can't do everything

• Constant fire fighting

• Opportunity overload

• Develop doer and decision maker skills

• Do it yourself

• Respond to every opportunity

• Fight fires

• Hire others to do it your way