Course:Modeling and Start-up of the Entrepreneurial Venture

From SharedExperienceProject

This course has been submitted as ENTR 4332.

© 2008, Bissett School of Business, Mount Royal College.

Contents 1 Course Description 2 Context and Motivation 3 Required Course Materials 4 Learning Objectives 5 Mark Allocation and Assessment Schedule 6 Learning Activities and Methods of Assessment 6.1 Topic Quizzes and Exercises 6.2 Start-up Project 6.2.1 Part I: Securing the team 6.2.2 Part II: Second-order business model(s) 6.2.3 Part III: Business Strategy 6.2.4 Part IV: Financing Strategy 6.3 Final Pitch 6.4 Reflective Paper 7 Content and Topic Schedule 8 Resources 9 Course authors and contributors 10 Copyright

Course Description

In this course, students will be immersed in the issues encountered by entrepreneurs while modeling and starting new ventures. They will be challenged to evaluate the opportunities they developed in ENTR 4331 and consider industry, market and product research through the lens of the pre-start-up and start-up phases of the venture life cycle. Contingency strategies will be developed as necessary after students receive feedback on progress and viability.

Prerequisites: ENTR 4331: Opportunity Development in the Entrepreneurial Venture

Context and Motivation

ENTR 4332 is the second of four highly integrated and increasingly immersive courses in the entrepreneurship program at Mount Royal. In this course, you will advance (to first revenues) the most relevant and promising of the entrepreneurial ventures identified in ENTR 4331 - Opportunity Development in the Entrepreneurial Venture.

You will be challenged to consider industry, market and product research through the lens of the pre-start-up and start-up phases of the venture life cycle. Issues such as the processes of founding teams, intellectual property protection, opportunity valuation, legal strategies, risk protection and advisory boards are just a few of the issues to be explored. As a unique feature of the course, it is anticipated that students may have the opportunity to interact with industry experts wherever possible throughout the process.

Required Course Materials

The readings for this course are available electronically. As such you will need a reliable internet connection and access to a printer.

Learning Objectives

The learning objectives and methods of assessment for this course are given in in the table below.

Four areas of focus have been identified for the objectives that you should achieve during your time in Mount Royal’s entrepreneurship program. The course objectives below are categorized according to these areas of focus that are common to all courses: 1) entrepreneurial toolset, 2) personal mindset and brand, 3) experiential and knowledge construction, and 4) team, networking and communication.

Mount Royal has identified six institution-wide learning outcomes that describe the core abilities you should develop during your studies, regardless of your academic program. These outcomes and abilities help prepare you for a life of continuous learning, and have been identified as critical to success in the workplace. The relationship between the course objectives and the college outcomes is also shown below.

Learning objectives for this course

Outcome thread	Student learning objectives	Methods of assessment	Link to institution wide outcomes
Entrepreneurial toolset objectives	Demonstrate understanding of and ability to apply fundamental concepts of modeling and starting a new venture, e.g.: seed and start-up financing valuation founder’s team attracting a start-up team and advisory board second-order business models intention to start vs. starting; attracting financing	Topic quizzes Idea exercises	Thinking
Personal mindset and brand objectives	Recognize and demonstrate the attitudes, behaviors and personal characteristics required for modeling and starting an entrepreneurial venture Demonstrate reflective ‘habits of mind’ and ongoing commitment to developing your entrepreneurial creativity practices	Reflective journal and paper Start-up project	Communication Thinking
Experiential and knowledge construction objectives	Apply the above concepts and methods to model and start an entrepreneurial venture Develop and test one or more rigorous business models for such a venture, including target market, value proposition, offering and a financial model Develop a business strategy taking into account external factors, functional strategies (e.g. human resources, marketing, operations, legal, risk, IP, etc…), your ethical responsibilities Develop a financing strategy reflecting short- and medium-term investment requirements Identify information requirements, generate a search strategy and carry out research required to support all of the above activities	Exercises Start-up project	Thinking Communication Group effectiveness Information retrieval and evaluation Ethical reasoning
Networking, team and communication objectives	Attract others to secure an entrepreneurial team, or market yourself for recruitment by a founding team Clearly communicate and pitch (written and verbal) to attract financing for an entrepreneurial venture Strengthen your own personal social network as a resource for developing your venture Work effectively as an individual, in peer groups and with an external network (of supporters and experts) to achieve your objectives Collaborate, communicate and manage projects using appropriate computing tools	Start-up project Final pitch	Group effectiveness Computer literacy Communication

Mark Allocation and Assessment Schedule

Your final mark for the course will be computed as a weighted average of the marks you receive in each of the above assessment tasks. The weights used to compute that final mark and the schedule of the assessment tasks are given below:

Assessment for this assignment

Methods of assessment	Weight	Scheduled due date
Topic quizzes and exercises	20%	TBA in advance
Start-up Project Securing the team Business model(s) Business strategy Financing strategy	45%	Week 3 Week 4 Week 9 Week 12
Final pitch	20%	Week 13
Reflective paper	15%	Weeks 8 and 14

Learning Activities and Methods of Assessment

For the purposes of formal feedback and grading, you will be assessed based on your performance in each of the following tasks:

Topic Quizzes and Exercises

Instead of a midterm exam, quizzes and/or in-class exercises will be used to provide regular feedback on how well you are meeting the learning objectives of each topic. Directions and timing will be announced in class, but expect to be assessed in this way most weeks, especially for the first half of the course. The exercises are designed to highlight important concepts and guide you through the process from opportunity to first-revenue.

