Chapter Two America’s Entrepreneurial Revolution Goes Global Chapter Two Dowling BA 560 Fall Term...

America’s Entrepreneurial Revolution Goes Global

Chapter TwoChapter Two

DowlingDowlingBA 560BA 560

Fall Term 2006Fall Term 2006

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 22

A Global MovementA Global Movement

Significant impact on the U.S. cultural and Significant impact on the U.S. cultural and economic landscape economic landscape

Model for business, education, and Model for business, education, and policymakers around the globepolicymakers around the globe

Exploding in India, China, and the former Exploding in India, China, and the former Soviet blocSoviet bloc

Adoption of the entrepreneurial mind-set is Adoption of the entrepreneurial mind-set is growing exponentially larger and fastergrowing exponentially larger and faster


Innovation + Entrepreneurship = Innovation + Entrepreneurship = Prosperity and PhilanthropyProsperity and Philanthropy

Entrepreneurship is an important political Entrepreneurship is an important political phenomenonphenomenon

The linkage between entrepreneurship The linkage between entrepreneurship and public policy is increasingly importantand public policy is increasingly important


Job CreationJob Creation

Research findings by U.S. Small Business Research findings by U.S. Small Business Administration’s Office of Advocacy:Administration’s Office of Advocacy:

Small businesses and entrepreneurs created Small businesses and entrepreneurs created more than 34 million new jobs since 1980more than 34 million new jobs since 1980Small businesses represent 99 % of all Small businesses represent 99 % of all employersemployersSmall businesses provide about 75 % of all Small businesses provide about 75 % of all new net jobsnew net jobs


New Venture FormationNew Venture Formation

Creates economic and social mobilityCreates economic and social mobility

Is opportunity-centered and rewards talent Is opportunity-centered and rewards talent and performanceand performance

Entrepreneurship is not about religion, Entrepreneurship is not about religion, gender, skin color, social class, or national gender, skin color, social class, or national originorigin

Women and a number of ethnic and racial Women and a number of ethnic and racial groups are excelling at entrepreneurshipgroups are excelling at entrepreneurship


Exhibit 2.1Exhibit 2.1


The Self-EmployedThe Self-Employed

The highest level of personal satisfactionThe highest level of personal satisfaction

Challenge Challenge

PridePride

Remuneration ($)Remuneration ($)

Love of work - it is:Love of work - it is:– InvigoratingInvigorating– EnergizingEnergizing– MeaningfulMeaningful


Mega-Entrepreneurs Who Started Mega-Entrepreneurs Who Started in Their 20sin Their 20s

MicrosoftMicrosoft—Bill Gates and Paul Allen—Bill Gates and Paul Allen

Dell ComputersDell Computers—Michael Dell—Michael Dell

Apple ComputersApple Computers—Steve Jobs and Steve —Steve Jobs and Steve WozniakWozniak

Federal ExpressFederal Express—Fred Smith—Fred Smith

PolaroidPolaroid—Edward Land—Edward Land

NikeNike—Phil Knight—Phil Knight


New Industries Launched by the E-New Industries Launched by the E-Generation (1 of 2)Generation (1 of 2)

Personal computersPersonal computers

BiotechnologyBiotechnology

Wireless cable TVWireless cable TV

Fast oil changesFast oil changes

PC softwarePC software

Desktop informationDesktop information

Wireless communications/handheld devicesWireless communications/handheld devices


New Industries Launched by the E-New Industries Launched by the E-Generation (2 of 2)Generation (2 of 2)

Healthy living productsHealthy living productsElectronic pagingElectronic pagingVoice mail information technology servicesVoice mail information technology servicesCellular phone servicesCellular phone servicesCD-ROMCD-ROMInternet publishing and shoppingInternet publishing and shoppingDesktop computingDesktop computingVirtual imagingVirtual imaging


InnovationInnovation

Small entrepreneurial firms (since WWII) are:Small entrepreneurial firms (since WWII) are:

Responsible for half of all innovationResponsible for half of all innovation

Credited with 95 percent of all radical Credited with 95 percent of all radical innovationinnovation


Venture and Growth CapitalVenture and Growth Capital

Classic venture capitalists:Classic venture capitalists:

Work as coaches and partners with Work as coaches and partners with entrepreneurs and innovators entrepreneurs and innovators

At very early stages of developmentAt very early stages of development

To shape and accelerate the development To shape and accelerate the development of the companyof the company


Angel InvestorsAngel Investors

Moderately wealthy to very wealthy Moderately wealthy to very wealthy individualsindividuals

Successful entrepreneursSuccessful entrepreneurs– Bring experience, learning curves, networks, Bring experience, learning curves, networks,

wisdom and maturity wisdom and maturity – Serve as coach, confidant, mentor and Serve as coach, confidant, mentor and

cheerleadercheerleader


America’s Self-Made MillionairesAmerica’s Self-Made Millionaires

The Millionaire Next Door The Millionaire Next Door by Thomas J. by Thomas J. Stanley and William D. DankoStanley and William D. Danko

MillionaireMillionaire—a person with a net worth of $1 —a person with a net worth of $1 million or moremillion or more

Traits of these millionairesTraits of these millionaires– Two-thirds are self-employedTwo-thirds are self-employed– Over 80 percent accumulated their wealth in one Over 80 percent accumulated their wealth in one

generationgeneration


The New Age of Equity CreationThe New Age of Equity Creation

Long-term perspectiveLong-term perspective

Venture capital industry has followed Venture capital industry has followed overall economicsoverall economics

Over 95 percent of the nation’s wealth has Over 95 percent of the nation’s wealth has been created since 1980 – a direct result been created since 1980 – a direct result of the entrepreneurial revolutionof the entrepreneurial revolution


U.S. Venture Capital Investment U.S. Venture Capital Investment by Yearby Year

Number of Average per Sum InvestmentTime Period Companies Company ($millions)

19901990 11431143 1.91.9 $$ 2,767.1 2,767.1

19921992 13451345 2.62.6 $$ 3,511.1 3,511.1

19941994 11971197 3.43.4 $$ 4,120.6 4,120.6

19961996 24642464 4.54.5 $$ 10,992.9 10,992.9

19981998 35573557 5.95.9 $$ 20,899.8 20,899.8

20002000 78327832 13.413.4 $$ 104,827.4 104,827.4

20022002 30423042 7.1 $ 21,579.37.1 $ 21,579.3

20042004 28732873 7.37.3 $ 21,004.4 $ 21,004.4


Building an Entrepreneurial SocietyBuilding an Entrepreneurial Society

The poor get richerThe poor get richer

Equal opportunities (not equal incomes) Equal opportunities (not equal incomes) are createdare created

Economic mobility increasesEconomic mobility increases

Social mobility increasesSocial mobility increases

Chapter Two America’s Entrepreneurial Revolution Goes Global Chapter Two Dowling BA 560 Fall Term...

Documents

Transcript of Chapter Two America’s Entrepreneurial Revolution Goes Global Chapter Two Dowling BA 560 Fall Term...