different types of entrepreneurship - entrepreneurship 101 (2012/2013)
DESCRIPTION
This lecture describes different types of business structures. We discuss some of the early questions that an entrepreneur must ask before committing to a business: * Will your business be a for-profit enterprise, a not-for-profit or somewhere in between? * What are the different requirements and resources necessary for your selected enterprise model? * What type of financing should you target: equity, debt, grant funding or a combination of all three?TRANSCRIPT
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2. Entrepreneurship 101!!Presented by Kerri Golden, Partner JOLT Fund !and !Allyson Hewitt, Director, Social Entrepreneurshipand Director, SiG@MaRS!!October 2012! 3. Memory at Work Why do I want to start this business?! What is my motivation?! What resources do I need?! Basement or corporate ofce?! Shared spaces/incubators?! How do I t into the rest of the world?! Is my product and/or service unique?! Have others tried this before?! What is my business model?! For prot?! Not-for-prot?! Co-operative?! Hybrid?!Pg 3! 4. Target Zone Grant Funded Revenue Social Social Ventures Tradi;onal Non-Prot Genera;ng NFP Purpose (B Corps L3C) Business (Charity) (Social Enterprise) Business Co-opera3ve Structure Social (Charitable) Financial (Commercial) RETURNPg 4! 5. Memory at WorkCONSULTING! Key Characteristics! Multiple participants, diverse focus, variable size, leverage core assets to provide access to market and advice! Examples! Consulting: McKinsey, Bain, Deloitte, IBM, Hatch! Aperio, Venture Deli! Benets & Risks of Model! Low capital costs and minimal set-up! Leverages specialized knowledge/experience ! Liability insurance, can be difcult to build/scale!Pg 5! 6. Memory at WorkSERVICES! Pg 6! 7. Memory at WorkSERVICES! Key Characteristics! Speciality business serving consumers or other businesses or consumers! Examples! Benets & Risks of Model! Online software as a service! Capital costs can be high; labs services, servers!Pg 7! 8. Courier Services!Pg 8! 9. Advise. Convene. Accelerate.JUMP Math! Do good- er Photo: Chris Chapman This is John Mighton of JUMP Math. We worked together to take his innovative venture to the next level. Do good better. This is SiG@MaRS. marsdd.com/sigPg 9! 10. Memory at WorkPRODUCTS! Key Characteristics! Tangible offering (consumer products, pharmaceuticals, equipment or device)! Examples! ! Benets & Risks of Model! High development costs; marketing! Sales and distribution model! Production costs high, outsource?! Potential for scale - huge! Pg 10! 11. Memory at WorkPRODUCTS! Pg 11! 12. Memory at Work Forms of Financing! Bootstrap - self-fund and reinvest all prots for growth ! Debt - borrow from someone, using an assetas security; rate & time period to benegotiated!! Equity - sell a piece of your venture tosomeone in exchange for an investment inthe venture! ! Fundraising: grants/ foundations/ governmentfunding/ corporate sponsorship/ members(co-ops)! Pg 12! 13. Memory at WorkA quick primer on debt versus equity:!!Debt: - gets paid back rst, before any dividends! get paid !!- secured by assets (company, your personal)!!+ once the debt is repaid (with interest of! course), the lender gets nothing else!!Equity: + never has to be repaid!! - keeps on paying forever!! -/+ you now have an investor partner who! is in this, like you, for the long haul! Pg 13! 14. Mobile App Example!You need $40K to build/market a new iOS app havegrant for $10K so funding needed is $30KProfitDebt 50:50 EquityLow on chart $10Klender loses $20K*partner loses $25K you get $0K & owe $20Kyou get $5KFeatured List$30Klender is even+ partner loses $15K you make $0Kyou make $15KTop of Chart$200Klender is even+partner makes $70K you make $170K you make $100KGranting agency reports your success! 15. Memory at Work Crowdfunding! Pg 15! 16. Memory at Work The 3Fs again Friends, Family and Fools! The turkey principle! Angels (aka high net worth individuals)! Generally like to invest in areas that they have worked in or are comfortable with! Can add valuable hands-on experience! http://www.angelinvestor.ca/! Accelerator Programs! Supported by angels and VC funds! Banks and Other Institutions! Tier Ones traditionally dont fund early losses! Venture Capital Funds! Different funds invest at different stages in the growth of a company! Most funds also specialize in type of investment! http://www.cvca.ca/!Pg 16! 17. Memory at Work Proof of Principle / Idea to Innova3on www.ResearchNet.ca www.nserc-crsng.gc.ca/index_eng.asp www.cmf-fmc.ca/funding-programs hNp://riccentre.ca/programs/venture-start/ hNp://coralcea.ca/ NRC - IRAP hNp://irap-pari.nrc-cnrc.gc.ca/main_e.html Founda3ons: Ontario Trillium Founda;on - www.trilliumfounda;on.org Gates Founda;on www.gatesfounda;on.org Imagine Canada - hNp://www.imaginecanada.ca/node/22 Pg 17! 18. How to contact us:!!Allyson Hewitt, [email protected]!!Twitter: @AllysonHewitt!!Kerri Golden, [email protected]!!Twitter: @KerriGolden!!