Start-up Project

In this course, the class will further develop the entrepreneurial ventures identified in ENTR 4331. This will be achieved through a three-part experiential project:

Part I: Securing the team

Focusing on achieving success for the entrepreneurial ventures identified in ENTR 4331, you will be required either to recruit classmates to your entrepreneurial team or to be recruited by another team of founders. The team will be required to build a close network of external resources, akin to your mentors and advisors. Details will be provided in class, but expect criteria to include balance of skills, alignment of mindsets, ability to execute, and appropriate division of founders’ “equity”. As part of the process, you will make contributions to your reflective journal.

Part II: Second-order business model(s)

Here the team will develop a rigorous business model(s) for its venture. This will include identifying and characterizing the target market(s), discovering and documenting the value proposition(s) and designing an appropriate offering (commodities, products, services and/or experiences). It will require preparation of an initial financial model in the form of proforma statements. It also calls for interaction with stakeholders across the value chain in order to test and refine the proposed model. You will again make contributions to your reflective journal.

Part III: Business Strategy

Here the team will develop a strategy for the new venture. This aims for competitive advantage by taking into account external factors such as the macro environment, the relevant industries, the competition and any ethical constraints that may exist. Specific functional strategies will be taken into account as required, e.g. product development, operations, marketing, human resources, legal, risk, and intellectual property. You will again make contributions to your reflective journal.

Part IV: Financing Strategy

A big part of the success of a new venture is its ability to forecast and attract the funding required to get off the ground and survive. Your team will be required to develop a short- and long-term financing strategy based on the business model, financial model and strategy described above. This will include valuing your venture and dividing the equity in preparation for an offering to potential investors. You will again make contributions to your reflective journal.

Final Pitch

Your work will come together in the form of a final pitch of your new venture to an expert group representing investors and industry stakeholders such as suppliers, customers, complementary organizations, and substitutes and alternatives. Based on your pitch, you will be provided with feedback on the likelihood that your venture will earn its first and subsequent revenues.

Criteria will include the strength of your team, business model, valuation , and the pitch itself. The panel will award your venture with “financing” and approval to move on to the next stage of venture development in ENTR 4343 - Start-up to Survival of the Entrepreneurial Venture.

Reflective Paper

In this paper you will draw upon your journal to reflect on your process of taking an idea from viable opportunity to start-up. Emphasis will be on how your venture evolved throughout the process, on the roles of your team and growing social network, on what you learned about parting with control in order to obtain outside financing, and on your own personal growth as a creative entrepreneur.

Content and Topic Schedule

The following tables provide the topic schedules and links to the content for each topic in this course. When curriculum development has been completed for the course, there will be one link for each topic to its own topic-level description of learning objectives, teaching and learning activities and assessment activities. As described in our Entrepreneurship Curriculum Design Principles and Process Document , this is intended to speak to future teachers of the program. A sample topic can be found here: Topic 1: Vision and Mission.

Topic Schedule

Week	Topics	Assessment tasks
#	Topic 1: The founders' team The lead entrepreneur Attitudes, behaviors for success Selling a vision to build a team Topic 2: The entrepreneurial team The importance of the team Early-stage team-building Risks in team-building, e.g. families and friends Quitting the entrepreneurial team Retaining and rewarding Evolution of the team	TBD
#	Topic 3: Outside resources Advisors, mentors Lawyers, accountants, consultants Topic 4: Agreements Dividing the founders’ equity IP ownership, non-competes, NDAs, partnership agreements, etc…	TBD
#	Topic 5: Who is the customer? Target vs. actual customers Are you sure? Are you really sure? Useful segmentation Topic 6: What does the customer value? Value proposition and value curves Useful research methods Topic 7: What is my offering? Commodities, goods, services and experiences The portfolio	TBD
#	Topic 8: Do the numbers add up? Back-of-the-envelope calculations Proforma financial statements The numbers test	TBD
#	Topic 7: Strategic Entrepreneurship Strategy for entrepreneurs: the challenge of exploring and exploiting Topic 8: Generic Strategies Low cost leadership and differentiation Generic strategies: are they a substitute for thinking? Topic 9: Functional and focused strategies Product development, operations, marketing, human resources, legal, risk, intellectual property, etc…	TBD
#	Topic 10: Sources of seed and start-up financing Your own assets Friends, family and fools Angels Venture capitalists Topic 11: Developing the offering Valuation Dividing up the pie Deal structuring and negotiation	TBD
#	Topic 12: Pitching your opportunity Persuasive communication of team, business model(s), strategiesMaking the ask	TBD

Resources

The following sources are not intended to be read by the student. They are included here for completeness to provide a representative cross-section of the resources that are informing the development of this course:

• Kim, W.C. and R. Mauborgne (1999). Creating New Market Space. Harvard Business Review. Jan-Feb 1999, Vol. 77, Iss 1. pp. 83-93.
• Leach, J.C. and R.W. Melicher (2007). Entrepreneurial Finance. South Western Cengage Learning. pp. 717.
• Magretta, J. (2002) Why Business Models Matter. Harvard Business Review. Vol. 80, Iss 5. p. 86-92.
• Pine, B.J. and J.H. Gilmore (1998). Welcome to the Experience Economy. Harvard Business Review. Jul-Aug 1998, Vol. 76, Iss 4. p. 97-105.
• Timmons, J.A. and S. Spinelli (2007). New Venture Creation: Entrepreneurship for the 21st Century. McGraw-Hill Irwin. pp. 658.
  

Course authors and contributors

Role	Name(s)
Authors	Alex Bruton
Contributors	Laurie Jensen Patricia Derbyshire Stephen Kenny

Copyright

© 2008, Bissett School of Business, Mount Royal College.