Managing the Five Risks you face at all stages of your business development:

1. growth risk

2. technology & production risk

3. marketability & competing risk

4. financial risk

5. team & management risk

Turn Risks into Opportunities!

2.

Inception

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

Organization: Informal

Management:  Entrepreneurial

Technology: Concept

Funding Stage: Seed

pp.

Problem

Solution

Action

2.1

Growth Risk

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

Business Plan Pro

• Identification of the type of the new company

• Selection of the type of entity and ownership

• Starting the new company in an enabling environment such as business incubator

• Do venture planning to assess the feasibility of your venture and compare various business models

• Learn how to succeed in business

• Develop your competitive strategy and a strategy map

• Avoid the 10 deadly small business mistakes; be aware of the deal-killer entrepreneurial personality traits

• Learn 9 secrets to boost your small business performance and the ten commandments for building a growing company

• Make a Strength – Weaknesses – Opportunities – Threats (SWOT) analysis

• Take outside professional advice and services

• Study and employment and regulatory requirements

• Select legal structure of your new company

• Study startup company intellectual property (IP) strategies. Register your trademark - the legal protection for your company, your business name, your brand, and your domain name

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

• Start developing strategic alliances

8 Key Entrepreneurial Questions

2.2

Technology & Production Risk

• Violations of intellectual property rights (IPR)

• Emphasis on further research rather than business development

• Protection of your IPR - turning your inventions into profit-making assets

• Development of the intellectual property management (IPM) system

• Development of your personal and business skills

• Master the 10 easy steps to turning your ideas / inventions into cash

• Protect your IPR, develop IP strategies and take necessary disciplinary steps for your IPR protection

• Establish a technology intelligence system

• Search for patent information to identify alternative technologies and avoid possible infringement problems

• Map your territory

• Identify bottlenecks and pitfalls

• Prepare schedule, define and describe milestones

• Prepare functional and design product specifications

• Learn from success stories of other entrepreneurs

2.3

Marketability & Competing Risk

• Overoptimistic estimates of market penetration and shares

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

• Low market acceptance

• Customer's resistance to change

• Making classic marketing mistakes first-time entrepreneurs usually make

• Understanding the market needs, discontinuities, and opportunities

• Clear and realistic picture of the "package" – functional product specifications

• Preparation of the marketing and selling strategy

• Getting above the competitors

Customer Success 360

Customer Value Creation

Buzz Marketing

Selling Is Problem Solving

Synergistic Selling

• Develop you critical milestone program

• Know your customer, make customer assessment

• Conduct market research, but don't rely on traditional market research only - it can tell you what exists, not what should be or could be

• Identify your differentiation and positioning strategy

• Develop a prototype and test market your product or service; identify the price at what you could sell it

• Define the shape of the product to develop and its features needed to deliver benefits

• Finalize your market niche, develop marketing strategy, and prepare a marketing plan

• Conduct market oriented R&D, make a sales forecast

• Market your venture to prospective partners, investors and clients

• Develop your competitive strategy

2.4

Financial Risk

• Insufficient funds or access to top-up finance

• Need to address basic capital and cash-flow issues

• Wrong mix of funds (e.g. gearing is too high due to high debt to equity ratio)

Venture Financing Funnel

Key Documents

• Good understanding of the venture financing process

• Selection of the types of financing required for different types of activities

• Identification of possible sources of seed capital: bootstrapping, business angels, venture capital funds, development funds

• Good understanding of the investment opportunity selection criteria of different types of investors

• Follow Ten³ step-by-step guide to venture financing

• Study the start-up capital formation process, venture capital basics, and the guidelines for getting funding in today's market

• Make financial assessment

• Explore alternatives to VC financing and 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

• Search for angel investors and other sources of seed capital and study their investment evaluation criteria and procedures

• Prepare a milestone chart and cash flow forecast

• Build up a management team

• Understand how investors read a business plan and their start-up business valuation principles

• Study typical terms of stock issued to venture capitalists, and how to structure the deal; develop option for investors for realizing their financial returns and possible exit strategies

• Prepare a start-up business plan

• Prepare project presentation and present it to prospective investors

• Negotiate the agreement wits investors; take a professional help to structure the deal

• Make the best of the venture capital obtained

Venture Financing

2.5

Team & Management Risk

• Not enough time

• Can't do everything

• Constant fire fighting

• Opportunity overload

• Development of the doer and decision maker skills

• Selection of the best management support system at lowest cost

9 Roles of a Team Leader

Leadership-Management Synergy

Leadership attributes

12 Leadership Roles

Winning Team: 7 Elements

• Develop yourself to achieve extraordinary results

• Develop your entrepreneurial attitudes and capabilities

• Develop your competing skills

• Learn venture management and corporate management principles and develop your own unique model

• Build an innovation-friendly organization

• Launch a crusade

• Do it yourself

• Respond to every opportunity

• Fight fires

• Hire best people to make your vision a reality

Venturepreneur