Finance Study Guide

1. Four Types of entrepreneurial ventures are: Marginal/Survival, Lifestyle, Managed Growth and High/Aggressive Growth.

Key Characteristics: (Types of Ventures handout)

Implications:

• Time horizon and expectations

• Cost structure and resource commitments

• Financing - debt versus equity

• Partners and kinds you choose

• Ongoing cash flow management and its role

• Exit strategy

Venture: aggressive growth – looking to scale across the US and perhaps international countries

3. It is useful to approach entrepreneurship as a process because it requires considerable thought, preparation and planning as well as rigor and discipline. Entrepreneurship is opportunity obsessed, holistic in approach, and leadership balanced for the purpose of value creation and capture.

Entrepreneurship Process:

Three issues that need to be addressed at teach state to launch Tablet Teach would be

One must be the most entrepreneurial in the ____ stage. **need to find answer for this**

5. No entrepreneurs are not born and there is no particular prototype that one has to fit. The individual just has to have an opportunity not money, strategy, networks, team, business plan, etc to start a venture.

Key Traits of an entrepreneur:

¥ Achievement Motivation

¥ Internal Locus of Control

¥ Calculated Risk-taking

¥ Tolerance of Ambiguity

¥ Independence

¥ Persistence/Perseverance/Tenacity

Key Competencies:

¥ Ability to learn

¥ Social abilities

¥ Adaptation

¥ Guerrilla capabilities

¥ Ability to formulate and convey a vision

¥ Opportunity recognition

¥ Opportunity assessment

¥ Creative problem-solving

¥ Risk mitigation

¥ Resource leveraging

¥ Creative problem solving

¥ Planning something from nothing

¥ Implementation of something new

Key Cognitive Styles:

¥ Cognitive biases (optimism bias, illusion of control, law of small numbers)

¥ Entrepreneurial alertness: motivated propensity to formulate an image of the future; to process information differently, challenge assumptions, and see opportunity where others don’t

¥ Signal detection: tendency to be more concerned with recognizing stimuli that are present than correctly concluding stimuli are not present

¥ Prospect theory: tendency to focus more on opportunities for gain they will forfeit if they overlook an opportunity; E’s prefer to avoid loss when focusing on gains but seek risk when focusing on losses.

¥ Regulatory focus: E’s regulate their behavior from more of a promotion (emphasis on accomplishment and multiple options) than a prevention (avoiding negative outcomes, considering fewer options) emphasis.

Founder of Tablet Teach: took the risk to take his recommended opportunity to a client on his own

7. Different types of entrepreneurs:

¥ Personal achiever (Classic Entrepreneur)

¥ High need for achievement and performance feedback

¥ Desire to plan and set goals; strong individual initiative

¥ Strong personal commitment and identification with organization

¥ Super salesperson

¥ Capacity to understand and feel others; to empathize; desire to help others

¥ Social processes are important so are social interaction and relationships

¥ Sales force is crucial to carrying out company strategy

¥ Real manager

¥ Desire to be a corporate leader; compete, decisive, desire for power,

¥ Positive attitudes to authority, desire to stand out from the crowd.

¥ Expert idea generator

¥ Desire to innovate; love of ideas, curious and open minded; new product development is crucial to company strategy

¥ Intelligence is a source of competitive advantage; desire to avoid taking risks

¥ Closest type for me is cross between super salesperson and real manager

¥ Implications: constant desire for social interaction may be distracting or inhibit significant growth for future ventures. Strong competitive desire and for power may be seen as intimidating or decisive to others

9. Promoter: more entrepreneurial focused; expects change and welcomes it; looks for resources;

external pressures = opportunity to exploit

Trustee/Administrative: thinks unpredictability is danger; thinks resources are controlled and tries to deplete them; defensive

I think I am more of a promoter due to my willingness to look for change and see it as a good thing. I see that when people are “stuck” in their own ways or do things because that’s how it’s “always been done” is an impediment to success and innovation.

Managers must be able to wear both hats because certain situations required a mix of both to be able to make the most effective decisions. Trustees look to reduce risk which is an attribute that a promoter would need to learn. On the other hand, trustees would need to learn to adapt to change in an increasingly dynamic and flexible world