Chapter 6 Entrepreneurship

What are the four driving forces of venture growth?

Leadership, opportunity domain, resources and capabilities, and execution.

What is leadership in venture growth?

The ability of founders/managers to guide and adapt the business as it grows.

What is the opportunity domain?

The market environment a business operates in (demand, competition, trends).

What are resources in a venture?

Assets a firm owns (money, people, equipment, brand).

What are capabilities?

What a firm can do well using its resources.

What is execution?

The ability to successfully carry out plans and strategies.

What are the three post-startup options?

Grow, maintain, or sell.

What is a grow strategy?

Expanding operations, revenue, or market reach.

What is a maintain strategy?

Keeping the business stable without major growth.

What is a sell strategy?

Exiting the business by selling it.

Who are internal stakeholders?

People inside the business (employees, owners, investors).

Who are external stakeholders?

People outside the business (customers, suppliers, community).

What is the cash cycle?

The time between paying for inputs and receiving customer payments.

Why is the cash cycle important?

It affects liquidity; poor management can cause cash shortages.

What is a value chain?

The activities a firm performs to create value.

What are primary value chain activities?

Supply chain, operations, distribution, marketing/sales, and service.

What is supply chain management?

Managing sourcing and inventory of inputs.

What are operations?

Turning inputs into products/services.

What is distribution?

Delivering products to customers.

What are marketing and sales?

Promoting and selling products/services.

What is service?

Supporting customers after the sale.

What are support functions?

Activities that assist primary operations.

What is human resources?

Hiring, training, and managing employees.

What is finance (support function)?

Managing money, budgeting, and funding.

What is MIS?

Systems that support decision-making with data.

What is outsourcing?

Hiring outside firms to perform business activities.

What are advantages of outsourcing?

Lower cost, efficiency, access to expertise.

What are disadvantages of outsourcing?

Less control, quality risks, dependency.

What are sources of early growth financing?

Founder loans, 3 F’s, angel investors, loans on assets, equipment leases, strategic partners.

What are founder loans?

Money the founder invests into the business.

What are the 3 F’s?

Friends, family, and “fools” who provide funding.

What are angel investors?

Wealthy individuals who invest in startups for equity.

What are loans on assets?

Borrowing using assets as collateral.

What are equipment leases?

Renting equipment instead of buying it.

What are strategic partners?

Companies that invest or collaborate for mutual benefit.

What are tangible resources?

Physical assets like equipment and buildings.

What are intangible resources?

Non-physical assets like brand and reputation.

What is a simple organizational structure?

Few levels with centralized control.

What is a functional structure?

Organized by departments (marketing, finance).

What is a multi-divisional structure?

Organized by products, markets, or regions.